Apple Inc. was started by Steve Wozniak, and it has grown into a multinational company. The Company is located in California U.S., and it designs and manufactures IT software and hardware. The current CEO, Steve Jobs and Steve Wozniak founded the company in April 1976.
The success of Apple Company in the early 1970s and 1980s made the company to become a bench market for the industry. This essay will reference Apple Inc. by specifically explaining how the Apple launched and diversified their iPhone products, its distribution and promotional approaches to advance these products.
The introduction of the iPods, iPhones, and the launching of the table computing with the iPad was what led to this success. The success of Apple was through the companys detail strategy management, which is a process of thorough understanding of their organization, competitive environment, and implementing their strategies.
The research involved the company creating objectives, which aided in accessing the organization resources and capabilities as well. It also leads to the exploration of the external environment competitive opportunities and threats. Apple achievement was through focusing on providing high-quality products and services, and at the same time, cultivating good public relationship with their clients in every business deal (Capozzi, Kellen, & Smit, 2012).
They made sure that they applied those principles of the business to maximize their profits and brand reputation. They remained honesty and truthful to their clients, and they handled their customers and suppliers with due respect.
They also protected their product copy right by not revealing the companys confidential information to the outsiders and especially their business rivals. Finally, they conducted businesses in a way that benefited the communities they served by employing high work performance team (HWPT) that remained royal and devoted to the company.
Moreover, the Apple Company had to deal with other forces that affected the PC industry. These included; long term growth, lifestyle and social concern as well as globalization. Additionally, there evolved some key factors that were required by the company in order to obtain compelling profits. These included marketing, skill, technology, manufacturing, and distribution. After considering all these factors, the company was able to compete in global industry.
Moreover, Apple used the macro-environment to determine its success. Internet growth enabled Apple to provide a strong competition to its competitor by staying tuned to customers demands and by updating their research through creating new technologies such as Smartphones and tablets (Tariq, Ishrat, & Khan, 2011).
Furthermore, the Apple Company used a type of business model known as Porters Five Forces Model , which they used as an analysis taken to examine the pressures that were applied to the PC Industry. This enabled Apple to build a loyalty brand with its consumers. Consequently, as the new market expanded due to globalization, the cost of products lowered resulting to rivalry among the competitors.
According to Karlgaard (2012), Apples prices are quiet higher compared to other PC industry competitors. For example, in 2009 and 2010, Apples average net profit margin was 0.2, while HP was 0.07 and Dell was 0.04. The popularity of Apples software and hardware systems, as well the iPhone and iPad, resulted to this competitive advantage to the company in the market.
Another pricing strategy that Apple Company planned and employed was a continual investment research and development, which assisted in improving their current products. The company is also looking forward to expand its distribution methods in order to yield increased and quality sales. The idea behind this move is to provide consumers with quality value products (Helft, 2011).
Owing to the researches of different technologies, various companies have come up with new opportunities that enable low cost manufacturing and innovation.
This new trend is seen with PC companies like Apple, Amazon, and Android. Through these technologies, quality products are produced leading to increased product cost by the end user. Internet growth is making it easier for consumers to have access to direct sales all over the world. Apple Company own such retail outlets, which allow for constancy of brand image and reputation of product; and this enhances local instant feedback
In addition, Apple Company enjoys a competitive advantage over reputable brand recognition. The ability of the company to maintain this based brand recognition is the prime power in their brand. Through revolutionary of computer to mobile device, brand recognition enabled the transfer of companys image from product to product.
Most of the large consumer electronic companies suffer thin profit margins, which is brought about by global competition. Some companies are initially accepting lower profits so as to attain volume sales. Apple Company, together with other top computer makers in the U.S., underwent such distress while they were in the process of product innovation and differentiation in order to raise capital needed for the innovation (Schlender, 2012).
Rival companies, such as Microsoft, started producing their own tablets version, which doubled the opposed PC market. To deal with strategic rivals, the Apple Company focused on smaller devices. Further, it had effectively made use of online advertising to advertise and utilize campaigns on its brand, and hence increased the product awareness.
Apple Company is also looking forward to attaining prospective profitability. Finn-Enrik says that despite the company being huge, for a large growth, there are some opportunities for tablets and other media devices in the near future in some parts of America and Asia.
The Apple is also faced with macro-environment such as global factors due to economic conditions, technological factors, legal, demographic societal and lifestyles as well as natural environmental factors. Due to these macro factors, the company suffered a stiff turn down in 2008 and 2009, but it gained a slight recovery in 2010 (Fisher, 2011).
The US government employed certain measures by encouraging local manufacturers through incentives. The government has employed some measure on cutting down the pollution, which led the Apple Company to set up a recycling plant. These measures of restricting hazardous substances have regulated the production of quality products.
Apple Company went on the fore front campaign, by showing social and environmental concerns and challenging on waste disposal. These shifts yielded to vast move on the success of the company because it attracted customers, who supported its efforts to reduce pollution.
Conclusion
The future of Apple Company is bright. The company should go ahead with the growth strategy in order to increase and expand the current operations and increase their profits and competitive edge. The company should concentrate within the same business area, make innovations and improve the quality of their products to expand their market globally.
References
Capozzi, M., Kellen, A., & Smit, S. (2012). The perils of best practice: Should you emulate Apple? McKinsey Quarterly, 4, 8-11.
Fisher, D. (2011). Buy Apple (And Aetna). Forbes, 188(7), 56-58.
Helft, M. (2011). Steve Jobs Real Legacy: Apple Inc. Fortune, 164(5), 59-65.
Karlgaard, R. (2012). Apple Without Jobs First Trillion-Dollar Company? Forbes, 190(8), 34-34.
Schlender, B. (2012). Apples not-so-secret weapon. Fast Company, 168, 31-32.
Tariq, M., Ishrat, R., & Khan, H. (2011). A Case Study of Apples Success with iconic iPod and iPhone. Interdisciplinary Journal of Contemporary Research in Business, 3(1), 158-168.
Apple is the only iPhone merchandises-manufacturing company that enjoyed a lot of profit after the development and launch of the Apple iPhone 4 in June 2007. The iPhone replaced the iPod (portable digital audio player), which was introduced in the year 2001.
In line with Luther (5, 2011), Apple company was successful on its marketing and sales plans of iPhone considering the amount of sales for the iPhone units made within a span six years. Apple failure concerns the product advertisement procedures. The company involves a great deal of enigma during the product lunches, since most of the introduced products are never available for willing buyers.
People are often forced to line up at the companys main stores or seek similar/competing products from other potential produces. Currently the Apple iPhone 4 is among the favourable smart phones in the market and therefore the company need to strategize on ways of enticing clients and thus remain within a completive edge. Apple has already captured attention of its fan base as evident from the satisfactory nature of customers, but still need to enforce measures of meeting demands.
Background
This report addresses failure that relates to marketing plans. Apple Company has a strong and well-known trade name/mark and users are at ease buying and using its products due to assured quality. However, Apple Company faces various challenges concerning marketing management strategy and inability to balance the products demands and supply.
According to Pride and Ferrell (284, 2010a), one of the most serious mistake that Apple did concerned their iPhone 4 marketing strategy in Europe, were the team underestimated the huge unexploited markets. There were chances for making extra revenue if it had better marketing and distribution strategies in place.
Current Market Mix Plan for iPhone 4
According to Pride and Ferrell (284, 2010a), one of the most serious mistake that Apple did concerning their iPhone 4 marketing strategy in Europe, was to underestimate the huge unexploited markets. There were chances for making extra revenue if the company had better marketing and distribution strategies in place.
The current Apples marketing mix plan is to set pace for potential clients to order and purchase iPhones. Pride and Ferrell (284, 2010b), regard the strategy as the best for selling cell phones globally. Apple regards the iPhone as the next generation IPod.
The biggest reason why the iPhone 4 is able to sell higher than other cell phones globally is due to its physical and multimedia ability to support numerous applications, which are limited on other handsets, however the company fails to notice that other potential competitors are also coming up quite fast.
The Apple Corporation markets the iPhone in a strategic and organized manner that leaves consumers asking for more. The common method the Corporation uses is Television and internet advertising, which makes majority of its potential clients access the latest news and information about the Company. Television does not limit the age and therefore kids are included in this advertising surrounding.
The Apple Website also helps in marketing other updated product since texts, graphics and videos are posted for the subscribers to make comments and purchase the related products. Most customers order their products online and pay through Smart or Visa Cards. According to Magder, this form of E-commerce has seen the company grow immensely, since consumers are able to trust the companys business transactions (1, 2010).
The transactions are also free of any disagreements or business encounters. Furthermore, this has saved customers time, since they only need to log on to the website and purchase instead of travelling to the Companys headquarters to make price quotations and order for new products (Magder, 1, 2010).
The Apple Marketing director makes sure that press conferencing is carried out after a certain period, to update consumers on the companys latest offers. Monthly newsletters are also supplied to community organizations, schools and governmental institutions for advertisement purposes.
After a certain period, the Apple Company carries out a product questionnaire among different countries, towns and villages. Consumers are asked questions about the products, in which case they are supposed to indicate their satisfaction and indicate any advancement they would want done on the products (Magder, 1, 2010).
The recent survey showed that majority of iPhone users originate from United States, which houses many hardware and software manufacturing companies Pride and Ferrell (27, 2010c). According to Magder, more than 20% users are from United States and this provides many opportunities from expansion through proper global marketing strategies (1, 2010).
Currently, having many customers access Apples site and follow the companys marketing scheme, the marketing anecdotes from other competitive companies reduces since every consumer gets the real news in real-time.
The iPhone website acts as a one-on-one means of interaction between employees and clients, since it offers help on various areas for those having problems with their iPhones. Customers can also post questions and in return, the technical staffs reply to their queries.
This forum advertises and eventually ends up assisting the user. Apart from helping, the company website provides tricks and shortcuts for users, when accessing applications with the iPhone 4, such as tips on watching videos, how to expand the screen and much more (Magder, 1, 2010).
Apples Competitive Position
Marketers targets of Apple iPhone 4 were to attract youth of between 20 and 35 years. This was ironical since 48% of these youths do not have the iPhone on analysis of current statistics (Pearson, 87, 2011). Marketers made sure that commercials were simple and attractive, in order to attract more customers.
On a survey that was conducted one month prior to the release of Apple iPhone 4, 72 % of men and 28 % of women were likely to purchase the device. Contrary, many people did not know the iPhone pretty well to consider worthiness of such a purchase at a price of $499.
However, Apple iPhone 4 allowed users to download top applications for their cell phones, thus earning the company a lot of income. Currently, Apple iPhone 4 is the only Smart phone that the company seem to boast about due the over 25,000 applications of the device (Pearson, 87, 2011).
