The impact of Apple’s mission, vision, and primary stakeholders on its overall success
Apple has aimed at creating the best experience among its customers. The company believes that its “innovative hardware, software, and Internet offerings” (Apple Inc, 2012) will bring the best experiences to “students, educators, creative professionals, and consumers around the world” (Apple Inc, 2012).
The mission of Apple Inc has ensured that the company produces the most preferred brand in the world. Apple has maintained a top position among many users, particularly college students in the US (Anderson Analytics, 2007).
Data from Student Monitor, a research company indicated that Apple held first position among computer manufacturers as indicated by the US students who participated in the survey (see fig. 1).
The survey found out that “27 percent of student-owned notebooks were Macs, compared to 24 percent for second-place Dell” (Slivka, 2010). In addition, about 47 percent of the students indicated that they would buy Apple’s new notebook (see fig. 2).
These data also indicated that demands for Apple products among students were on the increase. On the other hand, products from competitors, such as Dell and HP, have experienced downward trends in demands among the US students.
These are growing trends in usages of Apple products among students in the US. Apple enjoys pure loyalty among its consumers, who have become brand-centric fan groups. As a result, Apple Inc has developed a brand community among students and other consumers all over the world.
The Apple brand community has grown out of consumers’ own fanaticism for the product rather than sly marketing efforts. In some cases, a brand community of Apple has resulted from the necessity among customers who want to be a part of a group and show that they have understood the essence of their Apple brand.
Apple Inc has learned to keep its brand community to anticipate for new products and features. This can fuel any form of fanaticism among users. This is usually the cases with any product of Apple, which users have transformed to lifestyle products.
According to consumer psychology studies, Apple has created a brand that is more than just a set of attributes but a core part of a consumer, i.e., Apple brand defines its consumers by symbolically reflecting their lifestyle.
The five (5) forces of competition: how they affect Apple Inc
Threat of entry
Apple Inc has created a competitive global brand. It requires high-levels of creativity, invention, and resources to develop products that Apple Inc has developed. Thus, threat of new entrants may not be a problem for Apple. However, new, small companies have emerged to develop software apps and competitive products. They will take away market shares from Apple Inc (Porter, 1998).
Bargaining power of suppliers
Many components that Apple Inc uses come from several sources. However, the company gets some parts from single or limited suppliers. This has exposed Apple Inc to critical pricing and supply risks. In addition, most parts from multiple suppliers often experience industry-wide shortages and pricing variations. However, Apple Inc has several agreements to mitigate supply challenges, but these contracts do not protect it completely from supply threats and there is no surety that it will renew them. Thus, Apple Inc is still subject to supply threats, shortages, and price increments, which negatively can affect its financial and operation performances.
Bargaining power of buyers
Apple Inc only develops premium products to show its power in the market. Such products have gained recognition among consumers. In most instances, Apple Inc consumers do not bargain for prices because some would queue or place their orders before the launch of a product. Usually, customers queue to purchase iPhones in certain regions, which may reduce the bargaining power of consumers. However, this is not the case in emerging markets like Middle East, Africa, and Asia.
Availability of substitutes
Consumers of Apple products have substitute products from other companies like Samsung, Microsoft, HP, Dell, Lenovo, and other smart devices companies. These products have presented continued threats to Apple Inc.
Competitive rivalry
There is a fierce rivalry between Apple Inc and Samsung. These companies compete on providing the next best smart devices for their consumers. Some of the Apple Inc brand communities have claimed that Apple has lost its creativity. In addition, competition also comes from other computer and smart device manufacturers and app developers. There are fears that Apple Inc will lose its huge market shares to these competitors.
Apple Inc SWOT analysis
Strength
- Brand fanaticism across the globe;
- Number one innovator in smart devices technology;
- Strong financial performance;
- Good brand reputation;
- Global presence;
- Knowledgeable workforce;
- Unique products in “i-brand”.
