Market Performance of Apple Company - Research Paper Example

? ………………………….. College ……………………………… ……………….. APPLE INC. Words count: 2761 Table of Contents Table of Contents 2 Introduction 3 Apple Inc. Company Overview 3 Market and industry analysis 4 Management team 5 Competitor Analysis 6 Organizational chart 7 Management and Leadership 8 Structure and Organizational Culture 9 Human Resource Management of Apple Inc 10 Business Strategies 11 Financial Report Card 12 Conclusion 13 Works Cited 14 Introduction Apple Inc, ranked as 6th in fortune 500 companies, has emerged to become one of the most influential multinational companies to amazingly impact the technology, society and the world at large. Apple Inc has always been fostering innovation and promising to revolutionize the market and as a result its business, strategies and success story have attracted wide attention of business experts and academicians worldwide. This research paper presents a brief analysis of Apple Inc, comprising important sections such as company’s background, organizational chart, its strategic management and leadership, human resource management, organizational structure and culture and business strategies. Based on relevant literatures, this paper explains how Apple Inc has revolutionized its business by tremendously impacting its market and customers. Apple Inc. Company Overview Apple Inc. has been established by Steve Jobs, Ronald Wayne and Steve Wozniak in early 1970s when a hobby-machine that a very talented electronic wiz developed for himself and thence they thought to market it (O'Grady 2008, p. 1). The company has experienced full of highs and lows in its past 30 years as normally expected of a technology company and has still remained far positive despite economic, competitive and marketing challenges it faced. Apple Inc. headquartered in Cupertino, California and incorporated in January 3, 1977, is engaged in designing, developing, manufacturing and marketing of personal computers, communication devices, servers, network solutions, portable music digital players and many other related accessories and peripherals (Reuters.com, 2013). The company markets and distributed its hardware and software solutions through its own-retail stores, online stores, sales force and third party sellers (Sander and Slatter 2009, p. 81). The most unique feature of the company was that it has always been prospering on innovation. The company gained a very significant portion of the market in 1990s when it developed personal computer in the brand name Apple II, and when it reinvented the same within the next decade in the brand name Macintosh and thus ultimately to have gained a very deeply-routed brand loyalty with iMac in 1990s (Kerin, et al, 2005, p. 395). iMac helped the company identify a very vast opportunity of a new market that has been until then hidden and it continually innovated many varying products and services in names of iPod, iPad, iTune, iLife, iPhone, iCloud, and so on. Market and industry analysis Apple Inc plays pivotal roles or leading shares in different industries such as Personal computer, tablet PCs, Smartphone, operating system etc. Hodgkins (2012) reported Gartner’s release about Apple’s market share in its personal computer industry. Though the report was a bad news for the industry as a whole due to that consumers are spending less on PCs as there are other technologies such as Smartphone and Tablet PCs, the news was very good for Apple that it showed an increase of its sales by 4.3 percent in the second quarter beating the shares of its competitors such as HP, Toshiba and Acer. When it comes to the market of Tablet PCs, the report was interesting that Apple’s share was nearing to its all-time high. In the second quarter of 2012, Apple shipped a total of 17 million Tablet PCs with an increase of 44.1% from the figure of 11.8 million in the first quarter. Apple holds 64.4 % of the total Tablet PCs market share where as the second leading company Samsung holds only 9.9 % of the market share (Graziano, 2012). As far as Apple’s Smartphone’s market share is concerned, the latest report showed that the company gained na increase of 25.1 percent in its market share in the Smartphone market. Apple’s total Smartphone’s shipments have been increased by 46.9 percent from the 93.1 million handsets of 2011 to 136.8 million in 2012 (Apple insider, 2012). Management team Apple’s co-founder Steve Jobs, born in 1955 in California, has been controlling the business side of Apple Inc with greater leadership abilities and in the position of CEO till 1980s while Steve Wozniak controlled the design side of the company. Due to a power struggle among the directors, Steve Jobs left Apple Inc. and joined as CEO of another company NeXT. It was a turning point in the history of both Apple and Steve Jobs when Apple decided to buy NeXT and to appoint Steve Jobs as Apple’s CEO in 1997. Steve Jobs continued as the CEO of Apple until his retirement in 2011. Steve Jobs has been very renowned for his outstanding leadership and transformational quality in fostering innovation and technology advance to have changed the way people think about computer and Smartphone (Bellis, 2013). When Steve Jobs stepped down as CEO in 2011, Tim Cook moved up from COO to CEO and he has later brought some structural changes in the management team. Recently Tim Cook announced that Apple’s executive team is at the very top of their game as he has made some changes in the management level based on skills and experiences represented in the company’s top leadership positions (Dilger, 2013). Biographies of three top executives of Apple Inc are outlined below: 1- Tim Cook (CEO): Before he took the responsibility of CEO in Apple, he has been Apple’s Chief Operating Officer and was responsible for Apple’s worldwide sales and operations. He played significant role in Macintosh division and took role in continued innovation. Before joining in Apple, he worked as vice president for Corporate Materials for Compaq and was chief operating officer of the Reseller Division of Intelligent Electronics (Apple Press Info, 2013). 