Introduction
Apple Inc. is one of the most prosperous electronic firms in the world. Two scientists, Steve Jobs and Steve Wozniak, started this firm on April 1, 1976. These two individuals were electronic enthusiasts.
They were interested in turning their skills in electronics into large business units. Steve Wozniak, popularly known as Woz, was an astute electrician with a keen interest in computers. It was during this time that computers were started.
Steve Jobs on the other hand was a shrewd businessperson. Although Woz was more knowledgeable than Jobs in the art of designing computer hardware, Jobs was smatter in entrepreneurship.
While Woz considered his skills in making computers as a hobby, Jobs saw a huge potential of stating a computer firm that would rival the then leading computer firm, the IBM.
Jobs managed to convince Woz of the importance of commercializing their skills, and together, they started this company.
They later incorporated Ronald Wayne, a rich businessperson who came in to help the two financially. The trio formed a formidable force, which culminated into a company that is prosperous and very profitable.
Although this company had various challenges that saw it eliminate its Chief Executive Officer, who was one of the founder members, in 1985, the firm was able to overcome these challenges using a number of strategies.
Steve Jobs, having been forced out of the firm in 1985 as the chief executive, made a came-back in 1997 with strategies that transformed this firm to what it is currently.
Freeman (42) says that Apple is one of the firms that were able to overcome the wave of.com crisis of the early twentieth century that brought down many firm, especially those that were computer based.
Through hard work and good policies, this firm was able to beat Microsoft- its arch rival- in profit and revenue generation in the year 2010. In the same year, it was ranked one of the most innovative firms in the world, having introduced its iPad products into the market.
As at current, this firm has some of the most attractive electronic products in the market. Its iPad is still attracting huge sales in the international markets.
With a marketing strategy that has made its products secure a special niche in the current competitive electronic market, this firm has attracted the admiration of many scholars and entrepreneurs alike.
It is for this reason that the researcher has decided to give a comprehensive review of this firm’s winning strategies.
This study aims at critically analyzing the strategies used by this firm in managing the current competitive business environment in the world.
Apple’s Strategy and its Importance
It is very important for a firm to understand clearly its strategies. The first step is always strategy formulation. The firm should then move to the implementation strategy before coming up with evaluation and control procedures.
Apple is one of the current success stories in a group of companies that have managed to be successful in the face of increasingly competitive environment. This is attributed to its strategies that have helped it manage the competition in the electronic market.
The world is being transformed with the emerging technologies. One of the defining technologies that are transforming the world into a global village is the communication technology.
The phones and the internet have made communication very easy. This part of the current technology has transformed over the recent past, with new firms coming into play.
Another means of long distance communication has been through internet (wide area networks) with the help of computers. Apple is specialized in personal computers and Smartphone.
These two items have a huge market in the world. This has seen many firms gain interest in investing in it. As such, there has been a huge competition in this industry, making some of the firms fall off.
Apple has employed a series of strategies- as discussed below- to ensure that it remains relevant in this market. The strategies are very important because in such a market, any misstep by a firm May lead to automatic fall of the firm and therefore, every step must be calculated very keenly.
Desvaux (23) notes that the current world market is very competitive. This scholar notes that this competition is not only created by the fact that there are several firms producing the same product, but also the fact that customers are informed.
The current customers are very knowledgeable and know exactly what they want. They have the knowledge of where to get that which they need and at what price. They know available alternatives and this makes them more demanding.
As such, turning these individuals into loyal customers of a firm is not easy. It forces a firm to develop a strategy that would enable it remain relevant in the market and even to suppliers.
The Vision, Mission and Objectives of Apple
The vision, mission and objectives of a firm are the basic elements of strategic management. Sadler (31) says that the main difference between a vision and a mission is that while the vision focuses on what the firm plans to achieve in future, mission statement is concerned with what the firm is doing now in order to achieve its objectives.
The vision of a firm is always very important in charting the path to be taken by the firm. Apple’s vision statement clearly demonstrates the far this firm sees in the competitive electronic market.
The vision statement of Apple came from a statement made by its founder and former chief executive, Steve Jobs. He argued that man is the creator of change in the world.
As such, he should be above structures and systems, and not subordinate to them (Kline 28). This vision has seen this firm become very competitive.
This has been its driving force in innovations and creativity. Based on this, the firm has ensured that it remains relevant in the market by introducing new products with advanced features.
The mission statement of Apple may not pass as a standard mission statement.. However, by the close of this statement, another statement explains its commitment to students, educators, professionals, and general consumers in providing them with desirable products that are able to meet their desires.