The release price for Apple Iphone4 was $599. The company set the price up because they knew there was no competition between them and other potential rivals. This saw hundreds of thousands users purchase the device. Three months later, the price was reduced to $399 and millions users rushed to make their purchases. Year later, the price was further reduced to $199, 66% less than the release price.
Apple stated that the price reduction was a marketing strategy to attract more people, but analysts said that this came for the reason that there were low sales than the company anticipated (Wooldridge and Schneider, 8, 2010).
Many products have been known to reduce their price drastically after a release a reduction of over $400 within a life span of less than two years is huge. $599 was also a very high price, regardless of the features that the phone carries. This was a clear indication of poor planning and marketing solutions implemented by the firm. The prospective of Apple Company is thus highly compromised by its marketing strategies.
Validity of Marketing Strategy for Apple iPhone 4
According to Hutt and Speh (22, 2009) the Apple iPhone was able to create an immediate enthusiasm among consumers upon it launch, since everyone considered this as a triumph over competitors due to the uniqueness of the design and flexibility. It emerged to be a cool and a must-have gadget even before the first unit could be available in major stores.
On the other hand, Hutt and Speh (22, 2009) argue that for a product to sell successfully, it has to get to the right customers, at the right time and price. Failure to reach a given market projections by firms are due to poor products innovation as a result of meagre quality that fails to meet loyal customers demands.
The launch of Apples supper iPhone 4 therefore demonstrated the companys failure to meet demands. The development of new products such as iPhone 4 also depends highly on the marketing strategy.
Their marketing execution and development strategies enable Apple to excel in supply chain management. It has been awarded the top rank among major competitors such as Nokia, IBM, Cisco, Nike, among others. The company presents a new era of performing marketing activities, based on design, content or ideas.
The iPhone 4 was awarded the top position due to its inspirational software interface, brilliant industrial designs and its unique digital nature. Apples final strategy for iPhone 4 was only to meet rapid demands of its clients.
Conclusion
The only time people lined up was at concerts and places where they needed to get tickets. Upon its launch, the Apples iPhone 4 caused people to line up at then Apple store to experience the launch and make their purchases. The company is able to create great hype around its products but eventually fails to meet the demand the revel generates.
During the iPhone 4 launch, people demands were put on hold for long in majority of the stores. Today, Apple needs to enforce better marketing plans/strategies. There is need for a fresh start because the iPhone sector is highly overcrowded and people are often switching to similar devices from competing firms.
According to Magder (1, 2011), most people will argue that it is not right to advertise a product that has a lot of mystique since it is not available for the average buyer.
It is also arguable that such a marketing strategy may fail to work well since a willing buyer often seek the gadget from other similar manufactures instead of lining up for hours outside the companys main store. Apple iPhone 4 remains the top, best selling smart phone to date. However, management of supply and demand is a crucial aspect that the firm fail to implement in their daily undertakings.
Recommendations
The marketing manager and team must learn that clients already trust Apple Company and are ready or willing to purchase any of their newly launches product. Major support by potential client was evident during the iPhone launch when clients lined up at the main store to vie and buy the iPhone 4 (Magder 1, 2011).
Ensuring availability of new products before official launch is therefore very important. Clients should not experience delays to get hold of new products.
According to Luther (5, 2011), the company marketing mix strategy also requires better and more innovative ways of enhancing the balance between supply and demand. If the company is able to entice users to buying a new product, then this product should first be available in major stores, before the launch.
The marketing and inventory managers must understand that companys failure to provide as per demand causes dissatisfaction as evident when there were huge delays on acquisition of iPhone 4 upon it launches (Magder 1, 2011).
Various technological companies are competing to produce the smartest devices at the least cost possible. This is a sales strategy that marketing and general managers must also consider during their launches and marketing. The need to often upgrade devices for instance by advancing storage sizes, increasing processing speeds, develop more applications and add new features is important.
However, marketing managers must ensure that prices remain constant and viable as an excellent sales management strategy. The company failure to manage pricing is obvious since it introduces a very high price of $599 upon the device launch but reduces the pricing drastically to enhance sales (Magder 1, 2011).
According to Pride and Ferrell (284, 2010b), Apple Companys executives need to understand that the firm collaboration with various influential international companies is important.
Through collaboration, the firm is able to flood the computing markets with latest models of devices such as iPhones. This strategy can assist in management of production, marketing and distribution costs and equally enhance increase of revenue since it would be a long-term agreement.
Appendices
IPhone 4 has a small, slim and portable characteristic, which makes it ideal for both in and out door uses. The Apple manufacturers designed iPhone 4 to Multitask, as it is the case of a computer.
Most clients are therefore purchasing the iPhone today as a communication device, information manager, and entertainment unit, since it facilitates various features all at the same time. The gadget enables users to listen to music, watch video, view photos, make conference calls, check e-mails, in addition to browse the web or view web maps. The illustration below shows a sample of the gadget.
The new mobile phone products from Apple over the years have been outstanding and very impressive to most potential buyers.
The company launched the iPhone in 2007 and this was a stepping block for Apples dealings in the already mature markets, which were highly saturated with willing users. According to most marketing analysts including Ferrell and Hartline (472, 2010), the iPhone 4 is considered a revolutionary product that places Apple milestones ahead of its competitors.
During the launch, the company considered iPhone as a gadget that incorporates the mobile phone and laptop technology into a single interface, thus terming it as a Smartphone. The iPhone 4 developed from the earlier 2008 second-generation iPhone model and the 2009 third generation iPhone (iPhone 3G) model.
References
Ferrell, O. C. and Hartline M. (2010). Marketing Strategy. Mason, OH: Cengage Learning.
Hutt, M. and Speh T. (2009). Business marketing management: B2B. (Tenth Ed). Mason, OH: South-Western Cengage Learning.
Luther, W. M. (2011). The Marketing Plan: How to Prepare and Implement It. (Fourth Ed). New York, NY: AMACOM Div American Mgmt Assn.
Magder, J. (2010 August 10) iPhone4: Brilliant marketing, or bad supply management? Web.
Pearson, T. (2011). The Old Rules of Marketing are Dead: 6 New Rules to Reinvent Your Brand and Reignite Your Business. New York, NY: McGraw-Hill Professional.
Pride, W. and Ferrell O. C. (2010a). Foundations of Marketing. (Fourth Ed). Mason, OH: South-Western Cengage Learning.
Pride, W. M. and Ferrell, O. C. (2010b). Marketing. Mason, OH: Cengage Learning.
Pride, W. M. and Ferrell, O. C. (2010c). Marketing Express. Mason, OH: Cengage Learning.
Wooldridge, D. and Schneider M. (2010). The Business of IPhone App Development: Making and Marketing Apps that Succeed. New York, NY: Apress
With a market capitalization of more than $600 billion, Apple Computers Inc. Apple is the largest technology company in the world (Anon., 2012, para 12). The company boasts itself as the producer of computers and other electronic devices.
Apple is famous for its i products. These include the iMac, iPod, iPad, and the iPhone. The company owes much of its success to the previous visionary leader, the late Steve Jobs. Jobs oversaw the launch of several successful products during his time at the helm of the company.
Apple mainly targets the high-end market that is willing to pay high prices to access high quality products. Customers love Apples products due to their high quality. Apples products have revolutionized the market.
Apple revolutionized the music industry with the iPod and iTunes. iTunes provided an alternative means of accessing music. However, the companys success did not stop with the iPod and iTunes, the company went on to make one of the highest quality smartphones in the market, the iPhone.
The iPhone integrates phone with a music player. The company has successfully launched several versions of the iPhone. The latest version is the iPhone 5. The rate at which the company sold out the pre-orders is testament to how customers love the product.
Apple had pre-orders of more than 2 million iPhones within 24 hours of the launch of the iPhone (Gupta & Ghosh, 2012, para 1). This value was significantly higher than that of the pre-orders of iPhone 4S, which hold the previous record of one million records in the first 24 hours.
The company expects the sale of the iPhone 5 to eclipse its predecessors. Apple Chief Executive Officer, Tim Cook, seems to have followed in the footsteps of the previous CEO, Steve Jobs.
Apples main competitor in the smart phone market is Samsung Electronics. Samsung has a wider product range than Apple. Some of the companys products include semiconductors, phones, flat screen televisions, tablet computers, and home appliances.
The company has been following the lead of other electronic giants such as Apple and the Japanese electronics giant, Sony. However, the Samsung is gradually becoming a formidable player in the manufacture of electronic products.
The company takes advantage of technological innovations to improve its competitiveness. Samsung is currently the worlds largest manufacturer of smartphones. Samsung has a global smartphone market share of 34.6%. On the other hand, Apple has a market share of 17.8% (Ramstad & Lee, 2012, para 11).
Apple Computers Inc
Business organizations are under the constant scrutiny of various parties. Contemporary business practice demands business to engage in ethical activities in both the pre-production and post-production stage.
Failure to engage in ethical activities would lead to tarnishing of the image and reputation of a company, which takes several years to build. Image and reputation are one of the major factors that influence the competitiveness of an organization.
Apple should also ensure that its suppliers engage in ethical activities. Failure to do so may greatly harm the image and reputation of the company, which is one of the factors that determine the competitiveness of the company.
From time to time, various parties have accused Apple of engaging in unethical activities. However, Apple has undertaken several measures to ensure that it always engages in ethical activities.
Apple strives to build excellent working relations with its employees and suppliers. The company fulfills various needs of the employees to increase the productivity of the employees. In addition, Apple has a supplier code of conduct that ensures that suppliers meet certain standards on labor and human rights.
The supplier code of conduct follows international standards of labor and human rights. The company terminates the working relations of suppliers who do not meet the specifications of the supplier code of conduct. The code of conduct dictates that suppliers must ensure that they treat their employees fairly at all times (Rogers, 2009, p. 101).
However, engaging in ethical activities is not just the prerogative of an organization. There are several government regulations that ensure that companies always engage in ethical activities.
Companies should ensure that their activities are economically, socially and environmentally sustainable. The supplier code of conduct ensures that their activities are socially sustainable (Crane & Matten, 2010, p. 32).
Apple continuously audits its suppliers to ensure that they always adhere to the terms of the supplier code of conduct. According to the supplier code of conduct, it is vital for suppliers to ensure that there is no medical discrimination of employees and juvenile (under 18 years) workers receive special protection.
The company prohibits juveniles from working in certain sections of the suppliers manufacturing plant. In addition, Apple offers the suppliers employees training on labor and human rights in their area of jurisdiction. This reduces the likelihood of the suppliers violating the rights of the employees (Bassi, Frauenheim & Costello, 2011, p. 193).
However, these measures only reduce the possibility of suppliers engaging in unethical activities. It is impossible to reduce the likelihood of suppliers engaging unethical activities completely. It is a fact that employees of some of Apples suppliers still work in deplorable conditions.