2- Eddy Cue (Senior Vice President, Internet Software and Services): Eddy Cue is responsible for overseeing Apple’s industry-leading content including iTunes, iBookstore, Maps, iAd and iCloud services. His team and leadership has proven excellent track record of strengthening online services to meet customers expectations. He took pivotal role in building Apple’s own-stores in 1998, iTune stores n 2003 and App store in 2008 (Apple Press Info, 2013). 3- Craig Federighi (Senior Vice President, Software Engineering): Craig Federighi is responsible for overseeing the development of Ios, Mac OS, and Apple’s common operating systems. His management team plays very crucial role in developing innovative products and applications. Craig was working in NeXT and returned to Apple in 2009 to lead OS X engineering (Apple Press Info, 2013). Competitor Analysis Hoovers identified HP, Google and Blackberry as the most important and rival competitors of Apple Inc (Hoovers.com, 2013). HP is ranked as 15 among the Fortune 500 companies and is the world’s largest producer of Personal computers. Since Apple plays significant role in PCs market, it faces severe competition from HP. Google is ranked as 55th in the Fortune 500 companies and is generating revenues through ad sales. Since Apple plays major roles in ad sales, operating systems, Smartphone and networking etc, it faces competition from Google. Blackberry provides wireless hardware, software and services worldwide. It produces and markets Smartphone and therefore Apple faces competition from Blackberry as well. Organizational chart Organizational chart is a diagram of chain of commands and reporting relationship in an organization (Phillips and Gully, p. 455). Most organizations plan, design and prepare a well-structured diagram to show the chain of commands and reporting relationship between different levels of management so as to ensure smooth flow of communication and reporting between them. The organizational chart is typically presented by boxes or pyramid-shaped or pie-typed chart. It may take one of several forms reflecting how the administration and operating are carried out within the firm. Span of control is a major determinant in an organization’s chart. Apple’s organizational chart illustrated by Dediu (2013) as depicted above illustrates the route of communication and span of commanding between the CEO of Apple and various chief executives or vice presidents of varying departments or sections. The organizational chart of Apple Inc portrays roles and patterns of interaction among different sections of the whole organizational system. Management and Leadership Apple Inc is best known for most effective management and leadership practices. Literatures have emphasized that Apple Inc. has shown best lessons of management and leadership models from the managerial and leadership roles played by Steve Jobs especially after his return to the company 1997. He influenced his people, brought newer ideas of strategies, effectively faced competition and innovated to dominate the market with many different products and services that were uniquely labeled with ‘i’ such as iPad, iPod, iMusic, iPhone and so on. Ng (2011) stressed that a great manager usually exhibits none common management practices and he advocated that Apple can certainly be considered for a firm that proved great management lessons. Ng (2011) argued that Steve Jobs transformed the former Apple computer in to a new and unique Apple, and later the name has moved to completely a new frontier. Steve Jobs has successfully created and established a blue ocean for Apple and therefore Apple remained an ever-embracing lesson of best management practices. As far as the leadership practices of Steve Jobs and the present CEO are considered, Apple still remains to be an illuminating lesson for other businesses to achieve sustainable competitive advantages through transformational change and through organizational change. Change management concepts emphasize the importance of leader in enacting a change. Apple has always been changing, innovating and making people think differently. Transformational leaders influence followers to recognize the need for change, create a new vision and then institutionalize the change. In those firms that witness frequent changes, the leadership style in such organizations can motivate the followers to identify leader’s vision and dynamic idea for change. When it comes to Apple Inc, Lunenburg and Ornstein (p. 128) pointed that transformational leadership depicts four dimensions; that are 1) idealized influence, 2) inspirational motivation, 3) intellectual stimulation and 4) individualized consideration. They also argued that Steve Jobs showed idealized influence by emphasizing the importance of creating Macintosh as a very radical new computer and then followed many products such as iPod. Anderson, Babin and Mehta (p. 300) argued that Charismatic leadership is characterized by a vision to appeal the subordinates and their desire to be part of something that has bigger and brighter future. They advocated that Steve Jobs inspired loyalty to his vision by continually developing innovative and exciting new products and therefore he was a charismatic leader. Literatures hypothesized that both transformational and charismatic are the high-valued leadership styles. Structure and Organizational Culture Organizational structure designates formal reporting relationship including the number of levels, span of control, flow of communication among the managers, executives and supervisors (Daft, 90). Apple has designed a well-structure organization chart wherein all the vice presidents and managers have to directly report to the chief executive officer. The company is governed by board of directors, CEO and standard executive boards. With transformational leadership and highly effective management styles at Apple inc, CEO has always been a highly influential power to influence managers and to implement change effectively. Organizational culture refers