Managing Business Strategy of Apple, Inc.

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This essay provides help in obtaining a good understanding of the environmental factors affecting the organization and their inter-relationship to formulate a sound competitive strategy, which is imperative for the success of an organization. The analysis of the strategic direction of Apple, Inc. clearly address the issues that are facing the organization and analyze the situation by the means of applying the concepts and tools taught in the leading to the formulation of specific strategic direction and plans of action for the Apple, Inc.

The essay will provide a brief background of organization and industry in which it operates and competes, as well as undertake a situational analysis in order to evaluate the vision, mission and current strategy of the organization and how it influences its overall success.

Furthermore, the research will provide the organization’s external, internal and competitive environment using the relevant tools learned in the module such as PESTLE (political, economic, social, technological, legal, and environmental) analysis, SWOT (strengths, weaknesses, opportunities, and threats), TOWS analysis, and Porter’s 5 Forces.

The past strategic choices will be assessed and critiqued; and generic strategies and growth strategies for the future direction of the organization will be proposed by taking into account any expected changes in the environment and/or its competition. At the end of the essay, the recommendations for the further business strategy of the Apple, Inc. will be provided.

The industry and the publicly traded corporation within that industry that I have chosen to write about in this essay is Apple Inc. In order to evaluate the segments of the general environment, forces of competition that are the most significant for the corporation, the external threats affecting this enterprise and the opportunities available to the corporation and the greatest strengths and most major weaknesses of the company, the Supplier Code of Apple and a strategic analysis of Apple Computer Inc was examined.

The Supplier Code of Apple is believed to be one of the most scrupulous and the toughest among the industrial electronics, as the company holds a strict policy towards its suppliers. As the Supplier Code shows, by 2014 Apple went deeper into the supply chain in order to disclose and correct problems that cannot be fixed by action plans and audits. While exploring these issues, the company focuses on training and educational programs in order to bring real changes into the supply chain.

Apple, Inc. trails its vision announcement and mission declaration in order to uphold its competitive approach. The vision statement depicts the course of the corporation’s evolution and merchandise manufacture. On the other hand, Apple’s mission declaration designates the activities required to guarantee that the corporation remains to be on its achievement pathway. Apple’s up to date vision statement has been presented by the CEO of the company Tim Cook, who specified:

We believe that we are on the face of the earth to make great products and that’s not changing. We are constantly focusing on innovating. We believe in the simple not the complex. We believe that we need to own and control the primary technologies behind the products that we make, and participate only in markets where we can make a significant contribution. We believe in saying no to thousands of projects, so that we can really focus on the few that are truly important and meaningful to us.

We believe in deep collaboration and cross-pollination of our groups, which allow us to innovate in a way that others cannot. And frankly, we don’t settle for anything less than excellence in every group in the company, and we have the self- honesty to admit when we’re wrong and the courage to change. And I think regardless of who is in what job those values are so embedded in this company that Apple will do extremely well. (Apple Inc 2015, para. 14)

Apple’s mission declaration has altered with the course as well. The corporation reflects the altering business scenery that has an impact on the potentials of what Apple, Inc. is capable of. The corporation is familiar with the altering business market and commerce. As a consequence, Apple’s up to date mission proclaims that is Apple manufactures Macs that are recognized as the best processers over the planet, as well as OS X, iLife, iWork and specialized software (Apple Inc 2015).

Apple is considered to be the frontrunner of the modern musical revolt with its technology and the materials available at the online store. Apple’s mission declaration appears to be rather precise in specifying the present and future actions of the corporation. The particulars about the particular produce lines are comprised in order to demonstrate the company’s existing condition.

While choosing from the primary sectors, the two segments that impact the Apple Inc. the most are the sociocultural segment and economic segment. In an economic segment, the asset rank of the personal computer turns the struggle for market interest to be more severe and excessive.

The entire computing commerce has been entering the period time era where nothing but the determined and tenacious continues to live. However, the wide popularity of the personal minicomputer with the probable income is an attraction to those competitors with the statistic of personal computers in use growing from five million in the 1980s to sixty-five million in the 1990s.