Evaluation of the Company’s External Environment
Environmental scanning is one of the best ways through which an individual can assess the potential of a market. There are three variables in the environment, which are the natural environment, societal environment and task environment.
The natural environment variables include the climate, wildlife and physical resources. Societal environment entails economic, political, technological and socio-cultural forces.
Task environment include the government, customers, employees, unions, creditors, suppliers, local community and competitors. Environmental scanning can be done using STEEP Analysis.
This involves the analysis of socio-cultural, technological, economic, ecological, and political environments.
The socio-cultural environment of Apple is diversified. This is because this firm operates in the global market. There are those countries that cherish equality, and women have equal economic strength just as men.
In such countries, the firm does not segment the market based on sex, but age. The United States is one such country. However, other countries like Saudi Arabia have women as subordinates to men.
It forces this firm to target the male members of the society because they have bigger purchasing power.
The technological environment of this firm is very dynamic. Technology in mobile telephony and in computers has been the main challenge and strength of this firm at the same time.
While this firm is left with nightmares of trying to guess what its competitors like the Microsoft, Dell, Compaq and HP are going to come up with overnight, it has used this technology to emerge as the leader in Smartphone market.
Its recent introduction of iPhones and iCloude found other firms unawares. The dynamism of technology in this sector has made this firm be seen as the most innovative.
Economically, this firm has had both difficulties. The firm has been faced with economic recession that hit various countries in the world, especially the US economy which makes its main market.
This had serious negative effects on the firm’s revenues as many of the customers considered the products as non-basic. However, the firm has experienced economic boom in various markets hence increasing its revenues.
Currently, the United States, and many other countries making up the market of this firm are experiencing steady economic growth, making it have a favorable economic environment.
Politically, this firm has not met challenges in various countries that it operates in. The United States of America, where its headquarters are located, is the leading democracy in the world. It has a very stable government that is supportive of business operations.
China, where the firm does most of its productions, had some small political strife, but not enough to have significant negative impact to the firm. This has seen the firm prosper in most of its undertakings.
Legally, the firm has not faced major challenges. The laws that govern trade in the US, China and many other countries in the world have been very favorable to this firm. There are no occasions that this firm has faced a major litigation over an infringement of another firm’s right.
In most of its markets, especially in the emerging markets in Africa, parts of Asia and South America, this firm has met very friendly markets with laws that are conducive to foreign technological firms like it.
Evaluation of the Company’s Internal Environment and Resources
Another very important aspect of a company is the internal environment. The internal environment of Apple can be approached by analyzing the core and distinct competencies. Taking this approach, there are five variables that can be analyzed.
The first approach is the analysis of the firm’s tangible and intangible resources. Apple has various tangle asserts. The firm has its headquarters in California, US. In its headquarters, the firm has a huge building called Apple Campus where many of its offices are housed.
The firm has other facilities in China where part of its production is done. As at October 2011, this firm had a record 364 stores spread across the world. Within that year, this company had 60400 people employed directly in its facilities, and hundreds of thousands others employed indirectly in various locations in the world.
The firm has various products like phones and personal computers, which they sell in various markets around the world. By the end of 2011, the total asserts base of this firm was estimated to be US$116.371 billion.
Of the intangible assert, its most expensive assert is the brand name of the company. In 2011, Apple brand was ranked second, after Google, with a net worth of US$ 39301, beating some of the world’s giant firms like Microsoft, the Coca Cola, the General Electric, Wal-Mart and even IBM.
Other than the resources, another factor that is important to note when assessing the internal environment is the ability to exploit fully the resources it has.
This firm moved most of its production units to China where there is cheap labor compared to the United States. It has been in a position to exploit this labor fully. The firm has also been able to exploit the non-human resources to make some of the most admired products in the world.
It has also managed to control its supplies of the products they get. This firm also has advantage in this industry because it has both explicit and tactic knowledge in the productions of the phones and personal computers.
The Five Competitive Strategies Used by this Company
This firm uses various competitive strategies in the market in order to manage competition that is very rife in this industry. First, the firm has employed two of the porter’s competitive strategy of low cost and differentiation.
The firm moved its production from US to China in order to cut the cost of production. China, unlike the US, has cheap labor that would eventually translate to lower cost of production.
This makes it easy for this firm to sell its products at lower prices but still make profits. Other than the cost strategy, the other strategy that this firm has employed is the differentiation strategy.
This firm has made their products unique. Some of its present products are differentiated from other conventional products in the market, making it acquire a special niche within the industry. The iPhone is a product that is yet to find its rival in its special niche.