The suppliers are able to conceal the mistreatment from the regular audit of Apple. Plants in Asia, and especially China, are the major culprits of violating the supplier code of conduct. In 2009, 91 children who were below 16 years old were working in Chinese suppliers plants.
The suppliers paid the children less that $1 per hour (Congress, 2011. p. 79). This is despite the fact that the children helped in making various Apples products, which are expensive.
Regular audits by Apple have enabled it to discover various irregularities in the operations of its suppliers. Apples audit has enabled immigrant workers receive reimbursement of exorbitant recruitment fees. Immigrant employees have received more than $3 million in reimbursement since 2008 (Christopher, 2012, p. 329).
The companys supplier code of conduct dictates that suppliers should offer their employees a 60-hour week with a day off. In 2010, only 32% of the suppliers offered their employees a 60-hour week with a day off. In 2009, 46% of the companies met the standard working hours. Apple publishes its audit report annually (Christopher, 2012, p. 329).
In fact, in 40% of the companies, Apple was the first company to check whether the activities of the supplier were socially acceptable (Christopher, 2012, p. 329). If Apple determines that a supplier regularly violates the supplier code of conduct, the company terminates the contract of the supplier.
This reduces the likelihood of a company violating the terms of the supplier code of conduct. In addition, Apples representatives have a right of making impromptu visits to suppliers manufacturing plants.
This forces the suppliers to comply with the terms of the supplier code of conduct always. However, the large number of Apples suppliers makes it difficult to monitor all suppliers.
Foxconn Technology is one the largest suppliers of Apple. Foxconn is the largest Chinese exporter. The company assembles various electronic products for electronic companies, which include Samsung, Lenovo, Dell, Dell, Intel, IBM, Microsoft, Sharp, Hewlett-Packard and Sony.
Foxconn is the worlds largest contractors of electronic products. In fact, the company assembles 40% of the global consumer electronic products (Van Kerckhove, 2012, p. 67). In 2010, the company was under the scrutiny of various parties after it became evident that a series of suicides in the company were due to the deplorable working condition in the companys assembly plants.
During the same period, an employee who lost an iPhone prototype died mysteriously. Apples head at the time, late Steve Jobs, denied that that Foxconn was a sweatshop. Jobs stated that the suicide rate in the factory was lower than the suicide rate of similar manufacturing plants in the US.
In fact, the company has excellent working conditions. Foxconn gives its employees access to cinemas, swimming pools and restaurants (Christopher, 2012, p. 330). In addition, the suicide rate of the companys employees was significantly lower than that of the public.
These facts made subsequent investigations into the suicides not to be critical of the companys working conditions (Van Kerckhove, 2012, p. 67).
In 2011, 137 employees of a Wintek Corporation subsidiary were victims of n-hexane poisoning (Christopher, 2012, p. 330). Poisoning resulted in muscular atrophy and damage to the nervous system.
The employees used n-hexane to clean various iPhone components. The company offered the employees compensation of between $12,000 and $20,000 (Christopher, 2012, p. 330).
Environmental degradation is one of the major political and social issues. Environmental degradation is mainly due to human activities. Emissions from industries are the major sources of environmental pollution. Therefore, it is critical for industrial plants to reduce their level of toxic emissions.
It would be foolhardy for a company to ignore the environment, as it is the source of the resources for the company. However, it is very difficult to eliminate toxic emissions from industrial processes. Organizations can only minimize the amount of toxic emissions or level of toxic chemical in their products.
PVC is one of the toxic chemicals used in manufacture of electronic devices. PVC is a component of cabling of electronic devices. Apple strives to reduce the amount of toxic chemicals in its products.
Apple was the first company to eliminate PVC from its electronic devices. In addition, Apple manufactures mercury-free LED display (Lannuzzi, 2011. p. 71).
However, the company eliminated the toxic chemicals from its products due pressure from environmental organizations. Apple was also the first electronic company to eliminate cathode ray tubes (CRTs). CRTs contain more than 1 kg of lead, a highly toxic compound.
In addition, the company uses few packaging material in its products. Less packaging material ensures that there is minimal greenhouse gas (GHG) emission in the manufacture of the packaging material (Lannuzzi, 2011, p. 68).
Sustainability demands that companies or their products should be energy efficient. Companies or products that are not energy efficient lead to more environmental degradation as they lead to the release more GHG (Tseng et al, 2006, p. 588).
Apples products are one of the most energy efficient products in the market. The company ditched CRTs for LCDs. CRTs use more energy than LCDs. In addition, Apple strives to reduce the amount of energy it uses in its operations.
The company gives its employees subsidies to encourage carpooling. In addition, the company provides a free bus service to its employees. This reduces the amount of fuel that employees use to get to their offices (Webber, Webber & Wallace, 2009, p. 125).
Samsung Electronics
Samsung also has a supplier code of conduct that ensures that suppliers engage in ethical conduct. The code of conduct ensures that suppliers provide favorable working conditions to their employees. Samsung does not permit companies to employ staff below the legal working age (16 years).
Samsung terminates the contracts of suppliers who fail to abide by the terms of the supplier code of conduct. The company uses regular audits to determine whether the suppliers engage in acceptable activities.
In August 2012, Samsungs audits determined that HEG electronics engaged in unacceptable activities. HEG assembles Samsungs mobile phones. HEG Electronics engaged in inadequate management practices and exposed its employees to unsafe practices.
In addition, the HEG overworked its employees and the suppliers employees worked in unhealthy conditions. Samsung demanded the company to improve the working conditions of its employees. Samsungs auditors did not find any underage employees.
However, there were several underage people within the companys premises (Lee, 2012, para 3). Use of underage employees in HEG prompted Samsung to send a team of 105 Samsung employees to investigate all 105 Chinese companies that supply various products to the company.
This shows Samsungs commitment to ensuring that all suppliers abide by the companys supplier code of conduct.
Innovation is one of the major factors that affect competitiveness in the electronics industry. Electronic companies invest heavily in research and development (R&D).
This enables the companies to develop innovative products that would improve the competitiveness of the companys products. Companies that do not have the necessary funds to invest in R&D usually tend to copy the innovations of other companies.
Therefore, intellectual property violations are common in the electronics manufacture industry. Most electronic companies outsource to China, other Asian countries or Eastern European countries that have low costs of production. This enables companies to reduce their overall costs of production significantly.
China is one of the countries where violation of intellectual property is very common (Lehman, 2006, p. 1). Intellectual property is usually very important to any electronic company. Intellectual property is more valuable than buildings or other physical property of the company (Miller & Cross, 2012, p. 206).
The problem of intellectual property violation necessitates companies to take measures to reduce the probability of the theft of certain sensitive intellectual property.
In most instances, companies ensure that there is internal manufacture of sensitive intellectual property. patenting of intellectual property help in preventing intellectual property theft.
Historically, Samsung has been following the lead of other companies in the development of innovative products. However, the company has recently been a leader in creating innovative products due to several strategic changes within the company.
Samsung and Apple are currently engaged in a legal tussle over intellectual property violations. Samsung has had close working relations with Apple for a long time. Samsung provides Apple with several products that Apple uses in manufacture of various products.
Apple accuses Samsung of intellectual property violations in its Galaxy line of phones and tablet computer. Apple claims that the Galaxys tablets computers and smartphones copy the design and interface of Apples iPhone and iPad. Galaxy tablets and smart phones run Googles android operating system (Miller & Cross, 2012, p. 206).
In August 2012, nine jurors ruled that Samsung violated six Apples intellectual property rights (Ramstad, 2012, para 5-9). Some of the patents that Samsung violated included Apples patents on the shape and icons on the iPhone.
According to the jury, Samsung violated Apples patents on physical design. The jury determined that Samsung knowingly infringed Apples patents. Due to the intellectual property violation Samsung paid Apple $1.05 billion.
However, the penalty was short of Apples request for a $2.5 billion penalty on Samsung due to the intellectual property violation (Vascellaro, 2012, para 1-3). Apple also filed a lawsuit seeking to prohibit the sale of Samsungs products due to patent violation.
This led to the temporary ban on the sale of the Galaxy Tab. However, the court later lifted the ban on the sale of the product (Ramstad, 2012, para 5-9).
The legal battle between Samsung and Apple seems to be a never-ending tussle. Samsung has filed other lawsuits against Apple claiming that Apples newly released iPhone 5 violated several Samsungs patents.
Samsung and Apple are engaged in a legal battle due to their quest to claim market dominance in the smartphone market, which is worth more than $200 billion. The market has a very high growth potential in the future (Vascellaro, 2012, para 15).
Therefore, achieving market dominance would enable any company reap huge financial benefits. Samsung is the current leader in sales of smartphones.
In addition, Samsung has other innovative electronic products. The innovative products are slowly making Samsung a formidable force in the manufacture of electronic products.
Conclusion
Both Apple and Samsung strive to ensure that their activities, and those of their suppliers, are ethically acceptable. The supplier code of conduct ensures that the suppliers activities conform to internationally accepted standards on labor and human rights.
Both companies perform regular audits to ensure that their suppliers conform to the code of conduct. Apple and Samsung are ready to terminate the contracts of suppliers who willingly violate the code of conduct. In addition, Apple strives to empower the employee of its suppliers to reduce the possibility of exploitation by the suppliers.
Innovation is one of the most critical factors in the competitiveness of companies in that manufacture electronic products. Therefore, electronic companies invest vast sums of money in R&D. Due to the importance of innovation electronic companies usually patent their innovations.
Patent violations are common in the electronic manufacture industry. Samsung and Apple are engaged in a legal tussle over patent violations. Both companies accuse each other of violating its patents.
The legal tussle is due to each companys quest to dominate the highly lucrative smart phone market, where innovation and originality is very critical in making a company gain a competitive advantage in the market.
Litigation by both companies due to patent violation is bound to have huge financial implication on both Samsung and Apple.
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Apple Corporation is a leader in IT products, thus differentiating itself from the products. By reviewing its history, the company is a technology leader enabled through continuous innovation. The company pioneered the PDA industry by producing Newton in 1993. As other competitors picked the pace, Apple introduced the iMac in 1998 with new features but easier to use than any other such product in the market (Iliev, Lindinger & Poettler, 2004).
In 1999, the company changed the history of PDAs when they introduced the first electronic book reader, the iBook, allowing Apple to be the first to have a portable computer and a desktop in both consumer and professional segments. Still, the company hit another historical point when it launched the iTunes in 2001 marking the beginning of the new strategy to make Mac the core for the next digital lifestyle. As the competitors struggled to match their technologies with Apple, the company showed its superiority by introducing the iPod which changed music completely.