to a system of shared values, actions and beliefs that are established in a firm and this influences its members to guide and shape their behavior (Schermerhorn, Hunt and Osborn, p. 436). It is a basic pattern of shared values, assumptions and beliefs that are considered as the right way of thinking and acting to deal with problems and opportunities facing the firm (McShane and Von Glinow, p. 476). At organizational level, Apple has been concentrating on cultural traits such as honesty, respect, confidentiality and compliance. These cultural dogmas were designed to show honesty and ethical standards in all business deals, to treat customers and stakeholders with respect, to protect confidentiality of company information and to ensure that business is compliant to laws and regulations (Sherman, 2010) Human Resource Management of Apple Inc Human resources, also known as intellectual capital, represent the most powerful assets in a firm and therefore managing human capital most effectively is at the very heart of HRM. As human capital is the term that represents knowledge, skills, talents, competency and wisdom of people in an organization, HRM aims at utilizing these values through strategic activities such as training and development, organizational learning, reward and recognition, collaborative activities and the like. Apple’s success also depends on its strategic human resource management practices. Apple’s present CEO Tim Cook gives greater importance to recruiting and hiring people according to their qualification and experience. The company always went for selective hiring and strategic selection process. Once employees are recruited, the company is very keen to offer dynamic training and development program so as to foster knowledge sharing and organizational learning among the members. Apple Inc. has recently won the No-1 place in World’s Most Admired Knowledge Enterprises award mainly for that the company has continually fostered innovation. by considering certain criteria like knowledge driven culture, innovation, intellectual capital, knowledge sharing, organizational learning etc, the KNOW Network preferred Apple to all multi-billion multinational companies (The KNOW Network, 2013). This award is a true evidence for how strategically Apple is managing its human resources because the company facilitates knowledge sharing, organizational learning and thus to foster innovation. Apple Inc has launched its own-stores for retailing so as to eliminate middle-men margins and to make goods or services more competitive to customers. In order to ensure increased customer satisfaction and loyalty, Apple Inc focused on retaining experienced workforce. Retaining experienced and even older-workforce is one of the very effective HR strategies to help a firm achieve competitive edge. Business Strategies Porter (p. 29) described that an organization may consider either an offensive or defensive strategic action to create a defendable position against its major competitive forces. Innovation, complete solution, technology, differentiation and own-store retailing are some of the mainframe business strategies of Apple Inc and all these strategies were more or less capable of building string defense against its competitors such as HP, Acer, Dell, Samsung, Google, Blackberry etc. One of the most significant business strategies of Apple Inc is innovative design and differentiation. After 1997, Steve Jobs cut Apple’s total products in to four segments, namely laptop and desktop for consumers and the same for professional or business users. He did it by redesigning the products (Betz, p. 194- 195). Hoskisson, Hitt and Ireland (p. 133) emphasized that Apple’s business strategy was to differentiate computers and other products. The story of Apple’s differentiation strategy goes back to 1998 when it invented iMac. It introduced an Operating system in 1999 as its second move (Linzmayer, p. 297). After its iMac and iBook, Steve Jobs developed iPod as a significant move to digital lifestyle strategy. In 2003, the company developed iDvd, iMovie, iPhoto and iTunes (Linzmayer, p. 300- 302). With the strategic vision of ‘Think Different’, Apple developed a market of its own (Schmitt, p. 168) and approached customers with a number of different products in different industries. All the markets it entered, Apple made a very positive zeal of customer satisfaction, loyalty and long-term relation and this has been evident from the news about people’s rush in retail stores to buy some of its products such iPhone, iPhone S5 etc. As compared to many of its competitors, Apple approached the market very differently. Its product differentiation strategy, complete solution technique and own-store retailing strategy were very different in that sense. Apple didn’t concentrate in any specific market, but placed vital share in PCs, Smartphone, Software solutions, networking, Tablet PCs, etc. No multinational companies have so far been successful as Apple in successfully implementing and running own-store retailing (Gitman and McDaniel,p. 345). Financial Report Card The financial report card of Apple inc. is depicted below. This chart clearly illustrates share-market price of Apple’s share from 4th September to 3rd December. The graph shows that the highest share-price was $556.07 which was from 29th November to 3rd December. The stock price at the closing date shows a meager decline. The lowest share price was $450.12 which was on 16th September. Conclusion This paper presented a brief analysis of Apple Inc based on relevant literatures, market data and analytical reports. This paper outlined a brief overview of the company by illustrating brief bios of three senior executives and a brief analysis of three major competitors. As critically important to analyzing a company, many other important sections such as analyzing Apple’s management and leadership, its HRM practices, its business strategies, organizational structure and culture and organizational chart are also detailed in this paper. 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