The timing tactic of this firm in launching new products has also been superb. This firm always come with a new product at such times that the market feels that they need a better product to serve their current needs.
It introduced the iCloud when the market needed a better storage facility for their data. This has seen their new products receive huge acceptance in various markets when introduced.
The firm has also been keen to employ cooperation strategy whenever needed. During its early years, it formed a joint venture with Microsoft when it realized that its computer languages were not efficient enough to make competitive products in the market.
This strategic alliance saw it gain market share both in the home markets and abroad.
This firm has also been able to implement Porters five forces. To tackle the threat of new competition, the firm has been keen on producing new products to rival those of new competitors.
To manage the threat of substitute products, Apple has developed different lines of products to satisfy different markets so that it may not be adversely affected if substitute products invade one line.
To increase its bargaining power with the buyers, it has continued to produce high products with qualities that make it easy for the customers to appreciate their high prices.
To increase their bargaining power with the suppliers, it has created a scenario where it is a single buyer with various sellers. This makes it able to dictate the terms of buying the products.
To counter the intensity of competition, it has been able to acquire a special niche in this market, rendering its competitors irrelevant as their products are turned into mere substitutes of this company’s products.
How the Company Strengthens its Competitive Position: the Strategic Moves
In the current competitive market, Apple has employed a series of strategies that would ensure that it remains relevantly competitive in this market. The first strategy it has used is the marketing strategy.
In this strategy, this firm has tried to sell its products at prices that would bring in as many of the customers as possible. Although the company has some of its products sold at premium prices, it has a number of its products sold at fair prices that can be afforded by the middle class members of the society.
Under this strategy, this firm has ensured that its distribution of the products is efficient and effective to cut down further the cost of delivering the products to the customer.
Another strategy used by this firm to manage competition is market development strategy. In this strategy, the firm has struggled to ensure that it increases its market share in the world market.
This has been done through market penetration in the new markets where this firm had not make entries into. The firm has also developed new markets and new users for its products.
It created new users by developing the machines that could be used in the airports and other sensitive places for security check-ups. It also developed new markets by developing cheaper products that could be afforded by new markets at the lower niche of the market.
Taking the product strategy, this firm has ensured that most of their products are up to the market expected standards. This firm has been keen to ensure that most of its products are not only of good quality but also of the right specifications in terms of size.
In its research and extension unit, this firm has been very creative. It has been voted as one of the most innovative firms in the world for a number of years. It has been keen to introduce new products into the market at regular intervals.
Strategies Used by Apple to Compete in International and Domestics Markets
The domestic market of Apple is the United States. This market is also home market for other giant computer manufactures like the IBM. For this reason, the level of competition is very high.
The world market is also very competitive for there are numerous firms that have mastered the art of producing the computers and phones around the world.
Various Chinese firms have been able to mimic the technologies used by this firm to produce phones with similar features but at very cheap prices because they use simpler technology with cheaper resources.
This therefore forces this firm to develop competitive procedures both at the local and international markets to ensure that it remains competitive in the market.
Strategically sweet sport is one of the avenues that this firm has embraced both locally and internationally. It has taken advantage that its new products are able to satisfy its customers in a way that other rival firms cannot.
This has attracted it a sea of loyal customers. Strategic windows make another strategy that this firm has employed. Through innovative minds, this firm has been in a position to develop new products in the world market to serve different new markets.
An instance is the security gadget they develop to help in detecting weaponry at the airport. This strategic window has earned it a lot of revenue in not only the local but also the international markets.
Corporate Strategy Used by Apple for Diversification and Multi-business
Sadler (45) says that it is risky for a large business unit to specialize in a single area of production. It is important that a firm develops different lines of products that can cushion it in case one of the lines is experiencing a dry spell. Apple stated out as a computer-manufacturing firm.
However, as time went by, this firm realized the importance of diversification of its products. Taking research and development as one of the important aspects of the firm, Apple has managed to develop new products to the market, extending its line of production.
The firm currently has a series of products targeting various markets. Some of these products include the iPod, iMac, iPhone, iCloud, Apple TV and a series of software. This has enabled this firm to operate as a multi-business firm.
This way, it is able to reap maximally from one line in case the other experiences a low season. In its early year, it entered into a partnership with Microsoft to ensure diversification of its products.
This resulted in huge profits, though this partnership later collapsed.
Ethics, Corporate Social Responsibility and Environment Sustainability Used by Apple
Ethics, morality and law are some of the ingredients in a business set up that a firm cannot assume its importance. A business unit has responsibilities that it has to fulfill in order to be seen as a moral firm.