Moreover, Apple led PDA competitors when they introduced the first flat-screen LCDs for desktops and launched the iLife package which improved versions of iPhoto, ITunes, and iMovie after competitors imitated the digital lifestyle strategy. Differentiation is a feasible strategy in operations, especially if a firm utilizes the intangible characteristics for product differentiation.
The relevant distinctions for Apple are product mix, product features, reputation, and link with others (Iliev, Lindinger & Poettler, 2004). The company establishes its reputation as a leader in innovation by launching an array of products with unique technologies, easy-to-use making the user to always have a new experience when using them.
The mere mention of the Apples iPhone makes every person to think of a computer, a music store, or a LAN system all in one package. The company has really differentiated itself and the products in terms of technologies and their integration for convenience.
Competing on cost
With its humble beginning in 1995, EasyJet has pursued low-cost strategy in its operations that has enabled it to overtake British Airways in terms of the passengers it carries within Europe. The company is aware of the need to lower its overheads and operations costs in order to maintain low cost as their competitive advantage.
With its main office resembling a tin shed next to the main taxiway within the old-fashioned Luton Airport, the companys operations are aimed at lowering costs as much as possible. Around 95% of all seats are sold over the internet, with online booking systems using a capricious pricing system that tries to maximize load factors (EasyJet.com, 2011).
Rather than providing tickets, all their travel details are emailed to passengers as well as booking reference which reduce the costs of issuing, processing, distributing, and reconciling thousands of tickets every day.
In addition, there are no free on-board catering which minimizes costs and redundant bureaucracy. EasyJet does not pre-assign seats on-board and passengers are free to sit anywhere, eliminating the redundant complexity and passengers can board faster. The company flies to airports that are less crowded within smaller cities (remote airports), also preferring secondary airports in case they fly in major cities.
This minimizes the landing charges and usually provides faster turnarounds. Through this, the company is enabled to achieve more rotations on busy routs, capitalizing on aircraft utility. EasyJet further simplifies its operations by offering point-to-point means of travel such that there is no worry about further connections for passengers or their luggage.
The company also has all its administration and management undertaken on the IT systems, reducing cost associated with paperwork and enhances the flexibility in the execution of operations (EasyJet.com, 2011).
Competing on response
Within the United States, Barnes & Noble, the largest bricks-and-motor bookseller has differentiated from competitors through flexible and fast response in books delivery. The company operates about a thousand bookstores across the United States and which are located not more that 50 miles apart (WUP, 2008).
The stores stocks millions of different books including the best sellers. This vast stocking enables the bookstore to have the right books at the right time and at the right place. Incase a customer does not find the book he/she wants from a particular store, he/she need just to drive a few miles and get the book.
In fact, the store makes speedy arrangements to get the book from the nearest store. It is this fast response that has enabled the book store to remain competitive despite the changing market trends which are against the bricks and motor system.
Furthermore, Barnes & Noble uses an inventory tracking system containing many best selling titles and allows the employees to check the availability of inventory in stores, warehouses, and distribution centers. This ensures that the stores are stocked up with the best selling books.
Additionally, the company provides an online bookstore through which customers can buy books (WUP, 2008). The online shoppers do not necessarily have to wait for shipment, but are referred to the nearest store from which they can get purchases. While other competitors are struggling to respond to customers expectations in time, the many book stores for Barnes & Noble allow the company to be ahead of others in fast and flexible of books delivery across the US market.
Apple Incorporation is a leading producer and marketer of innovative products. The companys brand is acceptable in every part of the world. Apple succeeded because of Steve Jobs leadership skills. Many economists have examined why the companys brand might be in jeopardy. The success of Apples brand depends on the strategies employed by its leaders and managers.
Phil Schiller is a professional leader at the company. Schiller safeguards the companys brand reputation (Burrows & Satariano, 2012). Schiller shares most of Steve Jobs skills, impulses, and passions. Apple should use its capabilities in order to produce new products (Finch, 2012).
The future of Apples brand depends on the marketing strategies adopted by its current managers. Steves death will affect the companys brand if the current leaders do not support the best business practices. Apple Incorporation should use the best adverts and marketing methods in order to achieve its goals. The above approach will ensure support the companys brand.
Strategies that Apple can Use to Prevent Going Down
According to some theorists, Apple might go down if the current leaders use the wrong business practices. Apple Incorporation should use a generic strategy in order to achieve its goals. The company can use cost leadership in order to remain profitable. Cost leadership focuses on the best production and marketing practices. Cost leadership reduces the expenses incurred by every business.
Apple can use cost leadership in order to produce the best products. The company should also use its outsourcing strategy in order to produce quality products (Yoffie & Kim, 2010). The company should also attract and maintain its customers. Apple Incorporation should also use the best segmentation processes in order to achieve its marketing goals.
Apple Incorporation should use a competitor-based pricing approach in order to market its innovative products. The pricing strategy will make the companys products are competitive in the market (Finch, 2012, p. 59).
The other strategy is to identify the changing needs of every customer. This approach will ensure every marketer focuses on the social needs of every customer. The marketing strategy should also support the companys vision. The above strategy will make Apple a competitive business firm.
Apple Incorporations Future
The future of Apple depends on the goals and practices implemented by its leaders. According to Burrows and Satariano (2012, p. 2), many people at Apple are against Schillers conservative business approach . Apples brand name will continue making Apple successful. Every customer is ready to purchase the companys products. The company should also the best adverts in order to attract more customers.
The above approach will also support Apples brand. Phil Schiller and his team should use the best business strategy in order to make Apple a profitable retailer in the United States. The company is also working hard in order to produce innovative products. The companys innovative smartphones and PCs will address the needs of every global customer.
The company continues to market its innovative products to its customers. Apple Incorporation should also support the needs of its employees. The practice will increase the companys competitive advantage (Finch, 2012).
The above generic and marketing strategies will also make the firm profitable. This paper explains why Apple Incorporation will remain successful. The corporations managers should use the best leadership strategies in order to achieve every goal.
Apple TV Box is an electronic device which enables users to access different types of electronic content through iTunes. Users are able to access different types of content directly from their computers and other electronic devices to their high definition television sets. Apple TV Box has agreements with various content providers who sell it high quality programs, music videos, documentaries and recordings of live sports events.
The new model of the product has high quality software that allows users to download data from different content websites at a very high speed (Mayes). This is the products most unique feature which will give it a stronger competitive position in the industry.
The patent rights of the product are already secured and it also has a clear copyright which is used to identify its brand in the market. More importantly, the product will allow users to stream two or more live events simultaneously to expand their viewing options.
Market Analysis
The market has various firms which sell different types of products. Some of the products direct competitors include: Roku, Wii, Playstation Vita Box and Chrome cast. These products appeal to consumers who have different needs and expectations (Mayes). The TV box market is projected to grow at a rate of about 8 percent in the next three years.
Sales data for the past three years shows that the product accounted for more than 40 percent of all TV box devices that were sold in different parts of the world. As more people download different types of content directly to their devices, the product will appeal to customers who are willing to pay premium prices for high download speeds.
Customers and Customer Development
The main focus of this product is to offer customised viewing options to different viewers depending on their specific geographic locations. Users in Europe and Asia will be able to purchase different types of services from local providers which will conform to their cultural practices.
Since it is compatible with other Apple devices, it will utilise existing partnerships it has with other international content providers to provide long term value to customers. It is estimated that Apple has gained close to 20 billion dollars from selling digital content through iTunes from January 2012 to September 2013.
The most popular services which customers prefer are: songs, video clips, electronic books, electronic games and software applications. Apple TV Box has been designed to appeal to the lifestyle patterns of customers who use various Apple gadgets which run on iOS (Mayes)
Competition and Positioning
Nintendo and Sony have products named Wii and Playstation Vita Box respectively, which are designed to stream online content and they also allow users to play online games with other gamers in their network. Other products such as Chromecast allow users to access HBO, Hulu, Netflix and YouTube using Wi-Fi and cable network connections (Oreskovic).
The Roku TV box also allows users to stream media files and to access thousands of applications from different websites. The current market value for home electronic products is estimated at 610 billion dollars and is projected to increase to an estimated 950 billion dollars in 2020.
Therefore, the main barriers to entry which competitors are likely to face in the market include: incompatible products, high costs of operations and high costs of marketing. One of the valuable features that will be included in the upgraded product is an education application which will offer modern digital learning solutions to various schools.
Business Model and Go-to-Market Philosophy.
The business model adopted by the firm focuses on increasing overall satisfaction levels of loyal Apple consumers. Apple TV Boxs features are highly compatible with applications on other Apple products which run on iOS operating systems (Oreskovic). Since the product was introduced in the market six years ago, it has been able to gain close to fifty percent of the market share.
Therefore, in the next five years, the product intends to increase the amount of content it provides to satisfy specific viewing segments. The company intends to partner with educational content providers to offer school going children and teenagers an opportunity to expand their learning options.
Consequently, the firm intends to partner with different schools to encourage them to explore new methods of learning which enable students to interact and exchange ideas with one another in and out of their classrooms.
Potential Opportunities
Many customers of various technological devices are looking for solutions that enable them to integrate different types of technologies seamlessly. As a result, new technologies encourage the convergence of different devices to offer more convenience and flexibility to different consumers that use them for different functions.
In addition, more emphasis is being placed on products that enable consumers to interact with other people in different locations to share their experiences (Oreskovic). This shows that in future, more customers will go for products that have enhanced features which allow them to perform various functions at the same time.
The main focus of the product will be to create new demand in underserved markets to help it achieve its projected growth forecasts. It will seek to offer additional solutions such as healthcare, education, real estate mapping and real time information from major financial markets. Diversification will help the product to overcome different market risks which are associated with low sales revenues.
Purpose and Objectives
The main purpose of this market opportunity assessment is to analyse the viability of Apple TV box in the next five to ten years. More people are looking for ways of using technological solutions to increase their entertainment options (Hughes).
The most promising opportunity for this product is its ability to allow users to customise their entertainment preferences using iTunes. More importantly, this assessment will look at the most effective way in which the product will be integrated with the iTunes service to increase the firms profit revenues in the long run. Therefore, the main objectives that this assessment seeks to accomplish include:
Consumer expectations and perceptions towards this product
Effects of technological changes on its long term performance
Effects of substitutes on the products competitive position in the market
Regulatory factors that affect its performance in different markets
Specific product features and how they increase value perceptions associated with the TV box
Distribution channels to be used to ensure customers are able to access the product on time without any delays
Effective methods that should be used to promote the product to increase market penetration in different places where it is sold
Lifestyle factors that are directly related to the products usage.
Primary Data
It is estimated that the product brought in revenues amounting to more than one billion dollars in 2013 which shows that it is very popular in the market. Currently, the products market price in the U.S. is 100 dollars but it is sold at a higher price in international markets due to high taxes and import duties enforced in different countries (Hughes).