Weaknesses
- High product costs;
- Incompatibility of iOS with other available products;
- Declining market share;
- Patent infringements and subsequent legal challenges;
- Changes in the executive team;
- Defects of new products.
Opportunities
- High demand of Apple products globally;
- Possibility of iTV and wearable computer launch;
- Acquiring supply contracts with apps sources;
- Improve existing products;
- Global growth of smart device markets;
- Rapid acquisition to secure patents;
- Increased advertisement;
- Growth in demand of iCloud services;
- Explore new markets in Europe, Asia, and Africa;
- Introduce new products for low end consumers.
Threats
- Rapid technological changes in the industry;
- Decline in brand reputation;
- Legal challenges from patent infringement;
- Suppliers’ price changes;
- Shortage of suppliers in the industry;
- Competition from other firms selling digitized products;
- Samsung technology and price wars;
- Strong dollar;
- The growth of Android OS in portable smart devices;
- Incompatibility of iOS with other products;
- Challenges in the international markets like wars and regulations;
- Slow pace of innovation and R&D activities;
- Tax challenges;
- Foxconn high wages.
How Apple Inc can capitalize on its strengths and opportunities, and minimize its weaknesses and threats based on SWOT analysis
Apple Inc operates in an industry that is prone to rapid technological advances. Therefore, the company must develop its R&D department to ensure constant and timely release of new products, services, and technologies in the global market.
Apple Inc must develop new technologies and improve current products through R&D. It should also obtain license of patents, acquire new businesses and technologies for growth.
Marketplaces of smart devices have become highly competitive. Consequently, Apple Inc needs to maximize sales from a single consumer. The company must focus on different modes of distribution in order to reach many segments of the market.
These may include online, direct sales, wholesales, retail stores, and third party outlets. In addition, they must offer value added services and products to consumers. Apple Inc also requires knowledgeable salespeople for its unique brand. These people must be able to show various functionalities and capabilities of Apple products.
Apple Inc must develop its own distribution, retail, and support centers globally. This approach will allow it to provide high quality services, and buyer experiences to customers.
The company has superior products. However, Apple Inc must continuously develop new products to strengthen its financial position and revenues. The current and potential competitors of Apple Inc have resources, which can allow them to offer some products and services at low costs or at no cost all.
Supplies of components from multiple sources present price and industry shortages to Apple Inc. The company must continue to work on acquiring new contracts with suppliers in order to avert price and shortage challenges.
Apple Inc also experiences several lawsuits related to patents. The company must constantly file for patent rights in order to protect itself from potential claims from other parties. Apple Inc must also acquire adequate time for its patents. In the global marketplace, Apple must improve its products and review prices in order to cater for various segments of the market.
Various levels and types of strategies Apple Inc may use to maximize its competitiveness and profitability
Apple Inc must adopt some business level strategies, which will make it remain competitive and increase customer demands. In this case, it must continually increase and expand product and services innovation, introductions, and transitions.
Apple Inc must constantly introduce “new products, services and technologies, enhance existing products and services, and effectively stimulate customer demands for new and upgraded products” (Apple Inc, 2012).
This must account for timely introduction of new products in the market because of rapidly evolving technologies. However, Apple Inc must observe that it will be difficult to determine reactions of users against its new products and services.
Apple Inc must review its pricing strategy because of short life of its products, changes in technologies, and fierce competitions.
The company must continually invest in R&D, new technologies and apps in order to keep up with customer demands and competitions. This will ensure that Apple Inc can compete successfully in the global marketplace.
Apple Inc must also embark on aggressive acquisition. This will assist the company in retaining patent rights and acquiring new technologies. In addition, it is an effective method of ensuring constant supplies of components without price and shortages challenges.
Apple Inc must also develop its workforce. The company has premium products with multiple features and capabilities. It can only rely on knowledgeable workforce to market such products to different consumers in various parts of the world.
