Managing and Operation Performance of Apple Inc - Essay Example

? Managing Performance in Operations - Apple Inc. COMPANY PROFILE: Originating in 1997, Apple incorporation has become a world leader in the manufacturing and design of mobile communication and media devices, Music players, personal Computers etc. The company is also engaged in the manufacturing of software, Networking solutions, and peripherals etc. The product portfolio of the company includes IPhone, I Pod, I pad, apple TV and software like Mac Os x operating system and iOS. The company also has a strong hold in the E-Business category. It sells a large amount of its product line through its online retail stores. The company also tries to cater to a large chunk of education market by offering education gadgets to the students both online and through retail (Apple computer, 2005). The operations of the company are spread throughout America, Europe, Japan, and Asia-Pacific as well as the Middle East and some parts of Africa. The company policy lays a lot of stress on its value chain and every operational activity done by the company is in compliance with the code of Operations (Finkle & Mallin, 2010) ORGANIZATIONAL STRATEGY AT APPLE: The company has grown from a starting point to become the best company of the world. The stock performance of the company gives a very clear idea about the strategies used by the company. On the very basics, the company is committed to improve customers’ lifestyle by developing the best PC gadgets, Music players and other cellular communication devices. The target market of the company is the students, businessmen, educators, and even governmental agencies for the industrial products. In such a case, the company emphasizes on a business strategy that focuses on the ability to design and develop in-house operating systems, application software, hardware and other tangible and intangible products. Seamless integration of the applications and innovative designs are a critical part of Apple’s manufacturing policy. The company lays a strong emphasis on continual improvement and innovation in its product line and other business strategies. Research and Development form the focus of the executives of the company who work on the ideology that that in order to survive and foster, people should think differently and create imaginations. As a result the company keeps on revitalizing its gadgets and digital consumer electronics (O’ Grady, 2009). The company also integrates various third party applications in its product mix. Many accessories of for Mac computers, ipods, and iphones are injected into the market by third-party ventures. Another business strategy employed by the company is the expansion of the distribution network and expands the customer base by focusing on customer satisfaction. These strategies have enabled the company to introduce new products in the market and gain a competitive edge over its competitors (Blackwell, 1987). When in 1999, the company introduced the ibook, its product matrix got complete. The company could now offer a desktop as well as a portable computer with a highly capable operating system. At several instances, the company has acquired several small SME’s that have been playing in its market. This strategy has enabled the company to gain a competitive edge in the market and maintain and foster its presence. PRODUCT DIFFERENTIATION: One of the main reasons for the standout performance of the company in the global market is the product differentiation strategy in company’s operations. The company staff is very conscious to reduce the similarities among not only the competitor products but also the product line of the company itself. The company has built a reputation by making the state of the art technologies that are user friendly and extremely solution bound. In the industry where the company is operating, the importance of product differentiation acts like a barrier for new entrants. This tool is fully utilized by the company as a part of its corporate strategy. Differentiated product line introduced by the company creates a huge impact on the consumer market and it has enabled the company to launch its various products successfully (Beahm, 2010). STRATEGIC ALLIANCES: Throughout its corporate life, the company has been engaged in several strategic alliances including mergers and acquisitions and joint ventures. In its early days, owing to the strong performance of the company Apple got partnered with IBM and Motorola on the case of Power PC chip. Later in 1996 apple announced to purchase NeXT software for $427 million. The company derives a lot of economic value through its strategic alliances. In order to make sure that the hardware of the company got sold, the company made the best software applications which could only run on the hardware produced by the company. In this way the brand loyalty of customers was also tested. To further its Digital Life Style strategy the company also entered into contract with the top five music companies of the world. DIGITAL LIFE STYLE STRATEGY: Members of the company know that the major products that they are dealing with are mainly digital in nature. Be it I pod, Mac OS or any other product of the company’s product line. Hence the company executives came up with a big umbrella of campaigns that promoted customer awareness about the importance of digital products in life. The company had an aim of establishing a culture where technological gadgets became an integral part of everyday affairs. In 2001 apple launched the iTunes. For this strategy the company also opened its own stores. This was followed by the introduction of the iPod. The managers thought that the iPod will change the way people enjoy music. The company introduced notebooks and LCDs in 2003 followed by the iLife package (Apple Inc, 2010). OPERTATIONS STRATEGY OF APPLE: The visionary objectives set out by the executives of the company in the Mission statement of the company are replicated into the operations strategies of the company departments. These goals are not specific to the operations in only US of Europe. The company management tries to align the objectives and workforce outlines in all countries to those of the parent company. The high emphasis on quality and continuous improvement