A market survey which was conducted by the firm in the U.S., U.K., Germany, Brazil and China showed that the product appeals mostly to middle and high income consumers, aged twenty two to forty.
More than two hundred and fifty consumers took part in the survey and most of them insisted that they constantly download content from iTunes using their iPhones and iPads. However, seventy respondents revealed that the product needs to have gaming features to enable them to play with other users on the internet.
Secondary Data
Some of the most important factors that are likely to create new avenues for competition in the industry include: price structures, features of the product, quality, compatibility, ease of use and overall design. Consumers of TV box products are also attracted to value added services which help them to solve different types of technical difficulties they are likely to face as they use them (Hughes).
The distribution model to be used to sell Apple TV Box in the market will be crucial to its long term success. Channels of distribution are the main links which a firm has with its customers.
Since Apple has its own specialty stores, the firms sales employees will be involved in selling these products to consumers in both local and international markets. In addition, consumers are also allowed to purchase the product using different online payment systems. This will enable the firm to interact with them more to understand how it can solve their needs.
Analysis and Interpretation of Results
The issue of intellectual property rights needs to be addressed more effectively by the Apple with other companies which the firm relates with. Therefore, since the firm has a closed ecosystem, it will be able to increase its earnings from this product because customers will purchase different types of content from its iTunes digital store.
There is an existing agreement between Apple Corporation and top music production companies regarding the manner in which revenues obtained from selling songs users are shared (Murph).
The firm has similar agreements with television networks, book publishers, movie producers and game developers and this will protect the product from any legal issues that may affect its long term market performance. More importantly, the firm owns the products patent and copyright, which shows other entities cannot go to court to claim ownership rights.
Conclusion
In conclusion, the Apple TV Box has a lot of potential in the market because it benefits from Apples closed ecosystem to reinforce its competitive position over other firms. In addition, the product is compatible with other Apple products such as iPhones and iPads and this factor will increase customers value perceptions towards the product.
However, there is a lot of competition in the industry and this is likely to affect the products profits in future. Therefore, this requires the firm to develop stronger relationships with customers by interacting constantly with them to find out their needs and how they can be satisfied.
Works Cited
Hughes, Neil. New Apple TV Box with Motion Controls to Play Key Role for Apple This Year, but iTV Still a Pipe Dream. Apple Insider. Apple Insider, 9 Apr. 2014. Web.
Mayes, Jordan. The Content Case for the New Apple TV. Ivey Business Review. Ivey Business Review, 15 Sep. 2013. Web.
Murph, Darren. Apple Q4 2012 Earnings: $36 Billion in Revenue, $8.2 Billion Net Profit. Engadget. Engadget Publication, 25 Oct. 2012. Web.
Oreskovic, Alexei. Apple Incs Tim Cook Promises New Products, Says TV Set-Top Box Sales Top US$1B in 2013. Financial Post. Financial Post, 28 Feb. 2014. Web.
This paper dwells upon strategic development of Apple and contains certain recommendation on implementation of the most appropriate strategy. The company is famous for its innovative approach and high quality of products and services provided.
However, the corporation holds quite a small market share and some researchers note that the company should expand. Researchers refer to growth of such markets as South America and Asia. It is stressed that Apple could benefit from producing products for millions of potential customers at lower prices to make Apple products more available.
Nonetheless, this approach is unlikely to be effective as it may lead to loss of the market share Apple has now. Appearance of Apple in the market of low-priced consumer electronics will make it develop new strategies to remain competitive in the market where Asian (Chinese and Indian) companies produce very cheap products. Therefore, the company has to focus on innovations.
The present evaluation is based on secondary research. Works on Apples strategic development are analyzed and certain recommendations on how to improve the strategy used are provided. The present research may lack for data on the companys expenditures but available information on Apples revenues illustrates effectiveness of the strategy employed..
Recommendations provided include the following. The new strategy should be comprehensive and involve research, innovation, quality and social responsibility. The company has to produce really innovative products which would shape and redefine the market. The use of green technology and contributing to development of communities will enable the company maintain its favorable image among its customers.
Introduction
Apple is one of the most successful companies and it is famous for its effective strategic development. The corporation managed to remain one of the leading producers of consumer electronics and software even after the recession and financial crisis of 2008. It is necessary to note that the company has to operate in one of the most competitive markets, the market of consumer electronics.
This industry is booming and companies all over the world are trying to enter it and occupy certain niche. It is noteworthy that Apple is facing hard competition on the part of Asian companies that produce cheaper devices with similar options. At present, Apple again has to choose an appropriate strategy.
However, before going into detail on the strategic development, it is important to mention major peculiarities of the company, its history and market. Apple announced that its revenue for second quarter of 2014 (ended in March) was $45.6 billion (Apple reports, 2014). The company is growing and its profits are increasing accordingly.
Apple is famous for its impressive products: iPad, iPod nano, iPhone, Apple TV, iPod touch, MacBook, MacMini and so on (Hitt, Ireland & Hoskisson, 2012, p. 16). The company started in 1976 as a computer business and has provided innovative products, which is regarded as one of its strategies and advantages.
In 2003, Steve Jobs, a charismatic leader, introduced one of Apples products iTunes Online Music Store as a turning point for the music industry and landmark stuff which could not be overestimated (Hitt et al., 2012, p. 16). Jobs was right as it was a great success.
It is noteworthy that the company had an inspiring leader who set the major strategic path for the business. After Jobs, Apple still has really effective leaders: Tim Cook, Craig Federighi and Jony Ive. These executives share Jobs vision and keep focusing on their high end share of the market.
Apple is a globally operating company with over 50,000 employees and it has a vertical structure (Daft, 2014). Admittedly, it is difficult to have a horizontal structure for a global business.
It is also important to note that the market of consumer electronics is very competitive. Thus, Apples iPhone has to compete with products of such companies as Samsung Electronics, Motorola, Nokia. As far as computing and software is concerned, the company has such competitions as Google, Microsoft, Micromax (India) and Xiaomi (China) (Grobart, 2013).
It is necessary to add that the market of smartphones is quite saturated with cheap products produced in Asia. Worstall (2013) stresses that a phone at $700 is unlikely to compete with a smartphone sold for $200 and $300 especially in such markets as China, India, Brazil and Russia. Therefore, researchers see two major strategies applicable for Apple.
Strategic Issues
These strategies are concerned with the choice of the market share for the company. At present, Apply occupies quite a small share of the market. Apples products are seen as luxury and exclusive devices and services.
The use of these products suggests that the user pertains to a specific group of privileges consumers (or simply lives in a developed country with strong economy). As Cook puts it, There is always a large junk part of the market (as cited in Grobart, 2013). Leaders of Apple tend to remain in their niche and do not think about expanding to larger markets.
Nonetheless, some researchers see another option. They stress that Asian, South American and Russian markets are becoming a target for many companies. For instance, Worstall (2013) stresses that the potential of consumer electronics BRIC region (which includes Brazil, Russia, India and China) is increasing and people are more willing to by app-capable devices.
Admittedly, people living in the area will not pay $700 for a phone as they have numerous cheaper alternatives produced in China and India. Notably, Apple is capable of reducing some costs and providing cheaper products.
Nonetheless, Apple can lose its status of a company providing exclusive products and services. At that, researchers emphasizes that even though the company can introduce cheaper products they will be still unable to compete with $100-200 devices.
Brief Literature Review
Innovation
There are numerous ideas on strategic development and each company can choose the best option in accordance with its goals and values. Jaruzelski and Dehoff (2010) claim that Apple has always used a strategy of innovation.
The researchers stress that Steve Jobs did not try to make the companys products cheaper or more available to consumers as he wanted to make innovative things that could change the market and the world.
This strategy made the company one of the leaders in the global market and many companies are trying to keep up with standards set by Apple. Jaruzelski and Dehoff (2010) consider experience of successful companies operating in different markets and infer that the strategy of innovation is winning in the contemporary business world.
Heracleous (2013) calls the strategy used by Apple the Quantum Strategy. According to the researcher, it implies the ability to balance intense efficiency in operations& with outstanding serial innovation and addictive product design
which command premium pricing and redefine markets (Heracleous, 2013, p. 92). The researcher evaluates the strategy used and concludes that it is effective as the company remains the leader and has its small (but profitable) market share.
Importantly, the researcher stresses that this strategy enables Apple (as well as other companies using the same strategy) are able to set trends and standards and, as a result, they are one step forward. Davis and Olson (2008) also emphasize effectiveness of such way of development and notes that most successful companies employ the strategy of innovation.
The researchers also add that it can be difficult to utilize this strategy as it needs significant funds especially when it comes to R&D department. Nonetheless, the innovative approach helps companies achieve high results as well.
Other Components of Success
It is noteworthy that apart from innovation, researchers acknowledge that operational excellence is also central to the companys success. Sharma (2012) argues that Jobs inspiring vision and focus on innovations could not ensure Apples success which was achieved by a combination of innovative approaches and operational excellence.
According to the researcher, the company is successful as high quality and precision are major values shared by employees. Loads of companies choose this strategy and focus on quality and its image. They are valued for these characteristics and customers eagerly buy their products.
Clearly, this approach is appropriate for many industries but consumer electronics is not one of these spheres. This industry is evolving rapidly and a company which fails to introduce new products often loses its customers.
Jaruzelski, Loehr and Holman (2011) also mention the importance of an effective culture. Apple is famous for its culture based on principles of innovation attention to details, excellence and responsibility. The authors note that culture is a key to successful implementation of innovative strategies.
The researchers stress that culture is a set of principles all employees follow. Employees of Apple share companys values and the corporation manages to come up with new products periodically.
Analysis of the Strategic Issue
Winning a Larger Market Share
As has been mentioned above Apple is facing a strategic issue. The company is growing and entering new markets as expansion is one of the most effective ways any successful company chooses (Thompson, Peteraf, Gamble & Strickland, 2012). It is possible to expan in a number of ways. For such global corporation as Apple entering new markets is beneficial.
Apple is already operating in developing countries but still occupies rather small market share. To ensure profitability and growing revenue, the company may choose to introduce cheap devices and occupy a larger market share.
As has been mentioned above, many companies choose this approach in order to obtain millions of new customers in such regions as South America, Asia and Russia where vast majority of people cannot afford expensive products.
The choice of this strategy will lead to sub-issues such as reducing costs and marketing new products. Thus, Apple will have to invest into development of cheaper models of existing devices or new cheap devices. Thus, R&D costs will increase but there are chances that it will be impossible to reduce the price of existing products or new products to $100-200.
More so, products at such prices will hardly differ from those provided by other companies (in China or India). Furthermore, development of cheaper products may extrude attempts to produce innovative products and services.
There are chances that Apple will lose its status of a producers of innovative and luxury electronics and will lose its value. It will inevitably become one of many companies producing affordable products and will have to compete with a variety of other producers.
