Macro and Micro Frameworks Analysis and Evaluation
The External Environment
Technology changes have greater influences on Apple Inc operations. Changes in technology are rapid and highly unpredictable. Every year, technology product manufacturers develop improved electronic components and provide them at relatively cheaper prices. Such new electronic components have allowed technology firms to compete on innovation and prices.
Today, Apple faces major competition from Samsung, Microsoft, Intel, Dell and other companies. These companies have developed innovative products at relatively cheaper prices. As a result, Apple has reacted to competition by introducing advanced versions of its existing products.
Apple Inc has been able to sustain innovation in products to differentiate it from other products in the market.
Economic forces
In the recent years, the technology industry has become highly competitive because of changing economic situations globally. There are major companies that have dominated certain markets. Companies such as Samsung have found greater market shares in emerging economies while Apple still appeals to high-end part of the market.
Today, it is easier to join the technology industry because of low entry barriers and availability of venture capitals. New small firms have increased levels of competition while suppliers of processors have increased their bargaining power.
As firms with relatively cheaper products gain wider market shares, Apple has been forced to readjust its prices to allow many consumers to purchase them.
Labour costs in certain markets such as China, Vietnam, Turkey, Brazil, Mexico and Hungary have surged, a situation which has forced Apple to relocate product plants to the US.
Politic forces
Apple sells its products mainly in developed countries with stable political environments. At the same time, the company also seeks for greater market shares in emerging economies. Some of these economies, particularly the Middle East have experienced turbulent political situations, which have affected Apple product sales.
At the same time, political tension between the US and China has made China to ban “government officials from buying Apple gadgets, amid fears that America could hijack the company’s iPads and iPhones to spy on Beijing” (Rushton, 2014). This move will reduce Apple’s product purchase in China. Negative political forces, therefore, have detrimental effects on Apple’s global market share.
Social factors
The technology industry also faces changes in social circumstances, particularly lifestyles of consumers. These changes have forced Apple to become highly innovative to support modern lifestyle. As needs of consumers change, Apple has been able to develop products and services to cater for entertainment, professional and regular needs of its customers.
Still, Apple has focused on transforming lifestyles at home by introducing “functionality in its upcoming release of iOS 8, through the HomeKit software platform, to integrate control for door locking, light dimming, and other home automation gadgets and features to iOS devices” (Reardon & Tibken, 2014).
Many industry observers have touted “smart home technologies as the next big thing and battlefront for technology companies” (Reardon & Tibken, 2014). It would make a significant use of the so-called Internet of Things that users can manage through a smartphone or tablet (Reardon & Tibken, 2014).
Political, social, technological and social factors are major macroeconomic elements that interact to create greater forces, which affect Apple’s performances globally.
Fast and unpredictable changes in social lifestyles, technologies, economic and political situations have created business environments, which have forced Apple to continue with its innovative trends in order to meet customers’ needs and differentiate itself from competitors. In addition, they ensure that the company can meet various needs in different markets.
Quick changes of products and services in the technology industry have resulted in many outdated innovative products. Overall, Apple must understand macro elements and their impacts on its business globally.
Appropriate theoretical frameworks, value addition throughout the organisation and how the organisation sustains its advantage in its market or sector
Innovation is the central theme for any technology company. Senior management, however, must play critical roles in making crucial decisions that support innovation, value creation, R&D and enhancing the company’s differentiation strategies and value.
Strategic decision-making processes have allowed Apple to develop and perfect its innovative products and services. These innovative products and services have been able to create value to customers. Apple has been able to determine how to create value through its management strategies.
The company’s senior executives have been able to use human resources and effectively allocate resources to ensure successful development of products that create value to customers and provide sustainable growth.
Apple has been able to use its intangible resources to derive core values and patent its innovative products. Innovative approaches at every stage of product developments have resulted in superior products. As a result, customers have been able to adopt and use Apple products and services.
Apple has been able to leverage its innovative approaches to develop new products and services, which customers readily purchase despite their premium prices. However, value chain management at Apple is responsible for its innovative products and services.
Apple does not have any challenge extending its value chain management beyond its generic innovative products. For instance, as at the end of 2009, Apple’s generic strategy involved the introduction of innovative, high quality consumer electronic products and services to various segments of consumers (Marino, Hattaway, & Jackson, 2010).
From the company’s history, Apple was at the brink of extinction. Apple perhaps reflects a good example of how innovation can transform a company. The company embarked on value chain management by eliminating obsolete products and services and introducing new ones. The company simplified its products to provide what consumers needed.
As a result, Apple was able to regain its PC market shares and introduce “innovative, revolutionary new product categories and services including the iPod, iTunes and the iPhone” (Marino et al., 2010).
From a critical perspective, the company has been able to create a large fanatical base because of management ability to change decision-making processes and focus on introducing innovative products and services that offered ease of usability to customers.
