Introduction
Apple Computer Inc. has been in music business for over 30 years. The company has emerged as one of the highly recognized players in computer industry. The giant computer manufacturer is mostly known for its famous apple’s iTunes online music store, iphones and ipods among other products such as laptops and desktop computers.
The company has quite often endeavored to maintain its market share despite myriad of internal and external factors which have negatively affected its profitability. Factors such as stiff competition from both legal and illegal online video and audio music download services as well as competition from rival companies like Dell and Microsoft have equally downsized its operations.
Furthermore, the company has not eluded the effects and threats of possible substitutes and low-priced products that tend to unfavorably compete with its products such as iPhone, apple TV and the iPod. As such, it operates in a very dynamic market where video-on-demand, mobile phone and music technology is rapidly changing thereby forcing all the players in this industry to devise very effective strategies for survival.
There is no single company in the computing industry that has full control of new technology and therefore, each player in the market has to change in the same pace as technology in order to remain relevant in the market. It is imperative to note that many companies in this industry are in a state of dilemma to either invest in their traditional modeling such as computers or invest in the newer products such as iphones and ipods.
External analysis
Company’s profile
Apple Inc. began in 1976 through a partnership between stephen Wozniak and Steve Jobs. In 1977 it was publicly known as Apples Company Inc. As a public company, it has employed thousands of employees who are skilled personnel working as highly trained human resource managers and marketers.
The Company’s profile showcases an experienced team of executives with management officers. Its sale in music alone has risen over the years. For instance, cash equivalent in 2007 was $6,392 million. It handles both software and hardware products such as computers and laptop accessories as well as music and video products such as iphone and iPods,
Key success factors
In order to maintain the music business, Apple Inc. has built a robust customer base. The company has millions of customers who are loyal to its music products that are distributed across the globe. The company has maintained a competitive edge in the market due to the quality of video and music products it offers.
The management at Apple Inc. has continued to attract new customers as well as retaining the existing one by offering satisfactory services. This has enabled the company to attract large crowd whenever they introduce a new product in the market. Such products include Apple TV and iPhones.
Additionally, the company uses creative and authentic designs when advertising its products. The adverts of the company are designed in a way that they not only persuade the customers, but also convince them to buy the products.
For instance, the company has over the years successfully used celebrity musicians to advertise its products such as iPhone and iPod to attract new customer’s particularly young generation. These types of adverts have continued to build good reputation for the company’s products.
Internal analysis
From the financial statement of the year ended September 2010, the profit of the company rose from $ 42.9 billion reported in 2009 to $65.2 billion in 2010. The sales and revenue of the company have also been growing steadily for the past few years.
This positive financial growth of the company can be attributed to different strategies that the management of the company has undertaken in order to increase financial performance of the company despite changing economic conditions that are experienced worldwide.
Moreover, offering a wide range of products and services in order to increase its sales has been used as an internal marketing strategy. For instance, the company has come up with various types of music products and services that suite different types of customers. These products include commercial music softwares such as Mp3 players, iPods, iPhones and Apple TV.
Offering a wide variety of music products has enabled the company to retain their customers who feel that all their needs and preferences are well catered for. Again, different products and service perform differently in the market depending on internal and external forces. Therefore, offering variety of product will ensure that the sales of the company are maximized in all the seasons despite some products performing poorly in the market.
Strategic issues
The Company has a highly competent and innovative team. It has employed a team of researchers and innovators who have made it possible for the company to be a market leader in the world of music technology.
Through research, this team has been able to keep at pace with the changing music technology where they have managed to invent new devices that meet their customers music needs. Each an every year, the company is coming up with new products such as iPhone and iPods as well as more advanced laptops that have enabled the company to compete effectively with the rival companies in the market such as IBM.
Management
The company has efficient management team comprising of board of governors, CEO and other management staffs who have spearheaded the company to greater heights despite global economic turn down.
The management team is driven by the vision of the company and it is committed to accomplish goals and objectives of the company. This team overseas all the operations of the company at all levels and make strategic decisions such as expansion strategies that have enabled the company to be a market leader in the world of technology.
Human resource department of the company has created a good working environment for all the employees which have enabled it to increase the productivity in all departments. A good working environment has been created through well defined rules and regulations that stipulate how employees should behave in the work place.
What the employees are expected to do is clearly defined and what is not expected of them as well as disciplinary actions that will apply if one misconduct himself or herself in the work place.
Clear rules and regulations have ensured that all employees conduct themselves properly and they treat their fellow employees with dignity and respect. This enhances good personal relations among the employees which can eliminate all forms of discrimination enabling employees to work as a team for the common goal of the organization.
Human resource department has also played a crucial role in motivating employees of the apple company. The department has recognized the importance of a well motivated workforce in the achievements of goals and objectives of the organization.
The company has come up with initiatives to increase morale of the employees such as a rewarding program, recognizing hardworking employees, promotions and above all good compensation that have motivated them to work hard.
The human resource department assesses the performance of all the employees and ranks them according to their performance in a given period of time. Promotions and recognition is then based on those ranking where at times employees are given an opportunity to choose employees of the year for awarding.
VRIO Analysis
Apple Inc. has been able to gain competitive advantage by identifying strategic capabilities that are appropriate and comprehensive in planning and allocation of resources. According to competitive advantage theory, high market price for products should be directly proportional to high- quality of the given products.
The ability to sell music products of high quality at low prices and still maintain competitive advantage indicates that the company has restructured its production capabilities in such a way that mass production is done at relatively low cost.
Furthermore, Apple’s competitive advantage has been visualized through its ability to by outperforming its competitors through developing combination of attributes such as skilled personnel, highly trained human resource in marketing skills. The Company showcases an experienced team of executives with the management officers.
Its competitors find it cumbersome to imitate its customer service, durability, firm reputation, brand image, reliability, innovativeness and technology as well as product quality. This can be attributed to its differentiation strategy. This latter has helped it gain competitive advantage over other competing companies due to customer loyalty and shrewd marketing techniques, quality advertising and other special offerings.
It is important to note that competence and differential strategy secure a company’s market leadership through competitive advantage. Other important aspects at Apple Inc. include organizational resources, human resource management, innovation and technology.