are not only the characteristics of Us Apple operations. All products produced in different regions of the world are verified before they are marketed. This also goes for the marketing and other consumer level strategies. In pursuance to its emphasis on the product diversification, the company goes an extra mile. Just like it did in case installing a green light In its gadgets. When Apple’s design Guru JOny Ive decided to have a small dot of green light above the screen of the gadget when the camera was on, the concerned personnel came up with new and innovative ideas to make the idea into a reality. Although it is impossible for the light to pass through metal the manufacturing team found a way to make this happen. The idea was to poke holes into the metal sheet small enough to get unrecognized by the naked eye. Subsequently, lasers were arranged for the task to be done. Although most of the customers of Apple don’t really notice such minute changes in the designs of these gadgets, the company staff still keep these kinds of factors in regard while thinking very product differentiation (Baehm, 2011). The cost saving strategies employed by the company is also an important part of the operations management. The close communication between the supply chains of the company has enabled the company to get savings in the production process. Also because of the volume and the size of orders made by Apple, the members of the supply chain deliver the true value to the supply chain. This is one reason why the company has been able to offer considerably lower prices despite of investing so much on the research and development projects. The company still gains a considerable margin of 25% on it products just because of lower production costs. According to Mike Fawkes, Supply chain chief at Hp, “They’ve taken operational excellence to a level never seen before.” All the strategies employed by the company are part of a well thought plan that aims at delivering strong products to create an apple culture. This in turn leads to a fanatical brand loyalty that is personified by the customers of Apple. The company has invested in purchasing its own stores through its target markets. The company was facing problems with bi-box sales staffers who were unaware of the product offerings of the company and were therefore unable to boost up sales of the company. By setting up outlets, only delegated to the sales of Apple supplies, the company has been able to attract customer loyalty as a result of proximity to customer base. With such a policy, the company has been able to improve its market strategies and the subsequent marketing mix decisions (Hoog & Strzempa, 2011). The company has also been focusing on producing the complementary solutions so that the products become compatible with one another. This enables the company to achieve control over the entire user process and customer needs. Hence the company has been able to achieve customer loyalty. Thus, with the wide range of services that the company provides to the end consumer, the customers are more attracted towards apple for the satisfaction of their needs. Apple keeps focus on the state of the art marketing strategies. By targeting on the customer base of young people, the company makes its promotion schemes very successful and famous. Apple products are a burning question on the blog sites and the social websites are also hammered with Apple promotions. The excitement created by these promotion schemes keep the customers in constant search of Apple’s products. Apple also greatly focuses on teenagers. By taking its promotion schemes to schools and universities, the company turns these institutions into showrooms. Perhaps the most important operational strategy carried out by Apple is its over emphasis on the quality of the product. As one of the customer told me “It is not that the brand name is all. I would personally buy apple because its quality is way better than that of other gadgets.” Extensive research and creativity lead to the high quality products at Apple. The company has never compromised on these two areas and keeps quality issues at every stage of production. Another important thing to note over here is that all the products of the company are interrelated and follow a similar pattern and design. This consistency in the product line helps in market penetration and keeps the customer accustomed to a typical Apple Product. PERFORMANCE OBJECTIVES OF OPERATIONS The company is very particular about the fulfillment of short term as well long term goals. The company also employs strict measures to critically and repeatedly evaluate the performances of the individual employees, the teams and the company. When I being a member of administration was teamed with the line departments such as marketing, product development, software department and finance, I was unable to comprehend the idea of getting members of both line and staff departments for formulating the marketing strategies of iTune packages for IPods. But the main idea behind this step was to keep the intake of each department of the company in each and every decision made by the company be it technical or administrative in nature. In this way all the departments were forced toward in a singular direction. In order to evaluate our performance, our tasks were codified on weekly basis and our performance was measured through adequate matrices. Also were forced to make statement of contribution for each week to evaluate the input of each member in the task. This gives us an idea about the performance objectives of the company (Herbeniak, 2005). At Apple every decision made by even the functional level employees is considered to have a direct impact on the operations of the company. That is why the company inculcates our progress on operations as a measure of performance. The employees are made to think that the only way they can achieve performance based goals is by contributing to the overall strategic outlook of the company. Even administration department hosts educational programs for the employees so that they know the importance of their tasks to the company profitability and sustenance. THE ALLIGNMENT OF THE THREE: Up till now, we have individually recognized the corporate strategy and operational strategy