Strategic Management of Apple - Essay Example

Strategic Management Questions Word Count 513 (6 pages) Question 4 Assume you are a consultant who has to develop an implementation plan for a stand alone business or a SBU in your country or region. Assume also that the business or SBU has appointed a new CEO who has just devised a new strategy. Develop an implementation plan for the business that emphasizes an understanding of the application of the eight components of strategy execution. Describe the business or SBU and its new strategy in enough detail for the marker to assess the appropriateness of your plan. The business or SBU and its strategy can be real or composites of situations that you have heard about, read about or experienced. _______________________________________________________________________ The company that is going to be discussed is Apple—most notably because Apple just did appoint a new CEO. Steve Jobs is now no longer the CEO. Instead that post will be taken over by Tim Cook, who was second-in-command. This is the implementation plan for Apple that emphasizes each of the eight components of strategy execution, which will be described in depth herein. Apple’s strategic business unit (SBU) could probably be best defined by its various technologies (the MacBook, iPod, and iPhone)—so we will focus on those elements for right now in terms of what will work as a strategy versus what won’t. Every manager has an active role. Every manager at Apple will continue to have the most of the same levels of responsibility that he or she was managing before the change of the CEO. Some responsibilities, however, may shift in terms of what is expected of each manager. Some managers at the Apple Genius Bars, for example, may have to relinquish control to higher-ups, and also do some work of the incoming recruits—thus having to be more adaptable to any new company policy. There is no proven “formula” for implementing particular types of strategies. Apple does not claim to have any corner on the market when it comes to product development, per se; rather, Apple has an ingenuity that defies definition. To say that there is no proven formula for success is partially untrue. There are certain guidelines which help make sure that a product line will have success, and that is what will be discussed more in-depth in the next section. There are guidelines, but no absolute “must do it this way” rules. Of course, there are definitely guidelines within the Apple corporation about how to implement new business strategies. Apple culture dictates that, although there are set guidelines, but no one need be so strictly adherent about the policies that it overrides creativity within the corporation. There are usually several ways to proceed that are capable of working. Part of Apple’s corporate culture is to unite, not divide. Strategies that can be implemented which focus on everyone’s ability to succeed are much more likely to prevail than strategies which exclude or alienate people. The process cuts across many aspects of “how to manage.” The implementation of the strategy includes the fact that there is no one right or “perfect” way to manage employees. This corporation stresses a “bottom-up” approach instead of a “top-down” approach, meaning that inspiration can come from the most unlikely of places, even from employees who are not as high up in the company. Each implementation situation occurs in a different context, affected by differing: business practices and competitive situations; work environments and cultures; policies; compensation incentives; and mix of personalities and firm histories. Implementation of the strategy can be affected by the current practices which are standard operating procedure at Apple; certainly, competitiveness may be a factor. Work environments and the culture of Apple should strive for excellence all around. Apple policies should not violate anyone’s rights or infringe upon anyone’s inherent rights, either. Compensation incentives should be properly aligned with the work completed. Personalities may come into play, but no one should be a prima donna. The histories of the individual Apple Stores should be taken into consideration when the personality of a particular venue is being restructured. The approach to implementation/execution has to be customized to fit the situation. Of course, no one wants to put a strategy in place that is going to hamper work productivity or negatively impact Apple employees. Therefore, any strategy which is to be implemented should be thoroughly retrofitted to suit the needs of each individual store that is selling various SBU’s from the Apple Corporation. People implement strategies - not companies! This is why it is most important to make sure that the employees being hired support Apple and its goals and mission as an incorporated company. Apple employees understand that, in order to implement any successful business operation, Apple must first become a leader in its field of technology—which it could already be argued that it has. Since people are the core heart and soul of the company, it is the quality of the people hired which concern Apple the most—because Apple only wants to hire the best and the brightest who will lead the strategy into becoming successfully implemented in order to be a lead competitor in the 21st century. Question 6 Select a corporation in your country or region which has at least two of its SBUs in nonmanufacturing industries. Describe the corporation and its two SBUs in sufficient detail for the marker to assess the appropriateness of your answers to these questions about the corporation. The example corporation and its SBUs could be real ones or composites of situations that you have heard about, read about or experienced. Of course, you should refer to the two SBUs throughout your answers to the following questions. a) Using some of the cells in the nine-cell GE matrix, design the corporation’s strategy for each of the two SBUs. Why did you select