Using Technology to Create Strategic Options - Essay Example

? USING TECHNOLOGY TO CREATE STRATEGIC OPTIONS USING TECHNOLOGY TO CREATE STRATEGIC OPTIONS Introduction As much as companies would prefer that in their day by day operations, they commanded a more monopolistic environment where there was virtually no competition from anyone, it would also be noted that the presence of competition brings activity and active strategizing that has the potential of leading to improved service delivery and growth (Hannah and Peter, 2013). The fiercer a company finds itself in competition therefore, the more active the company becomes in its competitive market. Once there is such competition, the availability of strategic options become very important in ensuring that there is guaranteed competitive advantage. This is because out of the numerous strategic options, the companies become equipped with the selection of the most preferred and suitable choices that best respond to the dictates of the market in which they find themselves. In today’s competitive market, specifically for the computer hardware industry, the need and use of technology in the creation of strategic options has become necessary and relevant than ever before. This is because the computer hardware industry is by nature a technology based industry that has so much responsiveness in the demand side of the technology market. This paper shall therefore explore how Apple Inc. as a player in the computer hardware and software industry has used technology to alter the competitive dynamics of its market space. Resources needed to compete Sampler (2013) identifies three major dimensions of IT progress, out of which is the reach dimension. As far as reach is concerned, three other dimensions can be found, which are user experience, connectivity and commerce. In a holistic approach therefore, for the dimension of reach to be satisfied, it would be noted that it is important to have the presence of a well resourced human resource base that mans the reaching range of the company (Oshima and Ann, 2006). At Apple Inc. the company identifies human resource as one of the most important resources that are needed to compete in the current competitive market. Through the execution of roles and tasks handed to the human resource of the company, the company survives the competition it is presented with because it gets people who can rightly produce or create computer hardware and software that matches the experiences of users, connect users to the company, and trade out products to consumers. It is important to mention that assessing a company’s competitiveness on the technology market from a demand side should give much attention to user specification. It is for this reason that in the selection of its human resource base, Apple Inc. ensures that it is only the best employees who can predict and forecast the market from a user-based perspective and create technology based hardware and software that meet the demands of users. Another important resource that Apple Inc. has for years used in gaining competitiveness and remains important in competing is financial resources. The computer hardware and software industry has been described as one of the most capital intensive industries in the world. This is because of the fast changing nature of the industry, where on a rapid basis, the trend of user demands change. As these demand changes happen, companies in the industry have been obliged to also change their marketing mix and manufacturing strategies to ensuring that they become the preferred destination for consumers seeking change (Hannah and Peter, 2013). In such a situation, competition becomes almost impossible in the absence of sufficient funds to compete. For Apple Inc. there remains the need for rapid capital injection so as to compete because most of its competitors continue to become financially viable and strong on the competitive market. In the creation of strategic options for its financial needs, it is strongly recommended that the company undertakes key financial marketing approaches that guarantee short term to medium term capital turnovers such as mergers and diversifications. This way, the capital pool of the company, which currently stands at US$ 48.999 billion of operating income will be assured to increase so that the company will become more competitive to engage in marketing mix such as promotions and price reduction, so as to create competitive advantage (Edney, 2006). Reaction of competitors Judging from a demand side of the technology market, the competitors of Apple Inc. including Microsoft, Dell, Toshiba, and Samsung have all reacted to Apple Inc. and the demand of the market through the use of user-centered strategic options. Such user-centered strategic options are based on the identification of user specification needs of consumers. Then having identified the specifications that users require in their day to day computer hardware and software usage, create and manufacture computer hardware and software that meets these needs (Oshima and Ann, 2006). At the very early stages of the computer hardware and software industry, it was found that the user did not have much say in what manufacturers such as Apple presented them with. This was because the approach to being competitive was for appealing brands and models of computer hardware and software to be made so that users would fall in love with these brands and make purchases (Edney, 2006). In the said era, companies had the freedom to practice their innovativeness, but the situation is totally different now. Today, users have become more inclined to what is suitable for them and what meet their needs. Competitors of Apple Inc. have also reacted by ensuring that there is constant research and development that is based on the identification of user specifications and trend of needs and directing their manufacturing towards these needs. Another way in which most competitors have responded to the increasing need for there to be sufficient capital injection in their operations has been to engage in mergers and diversifications. As part of approaches for developing strategic options, Hannah and Peter (2013) have touched on the need for there to be options that respond to threats and opportunities found within the market. Meanwhile, capital independence has been found to be a variable that could manifest itself as both a threat and an opportunity. As an opportunity, sufficient capital independence ensures that companies have the luxury of engaging in proactive expansion and growth strategies. Capital independence could also be a threat if there is