In the socio-cultural segment, the personal computers have entered the digital era; furthermore, the computers are growing into more and more indispensable feature in any company, in the administrative and scholastic associations, and learning sector such as seminaries, colleges, and institutes in particular.

The requests from these representatives of the educational sector are constantly growing. However, regrettably, Apple’s preeminence in the retail has been outdistanced to Dell through the whole of the 1990s. When Apple had reclaimed its established extent of an asset, it appeared to be a stimulant for the readjustment and reset. Another impact on the personal computer retail is the development of digital generations that are not only an actual but a promising compelling customer in the respective retail market.

The next assessment based on the socio-cultural examination is the fact that while the community is developing, the population, and the young generation, in particular, would prefer to form alternatives that are contemplated to explicit their eccentricity and their distinction from the others. The representatives of the young generation would choose the production that is designated to follow them anywhere they move.

This tendency is encouraging the company and its adversaries to chase the additional financial worth for the customer-focused maintenance and custom-built production, which appear to be accurately the beneficial fields of Apple Inc. Its custom-made servers are pointing at both exclusive and cheap customers, proposing a wide variety of colors and elegantly arranging their exclusive and dignified production in order to hold the attention of the consumers, who are attentive to the aesthetic determinants.

The two forces of competition that have the most impact basing on the Porter’s model are industry rivalry and bargaining power of buyers.

The concentration of contest between the contending companies is very high. While fractionizing the complete retail that Apple has entered, we are able to distinguish that there are encounters in all places of this competing setting.

In the hardware field, just over 6 percent of the worldwide desktop computer market and below 10 percent of the portable computer market was belonging to Apple in the year 2000. Dell, HP, and Compaq, IBM, Gateway not standers-by in this running while Apple‘s market share for the both products decreased by half in the period between 1995 to 2010. While in the software field, the heavyweights are Microsoft and Sun.

At the same time, in the consumer electronic battlefield, the iPod is facing an inevitably fierce fight with Hard Disk Walkman and MP3 players, portable multimedia players, Mini Disk and Hi-MD players and even the mobile phones with a certain multimedia functions, which are constituting the substitutions group. (Jinjin 2013, p. 96)

The bargaining power of buyers appears to be immense. The primary target customers of the company are the scholarly institutes, institutions of higher education and academies in the education field, and market buyers. Apple’s dominating status in the education field, unfortunately, has been misplaced by Dell Company.

Attempting to retain its position in fifteen percent of the retail in this field, Apple has to convince those companies to obtain the efficiency of the Apple production and then produce the ordering scheme. In extension, the acquiring of the production by the organizations in governmental and the educational field appears to be largely corresponding to Apple’s transactions, so their bargaining power is highly immense.

Apple ought to commit its energies to organizing a tight connection with competing companies from top to bottom in order to retrieve the market share in this area of activity. The separate customers at the moment tend to gain thorough and complete information about the production they are buying.

For the most part, the customers want to find much better utility and the decreased financial value. However, they usually don’t have the capacity to affect the whole financial system straight to particular magnitude. As a result, the bargaining power of buyers has been decreasing slowly. On the contrary, the customers possess a lot of alternative trademarks in the hardware and software area; moreover, they would appreciate a reduced alteration of price when they determine to select another inclination.

The number of personal computers in use grew from 5.5 million in 1982 to 65 million in 1992. The popularization of Computer guarantees increasing demands. Computing technology is rapidly evolving. Technology evolution brings in the innovation and upgrades opportunities.

Customer-focused services strategy meets the demands of current socio-culture. From May 2011 to now, approximately 50 company controlled Apple retail stores are in operation, most of which are located in high-traffic locations such as shopping malls and urban shopping districts. (Jinjin 2013, p. 100)

The most displayed opportunity for the Apple Company is that PC is growing into an increasingly popular device; as a result, there always is an expanding consumer request, not only from particular customers but also from administrative and scholarly institutions. Furthermore, the appearance of advanced electronics provides an advantageous opportunity to enhance the already existent production and introduce several innovations.

