Apple Strategic Management: Planning and Management Process — Apple Company Essay

Introduction

In every organization, there is a need to have an effective strategic management plan. In the contemporary world, the need for an effective strategic management plan has significantly increased due to the increased level of competition in the market. The contemporary business world has been characterized by a very high level of competition, which has increased the need for effective strategic management processes.

Strategic management can be viewed as the process through which an organization formulates and implements critical decisions, which plays a pivotal role in determining the performance of an organization. The ability of an organization to meet its long-term goals is determined by its strategic management processes.

Through strategic management, an organization can easily achieve both its long-term and short-term goals. Most of the top-performing companies in the global market usually have the most effective strategic management practices. Apple Inc has well-developed effective strategic management practices. This has helped the company to retain a high level of performance.

Apple Inc has managed to offer unique products in the market, a fact that has enabled the company to win a significant proportion of the market share. For instance, the company has managed to provide high-quality products when compared to its competitors.

It has also managed to develop a good relationship with its customers, a fact that has enabled the company to attract and retain a large number of customers. Apple Inc also consults high-performing companies while seeking outsourcing services. In the process, the company has managed to retain a significantly high level of performance.

Apple Inc has utilized its available resources maximally, a situation which has also contributed to its success. For instance, the company has highly productive and experienced personnel that have significantly contributed to the company’s high level of performance.

The company also has adequate financial resources, which have supported perpetual research activities. Continued research has enabled the organization to maintain a high level of innovation. Through these priorities, Apple Inc has managed to develop a good reputation for quality products hence attracting many customers.

In the recent past, the market has drastically changed. More competitors are entering the industry, a thing that has resulted in risky price wars. In order to resolve this problem, Apple Inc has decided to expand its market so as to increase its level of sales.

Description and Analysis of the Sector of Industry

Apple Inc was founded in 1976 in Santa Clara, California. The establishment of the company was the contribution of Steven Jobs and Steve Wozniak. The two were led by the passion for developing a computer that was more user-friendly than the existing computers.

A couple of years after its establishment, the company recorded a drastic increase in the level of its sales. In 1984, the company made a major step when it unveiled the Macintosh computer, which earned the company great recognition. Since then, the company has been engaged in innovations and development, which has helped it introduce quality products in the market.

Apple is a multinational corporation with operations in a number of countries all over the world. The company is centered in the United States, and it is involved in the manufacture as well as marketing of computers. The company has been in the industry for a long period where it has produced a wide range of computers.

The company is involved in the production of products such as iPods, iPhones, and Macintosh computers. The company is also involved in the production of other products like iPads. For instance, the company introduced a unique ipad2 which has recorded a recommendable performance in the market. Ipad2 has several features that make it unique from others, especially those provided by its competitors. It is very thin, and therefore it is more portable than the other products.

This attracts a significant number of customers because most people do not like carrying gorgeous electronic devices. This product also has batteries that can last for more than ten hours. In other words, Apple has managed to introduce into the market high-quality products hence winning a significant number of customers.

The history of Apple Inc can be traced back to 1976 when the company started in California. Since its establishment, the company has concentrated on computers. However, the company has done significant work in the entire electronic industry.

In connection to this, the company decided to omit the word computer in its name to Apple Inc, that more describes its achievements not only in the computer world but also in the entire electronic industry (Malhotra 2007). The company has a total of about 37,000 employees. The company maintains good working conditions for its employees while giving adequate attention to their motivation. This has helped in employee retention hence retaining competent and experienced personnel.

In the recent past, Apple has been widely known for its digital entertainment devices, which are widely used all over the world. It has introduced a wide range of entertainment devices, which have recorded a high level of performance.

The PC industry is characterized by a large number of players who operates in the industry. Apple Inc is one of the oldest players in the industry. Since its entry, many other companies have entered into the industry. This has affected Apple’s market share significantly since they intensify the level of competition in the industry. For instance, the market share for Apple fell by 8% in 1983.

In the recent past, there have been negotiations requiring Apple to license the Mac OS. For instance, Microsoft and Bill Gates insisted that Apple should license Mac OS in the late 1970s. However, Apple failed to license it. As a result, Microsoft developed its operating system.

PESTEL Analysis

In every organization, it is important to carry out the PESTEL analysis in order to make critical organizational decisions. This analysis is of great importance to Apple Inc. For instance, this analysis enables the company to understand Political, Economic, Social, Technical, Environment, and Legislative factors which may have a significant impact on the organization’s activities.

Social analysis is of great importance to Apple Inc, especially in the current contemporary competitive market. In order to interact with its customers adequately, Apple Inc has opened its own retail stores in different places around the world. Through their outlets, they provide repair services and collect the views of the customers at the same time. In the process, the company manages to improve the quality of services to its customers.

