Every business organization is unique with regard to how they craft and execute business strategies, as well as how they operate their business activities. Porter’s value chain developed in 1985 recognizes that business organizations are basically an integration of activities geared towards designing, producing, marketing, delivering and supporting products and services.
Every business organization has a specific and unique value chain which is the potential source of their competitive advantage. Value chain analysis enables an organization in determining which business strategy to adopt. Strategies such as cost leadership and differentiation are highly informed by value chain analysis (Henry, 2008, p.102).
Value chain activities have costs attributed to them which influence their inter-relationships with other activities both internal and external, to an organization. The performance and competitiveness of an organization is determined by how effective an organization manages the various value chain activities.
SWOT analysis examines an organization’s key business operations and structure, history and products, as well as revenue and strategies. The study is about both internal and external factors affecting an organization’s performance and competitiveness. The knowledge of an organization’s value chain is crucial in determining where an organizations strengths, weaknesses, opportunities and threats lie (Henry, 2008, p.117).
SWOT Analysis of Apple Inc
One of the greatest strength of Apple Inc is the ability of the organization to innovate products such as i-Pod and i-Tunes. Constant innovation and development of products keeps Apple’s competitors at bay as the organization continues to be competitively advantaged. Apple’s strength also comes from its highly dynamic and interactive iTunes online stores.
This online store enables Apple to reach a large number of online customers and has a world market share of 82% selling at least two million songs on a daily basis. Apple’s organizational architecture is another internal factor that has given Apple a competitive advantage (Henry, 2008, p.141).
One of the weaknesses of Apple computers is that it market segment target is highly limited as the organization has failed to target the segment of the market that is not computer literate.. Another weakness of the organization arises due to lack of customization of their computer and digital media products and services. This does not provide their customers with the opportunity to by personalized products (Henry, 2008, p.141).
The growing demand for computers and digital media is an opportunity at the disposal of Apple Inc. Another opportunity for Apple Inc is that the Buyers of computers and digital media products such as the iPod and iTunes are increasingly becoming more educated in terms of what they really want.
The expansion of communication and technological integration also provides an important opportunity for Apple Computers to expand its business operations. Another business opportunity at the disposal of Apple Inc is that of partnering with other industry leaders to produce more innovative products for their customers (Henry, 2008, p.141).
Major threats to the operation of Apple computers, digital media products and services include the ever changing nature of the computer industry, stiff competition from other market players especially those from Asian countries, price difference between computer and other digital media products and brands. The pace at which technological advancement is taking place is another threat to the operations of Apple Computers (Henry, 2008, p.141).
The Core Competences and Distinctive Competence of RIM Blackberry
Strategy delineates the aspirations of an organizations management for strategic business operations in the future. RIM Blackberry differentiation strategy is a collection of initiatives that are undertaken by the organization’s management at various levels in the organizational hierarchy and thus makes it harder to be imitated by competitors, despite operating in a standard industry technology (knowledge.wharton.upenn.edu, 2010).
RIM Blackberry’s smart phones model of business is hard to imitate as it also involves unrivalled experience and expertise in supply chain management and logistics. Most of RIM Blackberry’s competitors are not in a position to manage such an unrivalled supply chain management and logistics necessary for implementing (knowledge.wharton.upenn.edu, 2010).
SWOT Analysis of Dell Inc
One of the most important strengths of Dell Inc over the past decades has been a well crafted business policy. Dell’s straightforward direct-sales business model has been described as highly efficient. Dell sells its products directly through the organizations website. Due to its efficiency the business organization is able to sell its products and services at relatively low prices as compared to those of its marketplace competitors such as Lenovo (Henry, 2008, p.141).
The direct sales business model allows Dell clients and customers to customize their computers according to their specific needs. This enables customers to get more options with regard to both portability and performance of their products. In addition to enabling full customization of computer products, Dell’s direct sales model results into fast delivery of products and services (Pinegar, 2002, p. 4). As a result, Dell Inc has been over the years able to capture the home users segment of computer markets especially in the US.