While supervising a launch of a new product or a service, choices are conducted about the comparative importance of advance objects, the intentional effectiveness, and arrangement of development undertakings, the chief development signposts and models, instruments for management between the team members, and resources of observing and adjusting the assignment. There are several methods of launching a new product or service, such as digital and traditional means of communication.

The performance of launching a new product is usually evaluated by the lead time to manufacture the product, the price of the expansion effort, the industrial price of the service, and the produce’s eminence or appeal in the market (Griffin 1997). Foster et al. (1985) deliver an outstanding debate on how metrics can be applied in order to explain the connection among communication and launching and commercial incomes.

Cohen et al. (1996) have depicted that these presentation procedures are frequently operated against one another. Other investigation researches designate that these actions could have dissimilar impacts on company’s income in dissimilar markets; as a result, it may not continuously be suitable to force-fit one approach towards communications to every development position (Utterback 1994).

The commodity status of personal computer makes the battle for market share is all the more intense. An emergence of substitute products constitutes a threat in the consumer electronic market. Apple’s dominance in the education market throughout the 1990s is being lost to Dell. Worldwide, Apple fares worse. It is in ninth place with 2.4 percent market shares. The most alarming fact is that between 2005 and 2010, apple’s share of the market for both products decreased by half. (Jinjin 2013, p. 100)

Product characteristics could be characterized in order to conclude the description of a product by the means of the variations and derived forms. The characteristics of products are considered to be aspects, which could be adjoined to the description of a product in order to broaden the definition of merchandise.

The most frequent examples of the product characteristics are amount, shade, quality, form and substance (Adeoty 2000). The characteristics listed above could be adopted for refining or searching the needed product. After the descriptions of the existing characteristics are established, they are able to be appointed to a specific product and later to devise more products.

The classification of products into consequential divisions enables marketers to come to a decision, which approaches and schemes should be used in promoting merchandise or utilities of a company. There are many categories of arrangements that are used by the marketers (Walsh 1992).

For example, one of the approaches towards the categorization of the product is its division based on the frequency of its use. The products that are most likely to be used one time, like recess packets, demand entirely distinct marketing approaches that the products that are consumed over and over again, for example, various vehicles.

The categorization of the products enables the marketers and the enterprises to develop, outline and complete an efficient marketing strategy. The consumer products are divided into three types: durable goods, non-durable goods, and services, according to the endurance and tangibility of the product.

Product differentiation depicts a marketing approach where marketers make an effort in order to create an exclusive product, which will not have equal among the competitors (Ulrich & Ellison1999). Companies decide to take this path in order to stand out in a manufacturing where diversified adversaries create analogous products. On the other hand, there are various approaches that could be used for this purpose, for example, following a low-cost scheme and advertising.

However, these techniques are diverse from product differentiation, despite being valid marketing methods. Product differentiation implies that there are aspects, characteristics or nominal disparities between a given product and the competitive goods.

There are several techniques for a product differentiation: product innovation; packaging; pursuing new market niches, especially in unsophisticated areas; generating more referrals; offering increased service; figuring out the guarantees; partnering with complementary products or service providers; and employing the hid assets (Rankel n.d., para. 4).

The most compelling threat to the company is the fact that the possession rank of PC causes the struggle for retail share to be acuter. Moreover, Apple is enduring the damage caused by the loss of the market shares and dominant status. Furthermore, the development of alternative production establishes a compelling threat to the electronic customer market.

The two main strengths of the company are the philosophy of thinking differently and constant need towards changes, a well-handled and unified syndicate of supplies and arrangement of delivery, a service approach that is oriented on the clients, outstanding “Switcher” drive and the enormous influence of the label. These strengths ensure the current expansion and advancement of Apple in a prosperous way, along with attracting recent consumers from the competition.

The primary weakness of the company is the compatibility of their production, which encloses the software demand of the Apple Inc. by the quantity of hardware demand. Despite the fact that a lot of attempts have been made, the consumers still remain unsatisfied. Other compelling problems include an ongoing decreasing level of financial accomplishment. The company ought to strive for the efficiency and increasing financial outcome (Johnston n.d.).

