Strategic Management and Strategic Competitiveness - Essay Example

Strategic Management and Strategic Competitiveness Introduction Apple Inc is a multinational company (MNC) based in the United s. It was established in the year 1977, as Apple Computer, Inc and was retitled as Apple Inc in the year 2007 in order to primarily emphasise electronic products from merely manufacturing computers. Specially mentioning, globalisation and technological changes have been the key reason behind its shift from computers to electronic products. In addition, these changes have resulted in the company to manufacture varied ranges of goods and services which consist of ‘iPhone’, ‘iPad‘, ‘iPod’, ‘Mac’, ‘Apple TV’ and other software applications (EDGAR Online, Inc., 2013). The paper intends to analyse the impact of globalisation and technological changes on Apple Inc. Industrial organization model and resource-based model will be used to determine how Apple Inc. can earn beyond its average returns. In addition, the paper will also assess the vision and mission statement of the company that has influenced its overall success. Moreover, each category of stakeholders will be evaluated in order to analyse its impact on the overall success achieved by Apple. Impact of Globalisation and Technological Changes Globalisation has been ever-persisting in the contemporary business scenario which has influenced the business operations of various companies. In this regard, it is considered that globalisation has impacted the products and services produced by Apple Inc. wherein it has been developing products that are quite competitive in the globalised market. Apple has adopted forceful price cutting which has reduced its gross profit margin on each product. Apple has been frequently launching new products in the market with undersized product life cycle along with developing industrial standards. Consequently, it has been revealed that globalisation has helped the company to improve its product characteristics along with making it to adopt new technologies that have resulted in product advancements and price sensitivity in its products (Apple Inc., 2013). Technological changes on the other hand have impacted the overall business operations of Apple due to which it has been developing innovative products in the market. Apple has developed a set of unique designs for its products through effective use of advanced technologies. This uniqueness has been witnessed in terms of software applications, operating systems and other services related to the products. It is worth mentioning that the competitive advantage of Apple Inc. in the global market has been highly impacted as competitors using these advanced technologies have at times interfered with the intellectual property rights of the company. Additionally, technological changes have created the extent of risk for the company wherein it might forecast the product demand incorrectly thereby resulting to its production failures (Apple Inc., 2013). Application of the Industrial Organization Model and the Resource-Based Model Industrial organization (I/O) model is type of model that can help a company to earn above average returns as it highly influences the performance that is determined by certain factors such as economies of scale, barriers to entry and product distinction. This model is based upon four assumptions which can be applied to Apple in order to alleviate its performance and enable it to earn above average returns. The first assumption is that external environment of Apple’s business imposes certain pressures on its business operations due to which the company has to adopt robust strategies to earn more than its average returns. The second assumption is that the competitors of Apple Inc. such as Samsung and Nokia control similar kind of resources due to which these competitors follow strategies that are quite similar in nature. Therefore, it is considered that Apple will have to strategize the use of its resources and formulate certain plans that ultimately benefit the company to gain relatively more as compared to its average returns. Similarly, the third assumption is that resources used by companies to apply strategies are mobile across the industry. Thus, due to resource mobility Apple requires to use resources that will differentiate the company from its competitors thereby resulting in above average returns. The fourth assumption is that decision makers in an organisation are usually rational and are dedicated to profit maximisation. Therefore, as per the assumption decision makers in Apple must focus towards enhancing the operational activity of its business which will ultimately ensure that the company can gain more than its usual returns (Hoskisson et al., 2008). In accordance with the resource-based model, Apple requires to identify the resources used by it in the production process in order to compare its strengths and weaknesses with its competitors. Consequently, Apple has to enhance its capability of executing a task which will allow the company to outperform its competitors. The next step is to determine Apple’s potential to maintain a competitive advantage in the market and exploit new business opportunities. Eventually, a strategy has to be formulated and accordingly employed that would completely use Apple’s competences and resources through strategic actions. This in turn will ensure that Apple can achieve superior returns which would be comparatively more than its usual or average returns (Hoskisson et al., 2008). Assessment of Vision Statement and Mission Statement Apple’s Vision Statement: “To produce high-quality, low cost, easy to use products that incorporate high technology for the individual. We are proving that high technology does not have to be intimidating for non-computer experts” (Stanton & Lemer, 2010). From the above mentioned vision statement, it can be apparently stated that as the company is focused towards producing high quality products that incorporate high technology, the overall success of Apple from the past few years has been influenced. This is because Apple has created a strong brand image and has positioned its products as highly qualitative (Stanton & Lemer, 2010). Apple’s Mission Statement: “Apple is committed to ensuring the highest standards of social responsibility in everything we do. The companies we do business with must provide safe working conditions, treat employees fairly, and use environmentally responsible manufacturing processes wherever Apple products are made” (Apple Inc., 2014). Mission statement has played a significant role for the company to attain overall success as it has produced products that are highly standardised along with being a socially responsible business unit. In addition, the production process of Apple emphasises environmentally responsible measures which makes it quite apparent to inference its overall success (Apple Inc., 2014). Evaluation of Stakeholders’ Impact There are different categories of stakeholders in Apple which include the employees, business investors, customers and others. It is considered that each of these stakeholders plays a considerable role in the overall success of the company. This can be justified as employees who are the most valued assets within the company provide their significant inputs in terms of labour and effort. Correspondingly, it is worth mentioning that employees are the ones who continuously focus towards innovating the products and maintaining high quality standards. Likewise, investors have been highly responsible for the overall success of the company as they have been supportive and dependable through the investment they have made in the company. Likewise, customers have also played a key role in the overall success of the company as they have trusted Apple’s products completely and purchased them as per their requirement. Customers have highly relied on the brand image of Apple which in turn has facilitated its overall success (Chaffin, 2012). Conclusion From the above analysis and discussion, it has been identified that globalisation has induced significant changes within Apple wherein it has completely changed its product line from computers to other electronic products. Globalisation has made the market more competitive due to which Apple has developed strategic steps to survive in the global market. Frequent technological changes have created a new challenge for the company to maintain its high product standards. However, if I/O model or resource based model is applied in the company than it can maintain high standards along with earning above average returns. References Apple Inc. (2013). Form 10-K. Retrieved from http://investor.apple.com/secfiling.cfm?filingid=1193125-13-416534&cik= Apple Inc. (2014). Apple support communities. Retrieved from https://discussions.apple.com/message/23217921 Chaffin, M. (2012). Strategic plan for Apple Inc. CO 469V-03 Capstone, 1-12. EDGAR Online, Inc. (2013). Annual report. Form 10-K, 1-84. Hoskisson, R. E., Hitt, M. A., Ireland, R. D., & Harrison, J. S. (2008). Competing for advantage. Thomson Learning, Inc., 1-29. Stanton, E. & Lemer, C. (2010). MBA for medics. United Kingdom: Radcliffe Publishing. Read More