Through environmental analysis, Apple has managed to understand its market networks. For instance, the company manages to understand the costs of locating its stores in various places. The company locates its stores in places where it minimizes costs and maximizes sales at the same time.

This has helped the company in maximizing its profits. Environment analysis also helps Apple understand public opinion regarding its products. This information plays a pivotal role in future innovation plans. This is because innovations should be directed toward the satisfaction of consumer needs.

Vision, Mission and Objectives

Vision

Over the past, Apple has recorded a recommendable performance through invention and reinventions. The company is committed to providing the best computing experience to users, including educators, creative professionals, students, and other consumers worldwide (Brainmass 2004). The company has managed to realize this by providing high-quality software, hardware, and internet offerings.

Mission

Apple is determined to maintain a secure and quality environment, safety, and health for its customers, employees, and the entire community all over the globe. The company emphasized the need to maintain a friendly environment for the current as well as the future generation. In order to achieve this, the company has integrated all these aspects into its management practices to facilitate realizing its vision.

Competitors

As already noted, the contemporary market for PC has become more saturated. This has increased the level of competition in the industry. There are several negative consequences associated with a high level of competition. For instance, increased competition may result in price wars. This may threaten the performance of an organization.

Apple’s main competitors include Hewlett-Packard, Dell, and IBM. Since Apple is involved in the production of a wide range of products, it also faces competition from Microsoft in a range of areas in the personal computer software industry (Malhotra 2007). The computer market has been characterized by a high level of technological development both in software and software advancement.

Therefore, there is stiff competition faced by each of the manufacturers. Failure to innovate would mean a complete exit from the industry because consumers are seeking computers that are up-to-date with technological advancement. Through this management, Apple managed to revive its activities.

The company later continued with value creation in the organization, which led to significant growth. Apple has a group of experienced and competent engineers who have played a major role in innovations and the development of new ideas. Under Job’s management, the organization has managed to utilize these resources in order in the most useful ways.

The company also has several retail stores which are operating in different parts of the world. This is another important resource that has helped in advertising as well as distributing the company’s products. Through its stores, Apple has managed to collect information from consumers about their views on the product.

This information plays a pivotal role in directing future innovations. It would be an organization’s wish to produce goods and services that satisfy their needs. This information is therefore necessary for maximizing the level of consumer satisfaction.

Through its stores, the company has managed to develop a good image and brand, providing quality service to the customers. Over the past, many companies have failed in their effort to distribute their products through their own stores, but Apple has recorded a very good level of performance. Therefore, retail shops are a valuable resource to Apple since not many organizations have managed to realize this.

Resources & Capabilities

Apple has a wide range of research, both tangible and intangible. In order for any organization to maintain a high level of performance in the market, there is a need for adequate resources to facilitate the process of meeting various goals.

One of the major company’s resources is based on its ability to maintain a high level of innovation. Apple Inc has managed to maintain a high level of innovation in its products. This has been facilitated by its ability to conduct intensive research.

As a result, the company has managed to provide products that are up to date with technological development. This has been realized through teamwork, which has encouraged the exchange of ideas among the employees. This has significantly contributed to the company’s ability to win and retain its customers.

Apple has well-developed networks and relationships in its operations. For instance, the company has a very good relationship with OEM partners. This has provided the company with an opportunity to outsource some of its manufacturing processes. As a result, the company has managed to produce high-quality products. The company has also managed to reduce its operational costs.

One of the most valuable resources to the Apple Company is Steve Jobs. Steve has recorded a recommendable level of performance at Apple under his management. The company recorded a drastic improvement soon after he started managing the organization. For instance, when he discovered that the failure of the organization was a result of the leaders during the period, he sacked them and made various adjustments.

SWOT Analysis for Apple Inc.

Every organization has its own strengths and weaknesses. Similarly, Apple Inc has several strengths and weaknesses. The company has a number of strengths that have significantly contributed to its success. On the other hand, its weakness undermines its effort to retain its high-level performance.

Strengths

The company has enjoyed a stable line of products which is easy to use. Over the recent past, the company has integrated its operations with Microsoft products, and others have helped the company in developing a wide customer base. The company has managed to retain a high level of innovation.

This has enabled it to introduce high-quality products with more features. For instance, the company introduced ipad2 early this year. The ipad2 has come with a wide range of features that have attracted a wide range of customers. In addition, this product (iPad2) has a long-life battery that can last for ten hours. This is a major improvement since most of the similar products have low battery life.