This shall enhance customer experiences and support services. Direct contacts with customers would ensure that customers have the best experience of Apple Inc.
A communications plan Apple Inc could use to make the recommended strategies known to all stakeholders
The above strategies should serve internal purposes of the company because they are competitive and profitability strategies, which competitors should not know about their existence. Thus, an effective communication plan must be internal communication channels. Apple Inc shall contact relevant departments and provide required information for their improvement.
Two corporate governance mechanisms used by Apple Inc and evaluate how effective they are at controlling managerial actions
Apple Inc introduced a policy to reduce stock option overhang of the CEO. This measure aimed at restricting the available stock options for the CEO with aim of protecting shareholders.
The aim of this approach was to “return a net total of over 32 million options back to the company, which represented almost seven percent of the total options and shares outstanding” (Apple Inc, 2003). This was good for shareholders as it restricted stock options for senior executives.
Apple Inc also introduced two additional independent directors. This implies that out of seven Apple directors, five of them are independent in order to comply with NASDAQ and SEC regulations.
In addition, the board of directors increased the role of independent nominating committee to include “corporate governance as the new Nominating and Corporate Governance Committee, and it expanded the role of its Audit Committee in accordance with the Sarbanes-Oxley Act and proposed SEC and NASDAQ regulations” (Apple Inc, 2003).
Chairs of these committees are “independent and most of the members are independent directors” (Apple Inc, 2003). This is perfect for shareholders, who will have increased independent representation. Thus, they can curtail unfavorable management decisions.
The effectiveness of leadership within Apple Inc and recommendations for improvement
Apple Inc is undergoing leadership transition, which is responsible for its uncertain future. The company will experience challenges without Steve Jobs.
Apple fans believe that Jobs was a visionary and innovator, who managed the company to success. However, some critics claim that Tim Cook has not been able to fill this gap.
The company has no effective succession plan in place. This explains why it is undergoing leadership crisis during transition. Marshall Goldsmith noted that Apple Inc did not get all aspects of succession right.
Many people have questioned whether Cook can do marvelous works of Jobs. The obvious response is absolute no. Cook must perform beyond his current abilities in order to drive Apple Inc to success.
Cook looks like a replacement. In other words, Apple Inc had no succession plan. It simply replaced Jobs with Cook. Thus, Apple Inc needs a real succession plan in place for its future growth and not replacement strategies.
Apple Inc efforts to be a responsible (ethical) corporate citizen and the impact these efforts
Apple Inc has committed to the highest standards of ethical responsibilities with regard to social and environmental matters in all locations in which it sales and manufacture products. The company aims to maintain the integrity of its business and brand.
Therefore, it ensures that all suppliers and dealers adhere to sets of rules under social and ethical responsibilities. This has worked well for Apple because it does not experience environmental and ethical challenges in its areas of operations. This is the case at Foxconn, Apple’s leading supplier.
Apple Inc is now a member of Fair Labor Association (FLA) because of effective and fair work conditions. For instance, FLA conducted an audit in Foxconn factories, which was a comprehensive exercise.
The company worked with FLA in order to implement recommendations from the audit. Consequently, Foxconn has implemented several recommendations prior to due dates.
Apple Inc believes in energy efficiency through its products. It has developed Macbook’s battery to last long before replacement.
Moreover, it has recycling plan across major locations in which it operates. Thus, the company has reduced carbon emission and reduced amount of waste materials from its products.
References
Anderson Analytics. (2007). Apple tops brand survey. Web.
Apple Inc. (2003). Apple Enhances Corporate Governance. Web.
Apple Inc. (2012). Form 10-K: Annual Report 2012. Web.
Porter, M. E. (1998). Competitive Advantage: Creating and Sustaining Superior Performance: New Introduction. New York: Simon and Schuster.
Slivka, E. (2010). Survey Finds Apple Most Popular Notebook Brand Among U.S. College Students. Web.