Apple has been assessed as the most creative organization in the period between 2005 and 2008 due to the advancement of diverse production such as iPhone, iMac, and iPod. The manufacturing of music, video, and movie files assisted Apple in gaining beneficial, and invaluable recognition of the label: for example, in 2007 it has been was identified worldwide as the twenty-fourth most profitable brand.

Apple arranges clienteles as its highest stakeholders in planning commercial social accountability approaches (Kaul & Rao 1995). This stakeholder assembly is collected from separate and organizational purchasers of the production of the company. The key concern of clienteles is to obtain operative and competent production that is judiciously assessed. Apple merchandises have advanced value points (Barrow & Barrow 2012).

Nevertheless, Apple’s quality pricing approach is suitable because it equals the extraordinary excellence and aesthetics of the production. The corporation has environmental packages for reprocessing and accountable obtaining to discourse clients’ requests for commercial sustainability too.

Consequently, Apple’s commercial social accountability determinations gratify the welfares of clienteles as the topmost stakeholders of the industry. Personnel are the second-priority stakeholders in the tactic of the company towards commercial social accountability. This stakeholder assembly is collected from workers at Apple’s amenities.

“Core competencies are specific business abilities used to create a competitive advantage in the business environment. A competitive advantage is the ability to complete business functions, produce customer products or provide more value to consumers better than other companies” (Hawthorne 2014, para. 4).

The core competencies of the company are its ingenious conceptions and electronics founded the on operating system. The most recent line of the company’s production contains iPhones, iPad, and iPod with more innovative features and colors.

The core competencies of Apple are potent and vigorous. “It’s not enough to set high standards. We must work every day to make sure they’re upheld” (Apple Inc 2015, para. 10). It is one of the main mottos of Apple, as development and accountability are central intentions not only about the company but also the suppliers. Furthermore, Supplier Code of Conduct constantly changes in order to keep the bar high and to ensure the documents illustrate the strongest principles of safety, human rights, and environmental liability.

The documents contain near 100 pages of extensive requirements in more than 20 areas, some of which are mentioned above. It could be very confusing to duplicate the production of the company; thus, the Apple Inc. has an obvious advantage over its rivals. It possesses a sealed proprietary scheme that allows no escaping of its competence and its classified techniques.

The main point of the empowering policy is that all employees must be treated with respect and dignity and it is the worker’s moral right to work in an ethical environment. Precisely for this reason, since 2007 6.2 million employees were trained; 2.3 million – namely in 2014 in order to perceive the Code of Conduct and local regulations.

On the contrary, the organization is very dependable in its portfolio production advancement. If any organization deflect its commerce en masse or make an attempt of diversifying too much in the production, the possibilities of losing its core competency appear.

Apple’s policy is quite strong towards the environment; thus, environmental responsibility is one of the most strongly developed directions of the company’s operation. The supplier is obliged to advance, enforce and sustain business practices that are environmentally responsible.

Another strategy for Apple, Inc. could be an act of co-branding. Co-branding is a series of action, which lead to a combination of assorted products into a collective good or displayed collectively in a concerted manner. There are a lot of diverse branches of co-branding and the means of its reaching. The organization has an opportunity to operate jointly with other organizations in order to integrate their supplies and have an impact on the core competencies of one another.

On the other hand, the company is able to manipulate the resources they already have currently inside one organization in order to advertise and stimulate numerous products instantly. The methods of co-branding are “ingredient co-branding, same-company co-branding, national to local co-branding, joint venture co-branding, and multiple sponsor co-branding” (McKee 2009, para. 2).

Regardless of the method that an organization decides to maintain, the target of co-branding is to act in answer to the shifting marketplace, establish the core competencies of the organization, and operate in order to enhance the profits from the given product.

The company would like to know that suppliers, whether all over the world or within home country, are exploiting processes of manufacturing that are ecologically friendly and reliable. Therefore, Apple is providing help in order to make the companies of suppliers more resource profitable; moreover, focused programs that preserve resources of the planet are enforced.

Apple is commercially a very substantial organization. As a result, it is attainable for the company to donate a big amount of monetary expenses to its exceedingly skillful members of the staff in research and advancement section of the organization in order to advance such devices that are extremely high-tech. These devices should be ingenious in its origin, agile in its presentation, possess the ability to store a big amount of information and have the fast processing velocity.