Apple Inc has also enjoyed financial stability. The company has adequate cash reserves, a fact which has helped the company in funding activities like research which fosters innovation.

The company has also managed to retain a high level of innovation. This has been realized through continuous research and development. The management has realized the need for research to maintain continued innovation and development in its product.

Therefore, a significant amount of funds is allocated to the research operations. Research processes have also enabled the company to improve the quality of its products with time. This has helped to increase the level of customer satisfaction.

Apple Inc has already developed a strong brand. This has developed a strong relationship with its customers hence forming a stable customer base. The company’s products have a good reputation throughout the world. It is, therefore, even easier to market its products in the global market.

In other words, a strong brand name has increased efficiency and reduced operational costs in the company. It costs a lot in terms of financial and time resources for an organization to build such a strong brand. Therefore, this provides a great opportunity for the company.

In every organization, the working personnel plays an important role in determining the performance of an organization. Some leaders can dip an organization into failure, while others can promote success. Steve is one of the most important leaders who have been of great importance to Apple.

Before he joined the company, Apple experienced hard financial situations which threatened its existence in the increasingly competitive market (Malhotra 2007). The company was also characterized by a low level of innovation before Steve joined the management. However, soon after joining the company, he made drastic changes that led to changes in operations that encouraged innovation and fostered new ideas.

Weaknesses

Despite of wide range of strengths associated with Apple Inc, the company has some weaknesses. These weaknesses have tended to threaten the company’s efforts to achieve its goals and realize its missions.

Apple Company has been one of the strongest players in the United States market. Over the past, the market has been faced with tight economic difficulties. The saturation of the US PC market has even made things worse. The company is therefore forced to spend a lot of cash at the expense of increasing market pressures without strategic innovation integration.

Opportunities

Apple has several opportunities which form room for further improvements. For instance, the company has the opportunity to develop its music player and iTunes into mobile phone format (Datamonitor 2006). This provides a great opportunity for the company as it will help in expansion.

Another opportunity for the company lies in the wide range of its wireless products. The demand for wireless products is expected to increase in the future. Therefore, the company will be able to increase its sales in the future. The market will expand, and the company will be able to increase the number of its customers. Apple has positioned itself with the necessary resources in order to benefit from this growth (Datamonitor 2006).

For instance, the company has managed to come up with a wireless technology known as Airport. Through this technology, users can create computer networks and enjoy the internet without necessarily having cables (Datamonitor 2006). Through the Airport technology, users can access a high rate speed at a radius of 150 feet from where the airport base is located. This opportunity will provide a good base for the company’s growth.

In March 2006, Apple’s market share in the US for MP3 players increased to 78% from 71% in December 2005 (Datamonitor 2006). However, the company’s performance in the international market remained relatively lower. The company is planning to penetrate further in the international as well as the domestic market. This will help in increasing the company’s market share.

Threats

Apple Inc Company has been faced with several threats in its effort to expand its market share. One of the major threats that face the organization is strong competition. The company is faced with a very high level of competition in all its fields of production, ranging from software to hardware, among other products. The industry is also characterized by a very high level of innovation which has led to the introduction of new products in the market with performance, price, and feature competition.

This competition has resulted in price wars. Some of Apple’s competitors have significantly lowered the prices of their products in an attempt to increase their market share. As a result, Apple’s financial status may continue to deteriorate since the level of competition is continuously rising. This leads to a reduction in the profit margins.

Another threat facing Apple Inc company is the slowdown in the Eurozone economy. This may be accompanied by a high level of unemployment. As a result, the level of spending falls because disposable household income is relatively low. A household bubble that may burst at any time also poses a big danger to the economy. These economic uncertainties affect the level of spending negatively, a thing that has led to a significant cut down in information technology products.

Strategy Diamond Analysis: Apple Company

In the contemporary world, every organization has its own strategies aimed at realizing its individual goals. However, the most important things to consider are the effectiveness of these strategies. An organization may implement strategies that may be of little importance in a given situation. Therefore there is a need for preparations in order to have effective policies.

Policy diamond contains various facets, which include Arenas, Vehicles, Differentiators, Staging, and Economic logic. The facet arena implies that the strategy must match the market arena. For instance, Apple Inc locates its stores in the areas where its customers are located.

This helps the organization in maximizing its sales by utilizing the available opportunities while minimizing its costs. Differentiators are unique features of the firm. In this case, Apple has managed to manufacture both software and hardware. This differentiates the company from other companies. Through these differentiators, Apple is able to achieve positive performance (economic logic).

Vehicles, on the other hand, help an organization in applying its strategy to reach its destination. Apple has been using internal development to realize its goals. The company has intensified research which has helped maintain continuous innovation. Research helps in the generation of new ideas and therefore promotes innovation.