The companys marketing managers will have to come up with a wide advertising campaign and a marketing strategy to introduce new cheaper products. The company will have to make people know that Apple products have become more affordable.
The use of this strategy will also require the change in the companys corporate culture. The company has focused on innovation and exclusiveness. These values are inappropriate for a company that aims to get a larger market share and sell more affordable devices. Admittedly, all these changes need additional investment.
All in all, this strategy is associated with too many risks and doubtful benefits. A larger market share will enable the corporation to increase its revenue due to sales volumes. Nonetheless, low prices of products and services will not lead to significant increase in profits.
More so, the company risks entering a market with significant competition and, at the same time, lose its advantageous competitiveness. Therefore, this strategy is unlikely to be successful and should not be implemented.
Holding the Same Market Share
Another option is to stick to old strategies. Thus, Apple may hold its market share and remain a global producer of innovative and exclusive products. This strategy was already checked twice during severe crises within the company (Sharma, 2012). Adherence to the old strategy will involve significant investment into R&D as the corporation will focus on producing new innovative products.
However, this investment will lead to increase in revenue as Apples customers are eager to buy from the company as they get something more than a device. They get a sense of being a part of a community of people who value innovation and quality (and those who can afford it).
Marketing of new products will also need additional investment. People should know about novelties. However, this advertising is likely to be successful as customers will learn about a new innovative product which they will want to purchase. It is noteworthy that the companys culture will not be changed and such values as quality, innovation and responsibility will be promoted. Admittedly, effective culture often translates into success.
Discussion
Methods Used
The present assessment is based on the secondary research. Works on strategic development of Apple and its performance as well as data available on the official website are analyzed. Evaluation of the strategy used is based on analysis of its effectiveness. It is possible to note that the use of this methodology can be associated with certain limitations.
Hence, such research may lack for data on the companys expenditures (especially when it comes to R&D) as the works used contain information on revenues rather than losses. Nonetheless, the corporations revenues suggest that the strategy which is being used is effective and there is no need to choose another path. Though, it is possible to highlight some spheres in Apples strategic development which may need improvement.
Research
It is necessary to note that the companys leaders emphasize their adherence to their old strategy of innovation. They do not intend to try to compete with low-priced products in emerging markets. The companys CEO argues, We are not in the junk business (as cited Grobart, 2013, n.p.). As has been mentioned above, this strategy has proved to be effective and, hence, it is no time to change it.
Admittedly, the company is growing and its revenues increase, but it is essential to continue developing and innovating (Thompson et al., 2012). Therefore, the strategy should be based on the principle of innovation and precision.
In the first place, the company should focus on development of a number of innovative products and services. It has been acknowledged that Steve Jobs always felt what would be successful among customers (Hitt et al., 2012). However, serious competition requires more specific data than senses or beliefs. Thus, the company needs to invest into marketing research.
It is essential to understand what customers expect and what exactly they need when they are buying this or that device. It can be beneficial to find out what customers value in Apple products and services. It is possible to implement an internal research but it is better to address a marketing research company which can provide information on the global market rather than a particular country.
R&D
Apples R&D department is very effective as it has come up with a variety of innovative devices. Nonetheless, it is possible to invest into further development of the department. The company employs more than 50,000 people worldwide and it can be a good strategy to launch a wide training campaign.
Employees from different countries have to participate in mutual projects. Employees from abroad can travel to the USA and work on major projects. This can facilitate development of the companys R&D.
The company has had certain criticism on development of different models which do not differ significantly from previous ones. Thus, Daft (2014) notes that it is difficult to come up with innovative products and companies often try to modify products which have already become hits.
However, extensive modification will lead to customers tiredness and dissatisfaction. It is important to introduce genuinely innovative products as well as services as this will attract new customers and will satisfy needs of loyal ones.
Quality
The strategic development of the company should also involve particular attention to the products quality. It is well-known that Steve Jobs routinely returned products to the laboratory and emphasized that Apple must build the best products, period (Hitt et al., 2012). This should be a motto for each employee and a part of the companys culture. Quality control of the company has to be strict and no flaws can be allowed in products sold. This is one of advantageous peculiarities of the company and it is essential to maintain this image.
Marketing
As has been mentioned above, this strategy does not require excessive advertising. However, each new product has to be advertised through the Internet, TV and print sources. The focus of each advertisement should be innovative nature of the product. Existing and potential customers have to associate the company with innovation and development.
Social Responsibility
Some companies focus on revenue or R&D and fail to be socially responsible. Apple should remain a responsible corporation which contributes into development of communities. Development of new products has to be implemented with specific attention to environmental or social projects.
The use of green technology also pertains to innovations and this is a beneficial direction for the company (Hitt et al., 20). Social responsibility of Apple is another advantage of the corporation and this should remain unchanged.
Conclusion
On balance, it is possible to state that Apple is now facing the need to choose whether the corporation tries to get a larger market share or remain in its niche and continues producing innovative products. Analysis of works on strategic development of the company suggests that Apple should adhere to its old strategy as it proved to be successful.
It is associated with fewer risks and it is likely to keep the company in its leading position. The strategy should be comprehensive as it cannot be confined to a vague concept of innovation. Thus, the corporation will have to invest into R&D and control departments to ensure that the products provided are innovative and high-quality.
Apple will also have to pay attention to proper marketing of new products and it is essential to focus on such concepts as quality, innovation, exclusiveness and social responsibility. Finally, the company has to be involved in a variety of social and environmental projects.
The use of green technologies and contributing to development of communities (especially in regions where the company operates) should also be a part of strategic development of Apple. The use of this strategy will enable the company to maintain its status of an innovative company which shapes peoples ideas on electronics, software and life.
Daft, R. (2014). The leadership experience. Stamford, CT: Cengage Learning.
Davis, A., & Olson, E.M. (2008). Critical competitive strategy issues every entrepreneur should consider before going into business. Business Horizons, 51(1), 211-221.
Apple is a leading manufacturer of personal computers (PCs) and mobile devices. This paper begins by analyzing how Apple competes in the PC market. The discussion also examines how Apples strategy has been evolving within the past few years.
Apple has also remained competitive because of its superior smartphones and MP3 players. The paper also identifies the major challenges effecting Apple Incorporation. The paper concludes by explaining why Steve Jobs is an effective strategic leader.
Apple Incorporation in 2010
Apple Incorporation uses appropriate strategies to compete in the personal computer (PC) market. Throughout the 1990s, Apple used the best distribution channels to deliver quality products to different consumers (Yoffie & Kim, 2010). In 2001, Steve Jobs presented a new vision in order to make the company successful.
He also introduced the Macintosh. The new CEO decided to control both software and hardware (Yoffie & Kim, 2010, p. 5). This strength made it easier for the Mac to become a successful product in the global market. The company also introduced a new Mac computer.
These new devices ran on an Intel chip (Yoffie & Kim, 2010, p. 6). Steve also introduced a new operating system for Apple PCs. The company upgraded the OS within 12-18 months. This strategy increased the number of PC sales. The distribution strategy adopted by Apple Incorporation in 2001 made it easier for every consumer to purchase the companys new software.
The company opened more stores in different countries. Apple Inc. also formed new partnerships with companies such as Best Buy. This strategy attracted more customers thus increasing the companys sales. The strategy made it easier for customers to purchase the companys user-friendly PCs.
The companys competitive strategy has changed significantly because of the new market dynamics encountered in the world today. Apple has adopted a digital hub strategy (DHS) in order to address the changing needs of its customers. This situation explains why Apple Inc. introduced the iPhone, the iPad, and the iPod (Yoffie & Kim, 2010, p. 7).
According the case study, Apple Inc. has a strong competitive position. The iPod has become a successful competitor in its industry. The companys MP3 players offer new features such as huge internal memories. The creation of the companys iTunes Store has also made it easier for users of Apples smartphones and MP3 players to down songs and movies. These devices offer the best entertainment to every customer.
Steve Jobs was ready to identify the best strategies and efforts that could make the companys DHS successful. The introduction of the iPod and the iPhone opened new opportunities for the company (Yoffie & Kim, 2010). However, the company must work harder in order to deal with every existing threat. Companies such as Nokia, Samsung, and LG Electronics are producing similar smartphones.
Such mobile devices have superior features that can make Apple less competitive. The internet is also discouraging individuals from purchasing MP3 players. Consumers can now download songs and videos from their mobile devices. This situation explains why Apple Inc. must identify new strategies in order to remain competitive.
Several challenges will confront Apple Incorporation in the coming years. Apple appears to have evolved from being a PC manufacturer to a mobile device company (Yoffie & Kim, 2010, p. 13). The move has made Apple one of the most profitable and successful companies in the United States.
Apples momentum also appears to be unstoppable. However, the future of the company is uncertain because many technology companies tend to fail after several years of success. According to the case study, the failing health of Steve Jobs is also a major challenge facing the company. The case explains why the company should consider new strategies and options in order to retain its momentum.
New ideas and innovations will support the companys goals and expectations. The case study also explains why many companies in the industry fail to realize their potentials. New companies are also emerging in the PC industry (Wheelen & Hunger, 2010).
The existing firms are identifying new options and strategies in order to remain competitive and profitable. According to the authors, Apple Inc. needs to identify new strategies and business practices that will support its current momentum.
Steve Jobs was one of the companys pioneers. He left Apple to start his own software company. Apple was no longer making profits after Steves departure. His return to the company was something critical towards its success. He pioneered new ideas and devices such as the iPhone, the iPod, and the iMac.
This scenario explains why Steve Jobs was an effective leader. He always embraced the best research and development (R&D) practices in order to realize his goals. He also appointed the right people at the company. He promoted teamwork and encouraged his employees to work as teams (Pearce & Robinson, 2013). He purchased new companies and attracted new business partners.
The strategy made it easier for Apple Incorporation to become a leading competitor in the industry. He also diversified the companys core products. He encouraged every employee to embrace the power of innovation (Yoffie & Kim, 2010, p. 9). Steve Jobs departure from Apple was something unexpected. The company is currently repositioning itself in order to support Steves ambitions and goals.
The introduction of the iPhone 5 shows why Apple Inc. has not lost its track. The leaders and managers at Apple Incorporation must promote the best ideas for the company. They should also produce new products that can make the company profitable. The managers must also identify every industrial change in order to remain competitive.
Reference List
Pearce, J., & Robinson, R. (2013). Strategic Management: Planning for Domestic and Global Competition. Boston, MA: McGraw Hill.
Wheelen, L., & Hunger, D. (2010). Concepts in Strategic Management and Business Policy. Upper Saddle River, NJ: Pearson Prentice Hall.
Yoffie, D., & Kim, R. (2010). Apple Inc. in 2010. Harvard Business School, 1(1), 1-25.