Within the frames of the Clean Water Program, in which Apple takes an active part, several improvements happened. Firstly, the Program was extended in order to comprise nearly 50 percent of overall water disengagement for the 200 most loyal suppliers. Secondly, Apple provided help for thirteen companies in saving fresh water in the overall amount of half billion gallons, to be precise. Furthermore, Apple resolved violation issues in more than 50 sites and deteriorated them in the IPE collection of data.

Apple’s general plan of comprehensive diversity provides the opportunity for the corporation to be prominent. The difference in purpose and design assists the company’s objective of being in the front of the market by the means of the ground-breaking production. The invention is at the core of the business of the company.

On the other hand, in order to advance its solicitation of this general approach, the corporation has to enter markets in a hostile way, particularly in the developing nations where Apple’s market extent remains restrained up to this day.

Apple’s chief demanding growth policy is production expansion. Market infiltration and market expansion come second and third in precedence, correspondingly. These demanding growth strategies come to an agreement and assist Apple’s general plan. The organization is robust in produce expansion by the means of the invention.

Nonetheless, in order to make its enactment better, the organization has to put more emphasis on market infiltration and market progress. The prominence of these two concentrated growth plans is able to advance Apple’s pliability against violent contestants, such as Samsung.

In conclusion, it could be said the objectives of the essay have been achieved.

This essay provided help in obtaining a good understanding of the environmental factors affecting the organization and their inter-relationship to formulate a sound competitive strategy, which was imperative for the success of an organization.

The analysis of the strategic direction of Apple, Inc. clearly addressed the issues that are facing the organization and analyzed the situation by the means of applying the concepts and tools taught in the leading to the formulation of specific strategic direction and plans of action for the Apple, Inc.

The essay provided a brief background of organization and industry in which it operates and competes, as well as undertook a situational analysis in order to evaluate the vision, mission and current strategy of the organization and how it influences its overall success.

Furthermore, the research provided the organization’s external, internal and competitive environment using the relevant tools learned in the module such as PESTLE (political, economic, social, technological, legal, and environmental) analysis, SWOT (strengths, weaknesses, opportunities, and threats), TOWS analysis, and Porter’s 5 Forces.

The past strategic choices were assessed and critiqued, and generic strategies and growth strategies for the future direction of the organization were proposed by taking into account any expected changes in the environment and/or its competition. The business strategy has been recommended and the necessary questions regarding the external and internal environments of the Apple Inc. were observed.

Reference List

Adeoty, J. 2000, Product classification strategy, University of Ilorin, Ilorin.

Apple Inc 2015, Apple supplier code of conduct. Web.

Barrow, C. & Barrow, P. 2012, The business plan workbook, Kogan Page Publishers, London.

Cohen, M., Eliashberg, J. & Ho, T. 1996, ‘New product development: The performance and time-to-market tradeoff’, Management Science, vol. 42, no. 1, pp. 173–186.

Foster, R., Linden, L., Whiteley, R. & Kantrow, .A 1985, ‘Improving the return on R&D’, Information Resource Management, vol. 28, no. 1, pp. 12–17.

Griffin, A. 1997, ‘The effect of project and process characteristics on product development cycle time’, Journal of Marketing Research, vol. 34, no. 1, pp. 24–35.

Hawthorne, M. 2014, List of core competencies to run a business. Web.

Jinjin, T. 2013, ‘A strategic analysis of Apple computer Inc. & recommendations for the future direction’, Management Science and Engineering, vol. 7, no. 2, pp. 94-103.

Johnston, K., The best way a company can build & manage its product mix & product lines. Web.

Kaul, A. & Rao, V. 1995, ‘Research for product positioning and design decisions: An integrative review’, International Journal of Research in Marketing, vol. 12, no. 3, pp. 293–320.

McKee, S., 2009, The pros and cons of co-branding. Web.

Rankel, S., 8 ways to differentiate your product offering in price-driven and commodity markets. Web.

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Managing Business Strategy of Apple, Inc.

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