Business Strategy

As already noted, Apple Inc has recorded a commendable performance over the past. An effective business strategy that the company has applied has to a greater extent, contributed to its success. Most of the successful companies have managed to develop and execute effective business strategy. This can clearly be described through the strategic positioning model.

It has been revealed that the main problem which Apple faces is competition. In order to overcome this problem, there is a need for the company to have an effective strategic positioning. Through this strategy, Apple has managed to position itself among other organizations in such a way that it has managed to stand out from many.

Apple’s strategic target is in a broad industry and characterized by broad differentiation. Apple has managed to differentiate its product through innovation. This has been the main factor that has promoted the company’s success over the past. A good example is when Apple dominated the PDA market when it introduced Newton in 1993.

Later, the company introduced into the market iMac, which was a device that was easy to use. These were just some of the innovations which the company has developed. Through the strategy of the product differentiation, Apple has managed to reduce threats that are posed by a high level of competition. Although differentiation comes along with a cost, this cost acts as an entry barrier to other companies.

Apple Management Strategy

In its effort to maximize its performance and profitability, Apple has applied a diversified strategy in its production operation. Apple Inc is involved in the production of both hardware and software. The company has managed to apply its wide range of competence to manufacture software and hardware that are compatible to maximize the performance of its products. The company also has resources that are necessary for the production of both software and hardware.

Apple Inc is also involved in the production of various computers. These include iPhones, Pad, Macintosh, and Apple TV, among others (Baxter 2010). This has helped the company to make maximum use of its available resources. For instance, the company is able to distribute its resources in various businesses hence saving on costs.

Each of the company’s business is focused on a number of product types. For instance, notebooks and desktops are two kinds of products under Macintosh. Through such a strategy, the company minimizes costs because various product lines can share resources. The products may also supplement each other. This strategy has significantly helped the company in maximizing returns.

Competitive Advantage

In the contemporary world, where the level of competition is extremely high, the need for a high competitive advantage has increased. Organizations with a high level of competitive advantage are mostly the top-performing in their respective industries.

Apple success can, to some extent, be attributed to its competitive advantage. For instance, the company has managed to retain a high level of performance while other companies face hard times. Apple has remained unstoppable while its competitors face difficult times.

Since its development, Apple has managed to differentiate its products. This is unlike its competitors, who are now struggling to differentiate their products. The company has managed to develop both software and hardware. This combination has improved the quality of their products because they can manage to develop the software which is most compatible with its hardware.

The company is led by the principle that an organization that is serious about coming up with effective software must also be serious about developing effective hardware (Bajarin 2009). This is because in case one of these is not effective, then the resultant performance will be poor.

Therefore, in order to satisfy the needs of their customers, Apple Inc has managed to manufacture both the software and the hardware. This strategy has significantly enabled Apple Inc to maximize the value of its software. This strategy has also helped the company to win a significant proportion of the market share.

For instance, the company has managed to make high-performing software known as iLife (Bajarin 2009). This software is the best of the software used in creating music, DVDs, and movies, among other functions.

In other words, Apple Inc has managed to handle successfully the production of both software and hardware. Many companies deal with either software or hardware. This combination is demanding, and therefore most of these companies are forced to specialize in either production of software or hardware.

This has undermined the value of their products since they have to rely on products from other organizations for compatibility. For instance, a company specializing in the production of hardware will rely on software from another organization. Therefore, it is a great opportunity for Apple to handle the production of both.

Another Apple’s competitive advantage lies in its retail strategy. The company has come up with a strategy of coming up with its own retail stores. However, their idea to come up with their own retail stores was received with a lot of pessimism since many companies had tried and failed in this strategy before.

Contrary to this conception, Apple did very well after launching its own retail stores. The main reason why Apple retail stores were successful was that the company managed to identify the factors which contributed to the failure of many companies that attempted to open their own retail stores.

The main reason why these companies failed was because of improper identification of the best location or even lack of priority. Apple managed to make perfect decisions in both cases. This has helped the company reduce its operational costs, a thing that has helped in increasing its profitability.

Apple has emphasized the need for good services for its customers. It has been extremely careful about how people buy its products. Apple authorized small shops where it ensured that they provided all Apple products and accessories. In addition, these outlets provide repair and support for the customers.

By recognizing the need for quality service for its customers, Apple Inc has managed to maintain quality service for its customers throughout its market network. Close interaction with its retail shops has also enabled the company to build close relationships with its customers, a priority that most organizations in the industry have not managed to access. Previous research has indicated that most of the company’s customers prefer buying from the company’s stores (Bajarin 2009). This can be attributed to the quality services offered by these stores.