scarcity of funding for the company. On the part of competitors, realizing the rapid rate at which Apple Inc. is expanding in its capital independence with 2013’s revenue standing at US$ 170.910 billion, most of them have reacted by going into mergers with other technology based industries that are not necessarily in the computer hardware sector of the industry (Norton, 2003). Apart mergers, others have also looked into the use of diversifications, which ensures that there are other competitive market areas from which they gain revenues to run their core or parent industry, which is the computer hardware industry. Customer benefits Today, there is no denying the fact that technology is the fulcrum around which global trade, education and communication revolves. As a matter of fact, technology has become so centralized in the day to day running of businesses and communication purposes that one is virtually incapacitated without a very formidable basis for computer hardware and software (Koene et al., 2002). In light of this, customers have Apple Inc. have benefited greatly from the company when it comes to the provisions of computer hardware and software that meet the needs of modern business engagements and involvement. As business operations at the personalized and company levels become so much dependent on computer hardware and software, with much basis for electronic commerce, various customers have depended on the company for the creation and manufacturing of customized computer hardware and software that solves any peculiar needs of trade that they are faced with. Noting that electronic commerce carries so much weight when it comes to the kind of financial expansion it gives to companies, it can be said that Apple Inc. has indeed contributed to the successful business growth of its customers through e-commerce empowerment and enablement. Another aspect of benefit that customers get from the company is in the area of communication, whereby with the use of the most advanced and modernized forms of communication tools such as tablet computers, laptops, smart phones, among others, people stay connected and get in touch, no matter the part of the world in which they find themselves. It is therefore true to say that Apple Inc. has played its role effectiveness in bridging the gap that existed among people, and enhanced rapid development of globalization, of which its customers use the company’s platform to champion. Indeed for most customers of the company, dissemination of information and transfer of data where necessary, is not likely to be a problem as the company has specialized innovations and inventions that support an on-the-go access to information and data processing. As an educational tool also, it is true to argue that users of various products from Apple Inc. have benefited immensely when it comes to the creation of a platform for advanced research to be undertaken. Associating the use of the letter ‘i’ added to most of its products like iPod, iPad, and iPhone to ‘internet’, it would be noted that most of the products of the company are geared towards easy internet access and connectivity. Meanwhile, the success of any meaningful educational research in today’s world is very much dependent on how well a person can use the internet (Koene et al., 2002). Firm benefits The use of technology platform in the creation of strategic options has come with several benefits for Apple Inc. as a company. Ranked as one of the world’s richest companies according to Forbes Magazine (Koene et al., 2002), it is not a debatable argument that running on the platform of technology in its strategic options, whereby the company takes advantage of technological advancement in engaging in all its marketing mix has aided in making the company a very financially successful outfit. As of 2013, the net income of the company was estimated to be US$ 37.037 billion, with total asset of US$ 207.000 billion (Milian, 2013). Noting that the commonest means by which Apple Inc. makes revenue earnings is through the sale of computer hardware and software, Oshima and Ann (2006) has noted that the use of the internet in engaging in online trading alone accounts for as much as 55% of all sales that the company makes worldwide. Still on the use of technology in the creation of strategic options, Elmer-DeWitt (2009) has also stated that the company has benefited immensely from the use of technological platform in engaging in all 4 dimensions of the marketing mix namely product, price, place, and promotion. For example through technology enhanced medium like social network, the company is able to have a very large reach of audience for the promotion of its products and services. Meanwhile, the use of technology mounted avenues like social media has been found to be one of the cheapest avenues by which any form of active promotion. In terms of place and price also, there are a number of benefits that Apple Inc. has derived by way of creating strategic options based on the use of technology. In terms of place, apart from the 406 retail stores that Apple Inc. had as of May 2013, the company can actually boast of having a worldwide limitless and borderless array of stores that is transformed through its online store (Milian, 2013). Through electronic commerce, by which Apple Inc. operates an online store, the computer of almost everyone, which is connected to the internet becomes a retail store for them. The advantage with this is that, people do not have to be worried about opening and closing times of stores. At every point in time, they can make purchases of the company’s products via the wide world web. Companied to a scenario where there would have been a total absence of a technology based platform, it would be expected that most of the purchases, which has been identified to be 55% to be coming through online sales would not have been part of the company’s revenue. Because of the use of technology in most aspects of the production chain such as manufacturing and distribution, the company also benefits immensely from reduced cost of production. This makes it possible for the company to transfer its reduced cost to its unit products, making it possible for as many customers to patronize its products as possible. New Organizational Structures As part of the need to creating all its strategic options based on technology, Apple Inc. recently undertook key organizational structural changes that were aimed at improving the competitiveness of the company in its space. The first of these changes was based on a rapid restructuring expansion program that was aimed at targeting emerging information