the corporation’s strategy for the SBUs that you did? You should show you are aware of GE’s weighted average method of calculating the scores, even if you do not actually calculate the figures for the method (however, advanced students will present some of these calculations). Business Unit Strength of XYZ Hospital Corporation’s Patient Care Market Attractiveness High Medium Low High Individualized care Personable staff Low census Medium High-end materials Great customer service High cost of care at the facility Low Lack of charitable donations High fixed overhead costs Bloated company budget Business Unit Strength of ABC Private School Corporation’s Lessons Taught Market Attractiveness High Medium Low High High-quality instruction Well-educated teaching staff Cordial staff Medium Individualized instruction Short time frame for classes Coordination of class scheduling Low Limited school budget Small room sizes Old school building a) Using some of the cells in the nine-cell GE matrix, design the corporation’s strategy for each of the two SBUs. Why did you select the corporation’s strategy for the SBUs that you did? The strategy for the XYZ Hospital Corporation mainly focuses on the element of the people in the corporation which make the corporation a great place to work, an environment with friendly and personable people on-staff. Unfortunately, one of the problems that the hospital has, among other things—is that its budget is not balanced. Another problem—besides soaring costs for care—is that the overhead for hospital costs is increasingly becoming a problem. These are fixed costs which cannot be changed. In addition, there are not many charitable donations being made to the hospital, which happens to have a religious affiliation. Otherwise, all elements about the hospital itself are in good working order. The difficulty now is that the hospital has a low census, and, in order for the hospital to turn a profit, it must have a higher census or occupation rate. The corporation’s strategy for its standard business unit (the care given at the facility) is a nonmanufactured product—something intangible that cannot be measured. This strategy was chosen because, so often, there are situations where one needs some kind of way to assess the level of assistance being given to the customer—in this case the patient. The strategy for the ABC Private School corporation mainly focuses on the SBU of the lessons taught, which is another nonmanufacturing industry, similar to patient care. Now, the focus is not the patient, but the student. The corporation’s strategy, in this case, is to teach all of the required subjects in school to students who might otherwise not have had learning experiences outside (or inside) the classroom to be able to learn such subjects. Whereas the hospital corporation’s strategy was to provide patient care, the ABC corporation’s goal is to provide authentic learning experiences which students can then use in real-world settings. This strategy was chosen because it was another intangible way of providing a service to a service user. In some ways, these two corporations may have some things in common, which will be discussed at some length in the next section. b) In what ways could the existence of the two SBUs in the corporation in part a) be considered to be related or unrelated diversification? Why? Which type of diversification is usually the better one? Why? (55) Diversification as it relates to the patient care and teaching could be similar in the way that these entities (XYZ and ABC) are both creating environments or atmospheres—they are not really manufacturing any sort of products. These could, therefore, be considered related forms of diversification because the services being rendered stem from market penetration to development, to market development, to, ultimately, diversification. Now, within the development of these corporations, there is a slight unfolding of what will happen in the future, it is just that this is a different sort of development from manufacturing industries. In nonmanufacturing industries, the development is not consisting of product development but of cultivating the success of an individual. At the hospital, the employees are cultivating the health of the patients. At the school, the employees are cultivating the learning of the students. Therefore, these are services provided, not products that are produced—although, of course, the patients show evidentiary products of their health as students, similarly, provide products of their learning. The type of diversification that is the better one is difficult to ascertain. On one hand, the marketing strategy of the hospital is to make sick people well. On the other hand, the marketing strategy of the school is to teach people how to perform and/or excel at a certain subject. One would definitely have to make a value judgment if one was to declare promoting health as more important than promoting education. However, if one absolutely had to choose, health would probably be the more important effect trying to be achieved. That is subsequently why health care costs so much. Although someone can learn something at any time in his or her life, health care is an immediate need which must be taken care of rapidly—otherwise, one’s health could decline in some cases if not seen by a medical professional. Thus, the marketing appeal of the XYZ corporation will probably have more pull than the ABC school (both of which, one might add, are indeed real corporations, but whose names have been anonymized to protect the innocent). Although it is difficult to choose which type of diversification is “better,” definitely, if one had to choose between having one’s health and having taken private Japanese lessons for a year—it is most likely that someone would choose to be healthy instead. So, the marketing strategy for the hospital seems most feasible because it is imperative to have health, while private schooling is not necessarily always mandatory. Read More