Apple is an American multinational corporation operating from California ( Apple Info 8). The company was founded by three entrepreneurs. They include Steve Jobs, Steve Wozniak, and Ronald Wayne. The aim was to develop and sell personal computers. It was initially incorporated as Apple Computer Inc. However, it was later renamed as Apple Inc.
Today, the company produces and sells computer hardware and software, as well as other consumer electronics. Some of its most popular brands include the iPhone, iPad, iPod, and Mac desktops and notebooks. The products are of high quality and attractive to consumers. Apple also produces consumer software for its brands which includes the OS X and IOS operating systems, iTunes media player, Safari web browser, and the iLife and iWork creativity and productivity suites. As such, Apple Inc. is one of the most successful and healthy IT brands in the United States and beyond. It is a leader in the electronic industry (Mallin and Finkle 65).
The high quality of Apples products is attributed to the adoption of technology and emphasis on innovation in the company. The entity focuses on building a loyal customer base by fostering relationships with consumers. The companys link with the consumers is so strong to the extent that people save money for years just to buy an Apple product (Mallin and Finkle 66).
In spite of the tremendous success experienced by the company, the company faces many problems that threaten its profitability. With the increasing complexity of business in the industry, Apple problems range from policy and regulations to technological and information overload. In this paper, the author takes an in-depth look at one of the major challenges facing Apple in China with the aim of offering a new solution to the problem.
Apple Inc. in China
Apple manages its businesses primarily on a geographical basis. According to the company, its reportable operating segments are generally based on the nature and the location of its customers. America forms Apples largest geographical market segment. It accounts for 36.75 percent of the total revenue collected by the company (Mallin and Finkle 65).
Traditionally, China is also a large consumer of Apples products. However, with the recent economic crisis in the region, the growth of this company in this market has gone down from 48.61% in 2011 to 30.76% in 2012 ( Apple Info 2). In spite of this, the continent remains the second-largest geographical segment for Apple. It accounts for 23.1% of the total revenue ( Apple Info 9). The Greater China segment includes China, Hong Kong, and Taiwan. With regards to the smartphone, China and Asia form the largest market in the world.
To this end, 26.5% of these gadgets are sold in the region ( Apple Info 8). In China, Apples tablets control 79% of the market share ( Apple Info 7). The fact is reassuring to potential investors given that the tablet market in China is expected to expand in the coming years. The company has contracts with the second and third largest mobile couriers in China. It is also believed that Apple is trying to reach out to China Mobile, the largest telecommunications company in the country as a marketing strategy ( Apple Info 7).
It is important to note that China not only provides a large customer base for apple products but also plays host to the companys major manufacturing plants ( Apple Info 4). They are mainly located there because most of the components on the iPhones and iPads are manufactured in the country. Assembling the phones in the United States would hence cause huge logistical challenges in shipping. It would also impact negatively on the ability of the company to change suppliers ( Apple Info 4). Chinese plants are also larger and more flexible compared to those in the US. As such, they can hire and personnel with ease. The country also has a large supply of qualified engineers than those found in the United States. Labor in this Asian economy is also cheaper and more willing to work (Lashinsky 12).
Challenges Facing Apple Inc. in China
The companys expansion into China has created billions in profits. However, the company has also faced numerous new challenges as a result of its expansion into the country. Some of the issues have greatly threatened the companys growth and image (OGrady 129). The company also exposed itself to new external factors that it would not directly face in the United States. For instance, the company was exposed to recurrent labor problems in China. The problems are associated with societys desire to maintain the status quo.
Outsourcing factors work on very thin margins. The major reason is that the aim of most high tech is to maximize their profits. As such, they try to cut back on labor costs ( Apple Info 3). Firms from the Western nations are unable to decipher the operations of their business partners. It is mainly because labor legislations in the US dissuade firms from regulating outsourced subsidiaries. Such regulations would make them joint employers and increase the risks of legal suits (OGrady 34). In the China segment, Apple has particularly to deal with the low morale of its foreign staff.
Low Morale of Workers in Apple Inc., China
May et al. provide a working definition of morale among employees (77). It is regarded as the emotions and attitudes of workers towards their employer and the work in general (May et al. 56). The level of morale among the workforce informs their productivity. For example, workers who are contented with their work have high levels of self-esteem. On their part, firms with a workforce that is dissatisfied with their work have low levels of morale (May et al. 288). The contemporary labor market is undergoing major transformations.
Consequently, managers must learn to handle their employees differently. A number of strategies can be adopted to boost morale among employees. One of them includes increased flexibility and innovativeness among the leaders. Employees who lack motivation are less efficient. In addition, they are more likely to skip work compared to their motivated counterparts. As a result, firms incur huge losses as a result of such a labor force. Keeping employee morale high is hence of great importance in maintaining a highly productive and loyal workforce.
As seen earlier, Apple is largely affected by low employee morale. However, it is important to note that only the China segment of the company is affected. Most of these employees feel undervalued by the company and attend to their duties only because they have to. The employees in China have been known to drag themselves to work and positive indicators such as laughter is a vague fantasy for them (Chan, Pun, and Selden 115). The employees increase the profit margin of the firm. However, their low morale leads to reduced productivity and increased turnover. As a result, Apple Inc. is unable to attain its goals in the Chinese segment.
Causes of Low Morale at Apple Inc., China
Researchers have often attributed low morale to poor management practices. However, this has not always been the case. It was especially important to note that Apples workers in the United States are reported to have the most positive and dedicated employees with high morale while their counterparts in China score the lowest morale in the industry (Chan, Pun and Selden 115). In the section, the author explores some of the factors that have led to such inconsistencies in Apple Inc.
Inhumane Labor Practices
Apple Inc. has often faced heavy criticism for the poor working conditions at its contracted manufacturing plants in China (Lashinsky 23). In 2006, the mail alleged that sweatshop conditions existed in factories in China. It was especially in areas where Foxconn and Investec operate. The companies are contracted to produce the iPod for Apple Inc. According to the article, Foxconn employed over 200,000 workers who worked and lived in the factory and regularly performed more than 60 hours of labor per week. The workers were paid a mere $100 per month (Mallin and Finkle 73). In addition, they were accommodated within the establishments. The management charged them for rent and food. The employees used more than 50 percent of their salaries on living expenses. After the story came to light, Apple worked on improving the working conditions.
However, this was only done on paper. It is mainly because, in 2010, workers in China planned to sue iPhone contractors over poisoning from a cleaner used to clean LCD screens (Mallin and Finkle 72). The employees were not informed that they were likely to fall sick. In a later investigation by BBC in 2014, it was proven that Apples contractors in China still imposed excessive working hours on their employees, and other problems still persisted. Apple heavily disagreed with BBC report that conditions hadnt improved since the Foxconn suicides of 2010. Apple claimed that the company was working hard to improve the conditions of their employees (Chan, Pun, and Selden 110). Such inhumane conditions have greatly affected the employees morale since the employees feel used by the company as only a means to an end. The long working hours prevent the employees from being able to pursue other talents and duties.
Unhealthy Working Conditions
Some of the employees working inside Apples plants in China spoke out on the unhealthy working conditions in the company when interviewed by BBC. The clip showed how employees producing some of the iconic products of the firm work under deplorable conditions (Chan, Pun, and Selden 112). However, Apple claimed that suppliers in China had improperly disposed of hazardous waste and falsified records. In 2010, more than 40 employees were poisoned at the Lianjian establishment. They had been exposed to poisonous chemical hexane (Mallin and Finkle 65). It is used by the company to wipe clean the iPad display screens and speed up efficiency.
To reduce costs, the contracted company had failed to provide proper aeration during the cleaning procedure. Another report by an independent labor union in China claimed that workers in one of Apples contracted company lived in overcrowded dormitories lined with the mound and crawling with bedbugs (Chan, Pun, and Selden 112). The company was also reported to use hazardous substances such as mercury and arsenic yet no one informed the employees of the location of these substances in the production chain. Such conditions have led to low morale among the workers since the working conditions are inhumane. Employees who fall sick constantly as a result of poisoning lose their positive attitude towards their jobs leading to even suicides as was seen in the suicides of 2010 at Foxconn (Chan, Pun and Selden 112).
Lack of Open Communication
Communication and morale among employees are closely related. For example, the lack of open lines of communication between the employer and the workforce leads to reduced productivity (Chan, Pun, and Selden 106). The reason is that most workers have ideas and suggestions that can be used to improve the operations and products of the firm. In Apple, all decisions affecting the companys segments are made from the headquarters in the United States (May et al. 83). The local subsidiaries in China are not consulted even with regard to problems that directly affect them.
As such, there is a low perceived organizational support among Chinese employees. They feel that the firm disregards their contributions and opinions. It is a great failure on the part of Apple. It is mainly because the workers in the contracted companies have a better experience with the components of the device and can offer the best design and architecture improvement ideas (Chan, Pun and Selden 112). Lack of communication access with the management makes the workers feel neglected and used. They lack the incentive to put in more effort into their jobs than they are paid for. As such, Apple risks missing out on innovative ideas. In addition, discontentment among employees increases.
Wasted Potential
According to Mallin and Finkle, there are several causes of low morale among employees (68). One of them is the wastage of talent (Mallin and Finkle 67). Many people apply for jobs at Apples contracted companies with the hope of working and helping grow the leading company in the electronics industry. However, they are discouraged when they feel that they are overqualified for the tasks given to them. In addition, failing to establish a link between skill sets and job requirements may also lead to reduced morale.
When this occurs, boredom sets in. The workers start planning on how to exit the firm (Chan, Pun, and Selden 114). Such employees who would have ultimately helped in making the products better and less faulty end up leaving the organization with their innovations. Most workers expect to progress within the firm. They may desire for more challenging tasks. Apple Inc. in China is unable to offer this. Overworking the employees kills the urge for new tasks. The failure to capitalize on the talent of the workforce leads to reduced morale.
Poor Leadership
Apple Inc. earned about $40 billion in profits in 2015 ( Apple Info 5). Its final quarter in that year, during which the company pulled in $18 billion, was the most lucrative quarter in the history of mankind. The company was predicted to earn over $50 billion in its next financial year ( Apple Info 5). Mr. Tim Cook, the current CEO of the company, has steered the firm to new heights of success.
As such, many people regard him as a good leader. However, a critical analysis of the situation in the organization reveals that this may not be the case. The reason is that the reported low levels of morale among the workforce mean that the management has failed to address the underlying causes. It might be as a result of his management style or pure ignorance. Additionally, the causes of poor morale in China have persisted over many years with no real changes in sight (Lashinsky 12).
Effects of Lack of Morale on Apple Inc., China
As seen earlier, when employee morale is high, productivity rises and when low productivity falls and its particularly harder to maintain talent. Lack of morale in Apples China segment has however had a more rampant effect on the company as seen below.