of the company and the performance of the objectives of operations, but we are already aware that all these measures taken by the company are in close relation to each other. The strategic decisions for a particular product let say iPad will lead to the formulation of a similar kind of operational strategy. Before the iPad was launched into the market, my team and the production department constantly held meetings for 1 year. We discussed the design, formulation, campaign, and other attributes of the brand launch. These meetings were recorded and reviewed at several instances to keep in close contact with the company strategy and the subsequent brand strategy. It is the result of this constant evaluation that iPad has been a success in the market because we keep a clear check on the brands performance (Imbimbo, 2009). SPEED, DEPENDABILITY, QUALITY, FLEXIBILITY, COST, AND INNOVATION Throughout its operational process, the company keeps a close check on speed, dependability and quality and innovation. As we have already discussed, the company considers the aspect of Innovation in each product variant. It is the innovation that keeps the company on a distinct position in the market. More than being a player in the market, the company is an initiator. We can easily identify that in cases like iPad, iPod, Mac OS x. Hence innovation is integral to the processes of the company. The company invested $ 8 billion in its supply chain in a year to keep up with the quality issues on its products. The company has a high regard for the cost related aspects of the products. Through its eco friendly supply chain, the company has linked together several players in its value chain. The strong relationship between the players of the supply chain has led to the company producing goods at relatively cost effective rate. This is further transformed into the prices of these products. However, it is worth mentioning that the company has, at several instances, shown disregard to prices as compared to its competitors. This is something that needs to be looked upon (Daft & Marcic, 2005). The operational staff also keeps focus on the flexibility of operations. Employees are given the tasks and the deadlines. Apart from this, the company manager does not interfere in the work scope of the people. These people work on the required projects at their disposal and come up with the right plan of action and the right mix. When we were forced to think about product designs, the supervisors spent a lot of time and money on people who were given the task of thinking about product designs. Thus the executives prefer flexible working conditions in the company as long as the deadlines are met (Gillam, 2008). All line and task authorities of the company are dependent on one another as the tasks of each of these entities are interdependent. Thus there is preference for a culture of dependability and quality, The speed of operations are of immense significance for the higher staff. The deadlines made are short but manageable and since the company is operating in such volatile market, the speed of operations become were significant (Hrebiniak, 2005). For example: supervisors and their engineers spend months out of their residences to keep a close watch on the consumer preferences. Their insights are then integrated into the mass production processes. The company staff also works with suppliers to produce new tooling equipment. OPERATIONAL PROBLEMS AT APPLE AND RECOMMENDATIONS As we have already discussed, Apple has a high regard for product differentiation but this leads to certain dilemmas in the production process. These are illustrated below along with the proposed solutions. Information sharing in the organization is very low. The company executives are reluctant to share the vision of the company and the subsequent information with the employees of the company. This culture is very strong and has proved disadvantageous to the company as employees have made inadequate decisions at various instances. The office environment gives a claustrophobic look to the employees who are quite upset about the lack of communication between the office entities. The company executives should avoid the practice of explicitly announcing about these control measures but should share information through documented facts. The company staff fails on innovation part in the sense that it does not provide the right kind of environment for innovative learning. The concept of innovation is overly emphasized and this makes people to think more divergently than ever. This at times proves to be unfruitful for the company as a lot of time is wasted on R&D in that matter. IN order to resolve this problem, the company leadership should take a bold step forward and introduce the six hats thinking concept in the company so that all people can think differently yet specifically (Apple Inc, 2001). THE NEED FOR IMPROVEMENT: Till now it is quite clear that in the market where the company is operating, the company has to focus on continuous on improvement in its operations. As far as the product line is concerned, Apple has done a good job in The Kaizen concept. But the company still needs to capitalize on this concept in the field of inter-department communication and manufacturing process. At a stage where the company is standing, the need for business process reengineering is not even there. The company is the best blue-eyed company in the stock market and its operations are quite efficient. This means that the there is only a need of Improvement and maintenance. CONCLUSION The company, Apple Incorporation is perhaps the best performing public limited company in the US. The success it has enjoyed in the field is only because of its overemphasis on managing performance in operations. The company has employed astringent yet very productive measures to constantly evaluate the performance of the operational, tactical and strategic level decisions. The company has a high regard for speed, dependability, reliability and quality in its operations and therefore all the strategic and operational level efforts are aligned for the company. The sole reason for the success of the organizations is its emphasis on managing performance in operations. 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