Through these arrangements, Apple Inc has managed to maintain an effective support strategy. By provision of repair services and support to the customers, it generates even more sales. For instance, the customers can shop for other products in the store as they wait for their repair to be completed.

This interaction has also enabled the company to have direct conversations with its customer as well as their potential customers. This provides good information to the company for future decisions. For instance, the products may be modified depending on the needs of the customers.

VRINE Model: Apple

The VRINE model gives an analysis of Valuable, rare, inimitable, or non-substitutable resources that an organization has. The ability of an organization to access such kinds of resources or products contributes to developing its competitive advantage.

Apple has managed to differentiate its products through innovations. By maintaining continuous innovations in its products, Apple has managed to offer unique products in the market. This has helped the company in attracting and retaining a large number of customers.

Through research and development, Apple has managed to acquire patents. This protects the organization’s contributions from imitation. Therefore, exploitation of such resources is restricted and therefore offers a great opportunity for the company.

However, the industry has been faced with a very high level of competition, a factor that has forced the company to improve its products to retain its customers. Apple has also managed to provide both software and hardware. This provides a good opportunity for the organization because it can be able to develop the best compatible software for their hardware.

Value Chain-CAGE Distance Framework

Apple has a very successful value chain which has been characterized by a high level of achievement. Apple Inc distributes its market all over the world. Therefore, the company distributes its products to people from diverse cultural, geographical, administrative, and economic backgrounds.

This can be viewed in terms of cultural, administrative, geographic, and economic distance framework (CAGE distance framework). CAGE distance framework helps in identifying and assessing the impact of distance on various industries (Ghemawat 2001).

For instance, the European economy is different from the American economy. The economic condition can significantly affect the performance of a product in respective markets. For instance, the economic downturn in the Euro region in 2005 led to unemployment and other economic uncertainties, which led to cutting down on spending on electronics. This situation posed a major problem to Apple since the company’s level of sales fell significantly.

BCG matrix Analysis

The BCG matrix has been used by several organizations in their effort to realize their goals. The chart is mostly used to assist large organizations like Apple Inc in making critical decisions on how to allocate their financial resources accordingly. The BCG matrix is very helpful to Apple Inc because it helps the organization in allocating resources in the best way. As already noted, Apple is involved in a number of businesses. For instance, it produces both software and hardware, which is not the case with many organizations.

Through the BCG matrix, an organization categorizes its business into units. These include stars, cash cows, question marks, and dogs. On categorizing their business units, the business would then move its finance from cash cows to stars and question marks that have higher growth rates. For instance, Apple’s new products, like iPad2, have a high level of demand. Therefore, more money should be allocated to its production.

Recommendations

From the discussion above, it is clear that Apple Inc has recorded a commendable performance in the computer industry. The company has managed to provide quality services to its customers to a level that the majority of organizations have not managed to achieve. The company has also managed to maintain continuous innovation. This has helped it to differentiate its products.

However, the high level of competition in the industry has subjected the company to a big risk. The cost of production has also increased which has posed a threat to its financial stability. Therefore, there is a need for the company to consider coming up with necessary measures to eliminate these threats.

To start with, there is a need for the company to consider production costs. This can be achieved by considering the application of the most efficient methods of production, which minimizes their costs. For instance, the company may consider relocating some of its production functions to regions where it can access cheap labor.

It is also advisable for the company to consider formulating an effective knowledge management strategy. Knowledge management will help the company in improving the performance of its employees. When employees’ productivity is high, the company will be able to reduce its average cost per unit of production.

This strategy will help in reducing the total production costs effectively. Knowledge management will also help in maintaining continuous innovation hence attracting more customers. It is also advisable for the company to consider intensifying its research activities. Research is the major key to innovation.

Another way through which the company can overcome this problem is by increasing the number of its retail stores to allow its customers to access their products easily. This will also help in advertising the company’s products. By so doing, Apple Inc will manage to expand its market share despite the high level of competition. All these strategies will help Apple Inc in overcoming threats posed by increasing levels of competition and increasing costs.

Reference List

Bajarin, B. 2009. Apple’s Competitive Advantage. Web.

Baxter, K. 2010. Apple’s Mobile Future: Corporate and Business Strategy. Web.

Brainmass. 2004. Apple Computer Inc. Web.

Ghemawat, P. 2001. Distance Still Matters: The Hard reality of Global Expansion. Web.

Malhotra, H. 2007. Apple’s Success Is a Lesson in Corporate Strategy. Epoch times Washington, D. C. staff. Special Edition-August 2007.