Apple has shown that developing innovative products alone is not adequate. Senior executives at Apple have been able to leverage on innovation to develop a reliable value chain. Apple has understood its innovative processes and the industry growth curve.
At the same time, it has recognised radical transformations in the technology industry. The company aims to create a defensible, sustainable business model by ensuring that the required raw materials are available from suppliers at reasonable costs and time, product developers have new products on time and release them to counteract effects of competition.
As a result, Apple has been able to derive long-term value from its innovative strategies throughout the value chain. In addition, the company has created a large fanatical base due to its design and innovative products. Apple has emphasised the need to integrate customers’ experiences in its product design and developmental stages.
According to Jubak, Apple has hidden competitive advantage in its value chain. For instance, the company has been able to minimise its exposure to risks by investing “a big hunk of its $7.1 billion in capital spending to enhance its supply chain”.
Jubak asserts that the company’s approach to enhance supply chain has remained vague. Apple, however, has a tendency of approaching its suppliers and ensuring that they purchase new components for its products.
In fact, Apple can purchase such components to suppliers. In turn, the supply must guarantee that it would meet all demands from Apple on time. At the same time, Apple negotiates with suppliers to reduce prices of supplied components based on any cost savings from the new equipment. No suppliers that work with Apple can reject such offers.
Apple funds new equipment and reduce risks for suppliers at the same time, suppliers get huge advance orders from the company to grow their market shares. When Apple invests in the suppliers’ equipment, the company reduces cases associated with delays.
The current CEO of Apple, Tim Cook understands management of Apple’s supply chain and potential areas for cost saving. It is estimated that Apple saves between 15% and 20% every year on such arrangements with component suppliers. In addition, the company can negotiate with suppliers on components if prices of its products and services decline.
Apple has been able to create a sustainable competitive advantage and sustain it. Specifically, Apple focuses on innovative, revolutionary products and services to allow it to lead the market.
For a long time, consumers relied on PCs from HP, Dell and other suppliers, Apple challenged their business models, introduced new PCs and eliminated redundancy in computer usages and capabilities. In the same manner, Apple introduced iPod, which revolutionised the way people carried and listened to music.
The product also created monopoly in the industry. In subsequent years, Apple has followed with a wide range of iTune, iPhones, iPads and iMac among others. Apple has been able to continuously and repeatedly develop innovative products and therefore create and sustain a competitive advantage in the technology industry.
Apple also has created a differentiation advantage. The company has been able to create unique advantages and benefits to its fans through sleek products with distinct features from competitor’s products.
A process of strategic change in the organisation and appropriate change management models, blockages and facilitators of change, and the role of organisation culture
Apple Inc is one of the most innovative companies today. For the last few decades, the company has experienced strategic changes. Hence, it is imperative to understand Apple’s strategic change processes, resource allocation, approaches to future innovation and its culture.
Apple approaches strategic change processes as structured transition into the future. As a result, one can notice the fanatic base, new products and technologies and adoption of change processes within a short time.
Strategic change processes are evident in the ability of the company to innovate. Apple has the ability to innovate and execute its ideas and therefore, it does not suffer from failure to innovate (Govindarajan & Trimble, 2010).
However, one must recognise that innovation is a strategic change process that could be difficult to manage across the entire organisation and therefore there would be constant conflicts. Apple has been able to thrive because of its effectiveness in managing conflicts and change blockages.
Usually, innovative processes at Apple are experimental and small while the company runs massively well-established operations. As a result, operation managers would not want interference from other departments because they are under great pressure to deliver outstanding results throughout the year.
On the other hand, innovative processes present risks and distractions with unknown outcomes. As a result, many leaders in charge of product and service innovation feel that operation leaders hinder their work.
Apple has been able to adopt a change model that facilitates collaboration and inspiration, but there are several change models used by various organisations. This is a change leadership strategy as demonstrated by Steve Jobs and the current CEO, Tim Cook. The company focuses on collaboration and partnership between innovative leaders and operation leaders (Lashinsky & Burke, 2009).
As a result, all change initiatives at Apple take place under a collaborative model. The company has recognised that changes in the technology industry are rapid and highly integrated with other business processes. As a result, a change leadership model can provide the best solution to overcome barriers to change.
In any collaborative process, success depends on mutual respect. Apple leadership has recognised the need to promote change initiatives in the company (Gold, Thorpe, & Mumford, 2010). The company uses its human resources to facilitate change and build innovative products.
While resistance to change could affect the company negatively, conflicts in change management processes have provided valuable insights to allow the company to improve on its strategic change processes. It is imperative to recognise that leaders in Apple have collaborated to improve innovation in the company.
While there are several approaches of making collaboration work, Apple senior executives recognised the need to take personal initiatives to promote innovation at the company.
As a result, employees have also recognised the need to collaborate and work as a team. Leadership that promotes innovation is usually scarce. A study by Wooten highlights leadership strategy of Steve Jobs that promoted innovation at Apple. Wooten refers to it as the approach that focuses on “creating positive deviant performance”.