Kline (16) reports on Carroll’s four responsibilities. These include economic, legal, ethical and discretionary measures. The firm has economic responsibility to its owners.
Apple has been very responsible to its shareholders. The firm has been paying regular dividends to the shareholders, making them have good value for their investment in the firm.
Legally, this firm has respected laws and regulations that are put in place to protect such asserts as patents. It has been keen to ensure that it adheres to the set laws on patent and copyrights.
Apple is one of the most ethical electronic firms in the world. There has been a clarion call for the world’s major manufacturers to cut down on their emission of greenhouse gases into the environment.
It is only a few firms, Apple being among them, that have taken a positive reaction to this call. It recently launched a corporate social responsibility to help clean the environment in selected cities around the world.
It has also sponsored planting of trees in various countries around the world, especially in emerging nations in Africa, Asia and other parts of South America. It has also endeavored to employ the locals in various locations where it operates.
This is to ensure that it is responsible to the locals as much as possible. The firm has also maintained morality and ethics among its employees. It has encouraged ethical behavior among its workforce by defining specific code of conduct for all its employees.
This way, its employees are able to asses themselves and determine if they are on the right path as far as their behavior is concerned.
The company has also respected the whistleblowers’ role. When one of the mid management employee reported on the inapplicability of Steve Jobs policies and his excessive pressure on employee when he was the chief executive, the board of directors sent the C.E.O packing, an act that not many firms may attempt.
This was a utilitarian approach to ethics where actions are judged by their consequences. The firm also respects individual’s rights in the firm irrespective of the position held. Justice and fairness is one other guiding principle in the firm that has been relevant to the firm’s current success.
Building a Good Strategy Execution, People and Capability Structure
Strategy can only be beneficial if it is implemented properly. People do the execution of the strategy. Some of the pertinent issues that must be determined in the implementation process include determination of what is to be done, who to do which task, and how the entire team would work as a unit in the process of achieving its goals.
In its mission statement, Apple is very clear on what is to be done. It says that the firm is determined to customer satisfaction by availing products that meets and exceeds customer expectations.
On who should be responsible for the implementation, the firm has its workforce specialized in various duties, ensuring that none of the units overlaps its duties to the other’s and no given task remains unallocated.
This has ensured that the firm runs in a very smooth manner. In its mission to ensure that all its employees work as a team, the firm has ensured that all the employees, master the vision of the firm so that in their respective tasks, they know where the firm aims to be at in a near future.
They will appreciate the fact that they are working as a team towards the same direction, with each member of the team having a specific role to play.
Managing Internal Operations for Good Strategy Execution
Internal operations should be managed if a firm expects to have a good strategy execution. One aspect of managing internal operations is through integration of managers.
Apple has been able to create a pool of flexible managers who not only have deep knowledge of the firm, but also the ability to work with cross-functional teams, are willing to work independently, and have sufficient knowledge on cultural and emotional diversity within the environment.
This team has seen Apple attract talented employees for they know that the company will take care of them. Another important issue is the staffing strategy.
This industry is very competitive. As such, it requires employees who are dynamic, creative and very knowledgeable in their respective postings. In the current competitive world, this firm can only afford to hire the best if it hopes to beat its rivals like the IBM and HP who are giving it stiff competition in this industry.
The employees have also been made to appreciate corporate culture as one of the most important qualities of success in the corporate world. Under very rare occasions, Apple has considered downsizing their employee base to cut the cost of production.
Managing Good Corporate Culture and Leadership for excellent Strategy Execution
Apple is an international firm that operates in many countries. It encounters different corporate cultures in different countries where it operates. In order to ensure harmony in its operations, it has employed assimilation of different cultures into its system.
Some of the cultures have also been integrated into its system just to ensure that it has a rich cultural background that can be implemented by every member of the organization.
The culture of this firm is that cultural integration starts with the management. The management should develop a deep understanding of each culture to be integrated into the system so that they are able to lead other employees in understanding and implementing it.
Works Cited
Desvaux, Martin. “A Synopsis Of Clive Ponting‘s: A Green History Of The World.” Optimum Population Trust Journal, 5.2 (2010): 45-67. Print.
Freeman, Edward. Strategic Management: A Stakeholder Approach. New York: Cambridge University Press, 2010. Print.
Kline, John. Ethics for International Business: Decision-Making in a Global Political Economy. New York: Routledge, 2010. Print.
Sadler, Philip. Strategic Management. London: Kogan Page Publishers, 2003. Print.