technology (IT) markets that had been less explored by its competitors (Norton, 2003). By emerging IT markets, reference is made to most countries within the Sub-Saharan African and Far East countries, where industrialization has started taking a more technology based approach as compared to the more rigorous manual system of industrialization that existed (Elmer-DeWitt, 2009). The rationale for targeting these markets was because it was found that the emerging nature of technology in these markets made them have a more aggressive attitude towards catching up with trendy and innovative computer hardware and software. In the traditional markets of the company, most of their consumers were very much used to such products and so did not welcome them with the kind of aggressive demand that prevailed in the IT emerging markets. This form of market targeting was also very necessary because competition in these markets were not as fierce as existed in traditional markets. This was indeed a major external organizational restructuring program that was based on the need to transit technology to all people, far and new. Significantly, this restructuring agenda also brought about some key internal organizational changes. For instance there was the need for there to be the transfer of human capital across the new markets that were established. The transfer was done in such a way that some of the best human resource of the company was given the new task of managing technological innovation in the new markets (Edney, 2006). Subsequently, the need for the vacancies created to be filled was necessitated, which followed another round of large scale recruitment and placement exercise. As part of the large scale recruitment and placement exercise, the organizational hierarchy of the company experienced some changes. Generally, new departmental managerial positions were created to ensure that those employees who remained at post acted as trainers and mentors to those who came in newly. In his assessment of this new organizational structure that was created to bring on board more executive positions, Elmer-DeWitt (2009) deduced that a massive level of employee engagement, leading to employee satisfaction, as a result of the intrinsic motivation that employees received to be part of decision making within the company. Formulating an effective digital strategy The talk of strategic options always brings to light the availability of a number of choices from which a company makes a desirable selection to use as a strategy. With this in mind and the need to take advantage of technology in mind, Apple Inc. has been concerned with ways of formulating effective digital strategy, based on which four key processes or approaches have been followed. The diagram below simplifies the approaches to formulating effective digital strategy by Apple Inc. From the diagram, it will be realized that the very first approach that the company takes to formulating an effective digital strategy is by assessing opportunities. This is done by picturing all possible and probable future outcomes of actions that the company takes (Milian, 2013). It also involves a thorough research and development (R&D) that is focused on knowing all potentials that lies in the larger market by way of opportunities for the company. Having assessed such opportunities found, the company then proceeds to acquire options through investments into the most profitable and promising options that are selected. Thereafter, there is the nurturing of options, which is based more on the need to introducing the acquired options to the larger organization so that each member of the organization can play his or her role in the re-assessment of the options and the utilization of the options for the reason of creating value. Finally, the company engages in the harnessing of value by making the eventual outcomes of selected strategic options part of the everyday processes and routines of the company. Indeed, noting how stressful the process above can be, Apple Inc. rightly makes very good use of technology by ensuring that there is regulated system that constantly cycles the process so that the process becomes part of the everyday running of the company. Accessing the impact of the digital strategy of Apple Inc, Norton (2003) stressed that it is the reason the company has not feared any competition from other industry players. Conclusion Generally, the essay has been very useful in outlining various ways in which Apple Inc. has created value for itself in the past decade, and ways in which the company continues to create value in the midst of fierce competition. This was done by giving particular emphasis to the role of technology in the creation of strategic options. To conclude the paper, it can be said that as a company in the hardware and software industry, Apple Inc. has add several options when it comes to resources, market segment, organizational structuring and general strategic management. The selection of various options has however been done with particular focus and attention to what prevails with competitors. This is because consumers of products and services offered by the company keep becoming inclined with the choices of products and services they want. As a result, the company has been forced to view and review its available options from a perspective that best meet consumer demand. In doing so, the need to take advantage of technology has almost become inevitable. By and large, the company can boast of being one of the world’s fastest growing companies just because it has been able to utilize its chances with the options that technology offers very well. Cited Works Edney, Clarence W. 2006. “Hugh Blair’s Theory of Dispositio”. Speech Monographs 23(1):38-45. Print. Elmer-DeWitt, Philip. 25th anniversary video: Steve Jobs unveils the Mac. CNNMoney. 2009. Web. May 19, 2013. Hannah, Sean T., & Peter L. Jennings. 2013. “Leader Ethos and Big-C Character”. Organizational Dynamics 42(1):8-16. Print. Koene, Bas A. S., Ad L. W. Vogelaar, & Joseph L. Soeters. 2002. “Leadership effects on organizational climate and financial performance: Local leadership effect in chain organizations”. Leadership Quarterly 13:193-215. Print. Milian, Mark. The spiritual side of Steve Jobs”. CNN, October 6. 2013. Web. February 21, 2013. Norton, Robert W. Communicator Style: Theory, applications, and measures. Beverly Hills, CA. Sage. 2003. Print. Oshima, Alice, & Ann Hogue. Writing Academic Strategies. New York: Pearson Longman. 2006. Print. Sampler Jeff. Module 5: Using Technology to Create Strategic Options. TRUIM Class of 2014. 2013. Print. Read More