Selling of Product Information to other Companies
Apple Inc. was involved in a legal tussle that lasted for more than 12 months. However, the ruling made by the Federal Appeals Court favored the firm. Samsung was prohibited from cloning certain features of the iPhone (Lashinsky 52). Samsung was ordered to make adjustments to some of its products. For example, the company was told to remove the autocorrect feature in its products ( Apple Info 10). It is not the only time that Apples products have been heavily copied. In 2014 during the release of the iPhone 6, an emerging Chinese smartphone maker Digione claimed that Apples iPhone 6 and 6 Plus copied the design of its own smartphone line ( Apple Info 10).
The device is sold under the giants brand in China. It is regarded as a low-end phone. The company apparently filed the patents earlier than Apple. While the companys complaint may be genuine, many people believe that the patents of the iPhone 6 may have been leaked by the workers at the processing sites hence allowing the company to file the same patent application as Apple. Xiaomi is also a startup company that is heavily inspired by Apples product design. In 2015, the company made more sales than tech giants such as Samsung and Apple in China (Chan, Pun, and Selden 112). Dissatisfied employees are often involved in the selling of such information that allows product copying. Overworked workers with low morale are not loyal to their employers and hence easily sell important information to competitors without an ounce of guilt.
Constant Lawsuits
Apple has found itself at the center of endless lawsuits over the past few years. In 2010, Chinese employees were making arrangements to take iPhone contractors to court. Their major concerns included poisoning from a product used to wipe LCD screens. Some of the workers even claimed that they were not informed of the possible occupational hazards they faced in working in the plant (Chan, Pun, and Selden 112). While this was a justified lawsuit and did not necessarily result from low morale, it has been proven that employees with higher morale seek to solve their disputes internally. It has also been proven that employees with low morale are more motivated to sue their employers than satisfied workers (OGrady 246). When Apple was sued over patent lights of the iPhone 6 by Diogenes, the company is said to have suspected that the product was leaked to the company by one who its employers. Such acts of disloyalty result from employees with poor morale levels.
The solution to the Low Morale in Apple Inc., China
Improved Working Conditions
As is evident above, low morale can do more harm than good to a company (OGrady 246). As such, Apple Inc. needs to boost the morale of the employees as soon as possible. First and foremost, we suggest that the company should dedicate a significant amount of its profits to bettering the working and living conditions of its employees. It is mainly because as seen earlier, the low morale among the workers in this segment is caused by the poor working conditions in which they work. Apples approach to production should not be guided by capital gains. On the contrary, the process should be informed by the need to come up with quality products using a small but highly qualified and satisfied workforce.
Research has shown that a qualified and highly motivated workforce can produce better results and products in the same amount of period that a larger but lowly motivated workforce would take (May et al. 246). Additionally, since its employees in the contracted companies live within the premises, they should be provided with better housing conditions hence allowing them sufficient rest.
Better Labor Practices
The company should renegotiate the number of hours worked by its employees in a single day to acceptable levels. Workers in some of the companies such as Pegatron on the outskirts of Shanghai work for up to 16 hours a day (OGrady 129). Some of the workers have also claimed to have worked over 18 days in a row despite repeated requests for a day off. It is my suggestion that Apple should draft its own set of standards spelling out how factory workers should be treated and the acceptable labor practices they should be subject to.
The company should also ensure that quality concerns are addressed by putting in place strict rules that are to be followed by manufacturers during the production phase. If a given stakeholder fails to adhere to any of the principles, the company may decide to terminate its engagement with the producer. Such practices will ensure the workers work under acceptable conditions. With better working hours, the morale of the employees will be raised as they will feel appreciated and respected by the company.
Awarding Loyal Employees
The company can use this strategy. Workers need to feel appreciated for their contributions to the firm ( Apple Info 2). In spite of Apple being headquartered in the United States, the company should ensure that it meets its employees once in a while and reward extraordinary employees. For instance a simple thank you delivered in person by the companys CEO can go a long way in raising the morale of the employees. The productivity of the firm is likely to rise even higher. Consequently, Apple Inc. can record more profits in the Asian markets.
Conclusion
Apple Inc. is one of the most successful companies in the electronic industry. While the United States segment of the company gets most of the credit for the companys success, its evident that the largest contributors in the manufacturing industries in China are hardly recognized. Their morale is greatly lowered since as a result of the neglect they are forced to work in inhumane labor conditions and dangerous and unhealthy situations. It is clear how low morale in an organization can lead to huge losses both directly and indirectly. However, the analysis of the companys segment in China reveals that most of this problem resulting in low morale can be remedied.
Works Cited
Apple Info 2016.
Chan, Jenny, Ngai Pun, and Mark Selden. The Politics of Global Production: Apple, Foxconn and Chinas New Working Class. New Technology, Work and Employment 28.2 (2013): 100-115. Print.
Lashinsky, Adam. Inside Apple: How Americas Most Admired-and Secretive- Company Really Works, New York: Business Plus, 2012. Print.
Mallin, Michael, and Todd Finkle. Apple Inc.: Product Portfolio Analysis. Journal of the International Academy for Case Studies 17.7 (2011): 63-74. Print.
May, Kyle, Julia Hout, Jacob Reidel, Human Wu, Archie Coates and Jeffrey Franklin. Apple. 4th ed. 2012. Brooklyn, New York: CLOG. Print.
OGrady, Jason. Apple Inc.: Corporations that Changed the World, Westport, Conn.: Greenwood Press, 2008. Print.
Introduction: Apple, Inc. and its Place in the Modern IT Universe
In the realm of the XXI century world, information technologies are more than merely a tool for communication they are the tool, which shapes peoples attitude and behavior, not to mention the fact that IT is becoming the leading factor in determining ones business success.
The ones that are capable of retrieving and processing information faster than the rest of the organizations are capable of executing impressive influence, and the ones that define the flow of data practically rule the entire world; Apple, Inc. is one of such organizations.
Problem Identification: When the Genius is Gone. Competition Rates and the Related Issues
It should be noted that the success of the Apple Company is predetermined by a variety of factors, among which information processing is the effect of a successful implementation of the companys strategies (How to build a great company culture Forbes, 2013).
Apples mission and vision are the basis for the organizations success, as the case study conducted by Chapman, Hoskisson, & Christian (2012) shows. It is worth noting, however, that the company is facing a range of issues at present. Unless these issues are addressed, the Apple, Inc. is likely to have to fight with a major crisis.
Another problem identified in the case, the issue that was tackled once quite successfully, yet is posing a tangible threat to the organization, the unceasing competition between Apple and Microsoft is affecting the former in a rather negative way (Apple info, 2014).
Indeed, though engaging in competition is an important part of entering the domain of the globalized market, it is crucial that the process of competing with other entrepreneurships should not take the entire time and effort that a company can spare. Apple, in its turn, seems to be in a major crisis after the death of its founder and the subsequent necessity to search for both the further sources of technological inspiration and the means to brand the new products in order to attract the target audience.
Situation Analysis: The Measures Undertaken and Their Efficacy
It is remarkable that the stellar success of the firm has been attributed to Steve Jobs and his unique manner of leadership for quite long. Indeed, he was the brain behind every single project of Apple; however, seeing how successful the company is nowadays, several years after his untimely death, it is reasonable to assume that Apples organizational values predetermine the companys impressive growth.
Moreover, the increasing competition rates and the necessity to face Microsoft, Apples key rival, in the target market, makes the production and promotion processes barely possible in the Apple, Inc.
It is worth keeping in mind that the issue of competition was rather topical even when Steve Jobs was around. The latter, however, adopted a unique approach towards the problem; as the case study conducted by Chapman, Hoskisson, & Christian (2012) shows, Jobs preferred the following strategy:
Microsoft not only paid an undisclosed amount to Apple, but also made its Office 98 suite compatible with Macintoshes. Jobs then proceeded to change the companys sales strategy in 1997 to encompass direct salesboth online and by phone. (Chapman, Hoskisson, & Christian, 2012, C-4)
The aforementioned solution shows that the company used to follow a specific strategy, which presupposed that the products crated by the company should only be compatible with other products offered to the customers by Apple or the service that cooperates with the latter.
The results were quite impressive; however, it is worth noting that in the realm of the XXI century, such an approach hardly seems reasonable. Instead of being devoted to a single brand, people feel inclined to experimenting, as Chapman, Hoskisson, & Christians (2012) research has shown; hence, the Apple, Inc. should consider the possibility of producing the items that are compatible with the production of other companies.
Identification of Alternatives: What Can Be Done
It would be wrong to assume that the course of actions chosen by the company leaders recently is the only possible means to solve the problem and prevent the crisis that is threatening the Apple, Inc. at present. Apart from exploiting the already existing brands, including i-Phones, and promoting the concept of the Apple TV (Chapman, Hoskisson, & Christian, 2012, C-9), the company should consider the possibility of creating a merger with a young yet promising company.
There is no need to stress that the avenue chosen for the company to tackle the emerging issues is rather flawed. It is quite risky and fraught with a range of negative consequences in case of a failure. However, at present, the reconsideration of the organizations attitude towards economic and technological rivalry is crucial to Apples further success.
Analysis of Alternatives: Choosing the Most Efficient Path
Though the alternatives to the decision taken by the Apple, Inc. seem rather alluring, it is worth keeping in mind that these solutions also presuppose dealing with certain negative aftereffects. For example, the idea of expanding through acquisitions might seem the best choice possible in the situation of extremely high competition rates.
More to the point, by expanding through acquisitions, Apple would be able to reduce the amount of liabilities by splitting them with the companies that it would merge with. However, the alternative solution also has a couple of major drawbacks (Ritholitz, 2012).
Recommendations: Getting Ready for the Great Revival
Despite the untimely death of its founder, the Apple Company continues to evolve and remains at the top of the worlds most famous IT companies. One might argue that betting on their ability to produce unique an innovative ideas on a regular basis, the companys leaders are treading a very thin ice, the effect that the Apple, Inc. witnesses at present shows that the company has chosen the right track to develop.
It should be noted, however, that the company has been known for its innovations in the first place; in fact, Apple has made its name by providing the gadgets that break new grounds whenever they are released into the market. Therefore, changing the course would mean rebranding the entire company, which seems a very risky move for the organization at present.
More to the point, the reputation that the company has now seems unique and original; therefore, by adopting a different strategy and shaping the mission and vision of Apple, the company leaders will most likely witness a rapid drop in the customers interest towards the production of Apple, as well as a drop in sales. More importantly, considerable efforts will have to be taken to come up with a new strategy for branding the company.
Reference List
Apple info (2014). Web.
Chapman, R., Hoskisson, R. E., & Christian, G. (2012). Apple Inc.: Keeping the i in innovation. Stamford, CT: Cengage Learning.