This strategy allowed the company to attain “extraordinary success beyond the expectations of both stakeholders and outside observers”. Steve Jobs’ leadership strategy and approaches to innovation thrived on core capabilities of identifying and seizing opportunities, supported by an organisational culture that allowed change to dominate. In this regard, Apple became a learning organisation.
Apple has a performance team led by its CEOs (Steve Jobs understood every detail of product development until its launch). The company releases products when it is ready for the market and usually in a big way (Stavros & Hinrichs, 2009). In addition, the company does not have frequent updates and changes to products. This strategy has allowed Apple to create fans as it adds new features and sleek designs that enhance user experiences.
Organisational cultures reflect shared values, principles, assumptions and beliefs among employees, which affect how they behave and relate with an organisation. Consequently, organisational culture reflects a community and collective identity of employees.
It highlights organisational behaviours that have persisted with time and shows how organisations adapt to changes in both internal and external environments. Organisational culture, therefore, unites a firm and defines its strategies, which employees inculcate in their roles.
Apple leadership is able to align its innovative culture with strategic goals, resources, values and prevailing industry conditions. Apple CEOs have understood how organisational culture could be used to create positive change. Senior executives at Apple have succeeded at aligning its culture of innovation to develop great products.
Innovation has been the major driving culture at Apple. Apple has created a culture of “rewarding, taking risks, experimenting and creativity”. Apple’s senior executives have inculcated the culture of achieving excellence in the organisation. The company has established a culture that allows employees to contribute their ideas and aim for excellence in product development and service provisions (Walters, 2008).
Senior executives at Apple have a critical role of recruiting and introducing employees to the company’s culture of innovation. While Apple look for employees who have the required experiences, talents and skills (Shevelenko & Berggren, n.d), such employees must also demonstrate that they are able to fit into the company’s culture of innovation and collaboration.
Apple has been able to create a learning organisation in which new recruits are able to learn the company’s culture and strategic objectives. A culture of organizational development allows Apple to overcome challenges and achieve their strategic objectives with the aim of creating sustainable competitive advantage (MacKerron, Cowe, & Milliken, 2009).
Appropriateness of the organisation’s business objectives and a critique of the implementation process
Researchers have shown that there is a strong correlation between a firm’s financial performance and setting of strategic objectives. Improved financial performance indicates appropriateness of a company’s business objectives.
For instance, on April 23, 2013, Apple announced that it “posted quarterly revenue of $43.6 billion and quarterly net profit of $9.5 billion, or $10.09 per diluted share against revenue of $39.2 billion and net profit of $11.6 billion, or $12.30 per diluted share, in the year-ago quarter”. In addition, the company recorded significant performances based on its flagship products like iPhone and iPad models.
These results show that Apple has been able to enjoy financial success because it has aligned its strategic objectives with financial performances. On the other hand, if a company has failed to develop appropriate business objectives, then it will record poor financial outcomes.
At the same time, it indicates that the company employees failed to understand any relationships among strategic business objectives, their individual roles and overall goals of the company. In addition, such employees also report cases of confusion with their individual roles and therefore poor performance for the whole organisation.
Apple has been able to set and align employees with business goals closely and effectively to improve the company’s product development, service provision and financial performances. At the same time, the company compensates its employees well in order to motivate them to achieve its strategic business goals on short-term and long-term basis.
To be effective, Apple’s strategic business objectives must meet the needs of the company and employees. In other words, Apple has been able to set business objectives that serve both quarterly projections and long-term business strategies. On the other hand, Apple’s employees have been able to achieve these goals because they are clear and easily comprehensible and therefore engaged (Haid & Sims, 2009).
Implementation process at Apple is simply. The company clearly communicates its strategic business objectives to all employees. At the same time, different departments also set their goals to complement the company’s goals and enhance goal visibility. These approaches facilitate goal alignment in the company. The company ensures that all managers share their goals to reduce redundancies in the entire firm.
At the same time, the implementation process allows employees to share responsibilities to achieve business objectives. Employees have the role and duty to dispense and share goals to enhance responsibility across all levels of the company (Shevelenko & Berggren, n.d). This process allows employees and managers to support each other and identify areas where there might be possible sources of departmental conflicts.
Apple has global goals to reflect the company’s global business strategies. Once the company has set such goals, various regions, countries and departments can set their individual goals in order to support the overall business objective (Hitt, Ireland, & Hoskisson, 2008).
Employees have various responsibilities, job functions and training. These attributes guide implementation of goals and target distribution among employees. Apple ensures that there is a clear communication of business objectives throughout the company.
Hence, employees can understand what the company expects them to achieve. For instance, employees at Apple’s service centres are expected to enhance customer experience and promote good relations. Overall, Apple set realistic and achievable goals that reflect all objectives against a given time.
References
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