Dell has been able to make enormous profits from cost saved from this supply chain management and logistics system. The organization has a well established relationship with its suppliers, as well as an essential inventory turn around. These have led to large costs being saved by the organization which could then be passed on to customers through reduced prices of products and services (Pinegar, 2002, p. 5).
Dell Inc makes unique products which are based on industry-standard technologies. Despite the organization’s products not being exciting or sexy, they are more powerful and cheap. For instance, Dell’s DJ Ditty music player are relatively cheap in price and extremely powerful in functionality as compared to Apple’s iPod which has been influenced by propriety standards and priced at a premium as compared to those of competitors (Pinegar, 2002, p. 5).
One of the weaknesses of Dell is that it market segment target is highly limited as the organization has failed to target college students segment of computer markets. Very limited proportion of Dell’s total sales revenue comes from educational institutions such as universities, colleges and schools.
Another weakness of the organization arises from its direct sales model of doing business. The model does not enable customers to physically see or even touch the computer products they are ordering for until they are delivered (Pinegar, 2002, p. 6).
The growing demand for computers is an opportunity at the disposal of Dell Inc. people are buying and using computers more than ever and as such, the market continues to expand. Another opportunity for Dell is that the Buyers of computers are increasingly becoming more educated in terms of what they really want.
The expansion of communication and technological integration also provides an important for Dell to expand its business operations. Customers are able to make use of their personalized computers to make orders and enquiries about anything (Pinegar, 2002, p. 6).
Major threats to the operation of dell include the ever changing nature of the computer industry, stiff competition from other market players especially those from Asian countries, price difference between computer brands is also another issue that could threaten Dell’s business operations. The pace at which technological advancement is taking place is another threat to the operations of Dell. Brand names must ensure they reinvent themselves with regard to cost-leadership strategy (Pinegar, 2002, p. 7).
Why Competitors Find It Difficult To Imitate Dell’s Direct Sale Model Given That Its Computer Products Are Based On Standard Industry Technology
Thompson, Strickland and Gamble (2005) posit that strategy is distinct and specific to a particular business organization. Dell Inc’s direct sale model is thus specific and distinct to Dell and that makes it harder for competitors to imitate. Dell’s direct sales strategy is a collection of initiatives that are undertaken by the organization’s management at various levels in the organizational hierarchy and thus makes it harder to be imitated by competitors, despite operating in a standard industry technology.
Dell crafted a highly complex and comprehensive business strategy that it is the only organization that could be able to understand and implement it. Dell’s direct sales model of business is hard to imitate as it also involves unrivalled experience and expertise in supply chain management and logistics. Most of Dell’s competitors are not in a position to manage such an unrivalled supply chain management and logistics necessary for implementing Dell’s direct sales business model (Thompson, Strickland, & Gamble, 2005).
The market trends in the computer, mobile phones and digital media industry determine of how business organizations craft and execute strategies. These strategies are crafted in a distinct manner in order to provide them with a competitive advantage against rivals in the market.
The process of crafting business strategy occurs in numerous phases which take into consideration various issues. It is thus essential for business organizations to closely analyze their strengths, weaknesses, opportunities and threats to effectively operate in the technology market place.
Henry, A. (2008). Understanding Strategic Management. Oxford: Oxford University Press.
knowledge.wharton.upenn.edu. (2010). Surrounded by Rivals, Can Research in Motion — and the BlackBerry — Prove That It’s Hip to be Square? Retrieved from: https://knowledge.wharton.upenn.edu/article/surrounded-by-rivals-can-research-in-motion-and-the-blackberry-prove-that-its-hip-to-be-square/
Pinegar. (2002). Dell Computer Corporation: Market Trends and SWOT Analysis. Web.
Thompson, A., Strickland, A. J. & Gamble, J. E. (2005). Crafting and Executing Strategy: The Quest for Competitive Advantage, Concepts and Cases. New York: McGraw- Hill.