Since its inception, apple has witnessed one success after the other. It invested in high quality products which made it a market leader from the very earlier days of its incorporation. Borrowing from the famous saying that successful companies do not compete in a sector but rather strive to shape the nature of the sector, Apple endeavors to technologically improve its products.
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The firm heavily invests in research and development to ensure that it keeps up with the ever changing customer needs. Unfortunately, despite the successes, the competitive nature of the technology industry poses some strategic challenges to Apple firm.
The main strategy of apple has been to come up with state-of-the-art technology that would satisfy customer needs. Products like iTunes and iPods that apple introduced to the market in 2006, has enabled the firm to command a substantial percentage of customers.
Moreover, in the year 2007 Apple introduced an I-Phone which not only helped the firm in increasing its market share, but also led to rise in prices of the firm’s stocks. With substantial efforts directed towards innovation, Apple has been able to be a technological leader in the industry.
However, the firm operates in a first-cycle market where there has been a paradigm shift in technology. The competition especially in personal computers is very stiff and each firm in the industry is trying to outsmart the others. Apple can be able to comfortably offer it products at high prices to the crateful design community.
However, the reverse is true for personal computers to individuals unless someone is looking for sophisticated features. On the same note, other firms are offering their products at lower prices than Apple. It is important to note that in the technology industry, it is impossible for a firm to maintain its competitive advantage for long.
Despite the advances that Apple has been able to make, there are new threats in the industry. Switching costs in the technology industry has drastically reduced thus increasing the rivalry from other firms for example, Dell, HP and IBM. On the same note, switching costs for customers are low thus placing the customers at a very strong negotiation position.
This requires strategies that can increase the switching costs. Moreover, the shrinking United States market calls on the firm to venture into other markets. Unfortunately, in a market where regulation is not that that efficient imitation can not be avoided and Apple needs to enhance its strategic decisions.
Apple has various weaknesses which include its heavy investment in research thus increasing its operating costs. Additionally, the firm highly depends on Motorola and IBM for the processor chips which put it in a precarious position incase the firms make unfavorable decisions.
However, Apple has various strengths vital for its future endeavors. Firstly, its closed operating system is secure and not susceptible to computer viruses and hacking. Secondly, it designs complete products which not only come with applications but also peripheries. Additionally, the firm has been praised for its high horizontal and vertical integration. Similarly, the firm is design and innovation oriented which is a crucial feature in the technology industry.
Despite the strategic challenges facing Apple, the firm has many opportunities to solidify its market control. One of the opportunities is to take advantage of Mac OS which has gained the reputation of being safe, reliable and secure among the customers.
Similarly, Apple can capitalize on exposing the weaknesses of its closest competitor, Microsoft, and thus sell its brand as a superior one. Moreover, the firm will have to increase its overseas outlets to ensure that it increases its sales. However, it is important to note that strategic decisions will need to be made faster and effectively to avoid imitation and to counter its competitors.