The Analysis of the Apple Corporation - Admission/Application Essay Example

The Apple Corporation Tony Webb Dr. Linda Harris BUS 499- Business Administration CapstoneThe Apple Corporation The company I have chosen for the analysis and as a preferred future place for employment in Apple Inc, one of the pioneering technology companies in the world and highly regarded for its branded product of personal computers, cell phones and tablet PCs. The company is incorporated in Cupertino, California and went public in 1980 with a starting share price of 22$ generating an astounding amount of capital for an IPO. In the decades following, the company went through several stages of success and decline based on their product innovations and strategy. 1. Determine the impact that the company’s primary stakeholder has on the company’s success. The company cannot be separated from its iconic leader Steve Jobs who is heralded as the true driving force behind Apple’s success in the technology arena. Steve Jobs was responsible for the launch of the ipod, iphone and ipad lines of products and for outlining the strategy of Apple as a the market leader in high-class, luxury technology. However, it was Job’s leadership that had the biggest impact on the company’s success rather than stakeholder influence. While most publicly traded companies issue dividends and other paybacks to return shareholder value, Jobs famously chose to do differently. The company did not issue dividends for as long as Job’s was the leader instead opting to utilize all capital resources in order to finance their innovative research and development and marketing efforts. There were open objections to this policy but this did not impact the stock market performance of Apple shares which has increased over  370% over the last five years (Darell, 2014). However, since the appointment of Apple’s new CEO Tim Cook, the company started paying dividends in 2012 and launched a share buyback program worth $90 Billion. It seems that this measure was taken to appease the shareholder’s demands and increase the preference of Apple shares in the aftermath of the Steve Job’s death. The major change in Apple shareholding came in 2013 when the largest active shareholder Fidelity Contrafund cut down their holdings by 10% due to the declining price of Apple shares (Reuters, 2013). This caused concern among Apple management but now the market is showing signs of improvement after the news releases about their new product line. 2. Analyze how competition impacts the company. The company is working in an industry famous for making millionaires out of startups based on the next big technological innovation. The technology sector is fueled by innovation, research and changing consumer demands. Apple successfully rose above the competition initially with technology products aimed at the mass market, charging a premium for providing deceives which were simple to use, had sleek aesthetics and were positioned as status symbols. For about a decade since the launch of the first ipod Apple did not have any direct competitors as it had followed blue ocean strategy, creating a completely different market for itself. In the recent years as the other companies have started to catch-up on the smart phone trends, Apple is facing competition both directly and indirectly. South Korean Samsung has become the worldwide leader in smart phones placed directly against Apple, providing products for a varying price range something that Apple has only just started to do. Besides this there are other smaller competitors like HTC (Taiwanese), Nokia and Chinese companies all providing the same technology as Apple and they have started to increase consumer awareness about some of the ethical concerns against Apple’s labor use, pricing and sourcing. The pressure at this point is about releasing better products faster and to retain customer loyalty and good will. Apple has to compete against all of brands at the same time. As a response, Apple has strengthened its marketing efforts. Branding their products strongly in all emerging and established markets such as India, China, South America and South Asia; launching entirely new product lines and product launches like the rumored iWatch and iPhone 6 and changing their culture towards a more customer-centric one. These efforts are also combined with increased communication with shareholders. 3a. Analyze how the company’s major strength impacts the company Brand loyalty and a strong history of technological innovations are the company’s biggest asset and the company is capitalizing on them as the completion becomes more challenging. The elite image of the products and the strong customer images ensure that even if the company launches a critically mediocre product they will be able to at least break even in the market such was the case with iPhone 5. As of now the company has a strong strategy that they can follow for the next 5 years. 3b. Analyze how the company’s major weakness impacts the company The critics of the company point out to the lack of changes in their major product lines in recent years which hare only incrementally modified before each release. It is indicated that the company is lagging behind in developing novel products but still charging premium prices which may discourage customers from purchasing Apple products. In recent years a lot of controversy has also been raised about the companies exploitative Labor policies in developing countries. Consumers concerned with CSR and ethical purchasing have started to shift towards other, less troublesome, firms. To contend with both these issues and protect their brand image the company needs to move towards transparent communication with consumers and stakeholders. 3c. Analyze how the company’s major opportunity impacts the company At this point, the emerging middle-class supported market in India and China are biggest opportunity for the company. Economic growth and increase in disposable income has allowed consumers in these countries to indulge in branded, luxury and modern products. Apple as the well-established western brand can find huge market potential in these countries and is already working on extensive product launches and marketing initiatives customized to the cultures present there. The iPhone 5C (with vibrant colors and lower price points) was targeted towards the developing markets. 3d. Analyze how the company’s major threat impacts the company Changing technology trends, consumer demands and the tough completion from other Smartphone manufacturers are all threatening Apple’s market leadership. If they don’t’ respond to these threats in a timely manner it is possible that they can lose their position in the smartphone market as well as lose consumer confidence. 4.Outline a strategy about the company can overcome its major weakness The strong brand image of Apple and consumer loyalty can help it stand against most threats as long as they are careful. However, if they lose this brand image then it will be very difficult to cater to the other challenges. The increasing ethical concerns against Apple’s labor practices and unfair technology acquisition can change consumer perception about the company permanently. The company has to safeguard against such a backlash by opting for a long term strategy of accountability, communication and active CSR (including better labor practices) to appease all stakeholders. 5.Discuss a strategy that the company will use to maximize its profitability. As far as profitability is concerned the company can follow its tried-and-tested strategy of launching innovative and attractive products to the mass market. But to achieve this focus has to be on both market research and research and development in technology. The same strategy propelled Apple to the top of the market and it can keep it there. 6.Outline a communications plan the company will use for its stockholders. Company Qaurtely reports and shareholder meetings are the most common venues for information dissemination by the company. Recently, Tim cook the new CEO has increased the volume of press releases to keep the stakeholders informed. However, in order to provide fast updates and re-enforce their image as the technology savants the company can also opt for a secure web portal or smart phone application released only to stockholders and used for timely communication. The digital feedback can be stored and analyzed to anticipate trends and concerns. 7. Determine how the company will effectively control its managerial actions. Accountability and use of a hierarchical structure can ensure a smooth work flow within the firm. Proper control systems and a robust communication system can also impact the overall culture and encourage sound management practices in the long run. By allowing all the stakeholders to witness the decisions being made within the company, there can be a stronger push towards more sound managerial actions. 8. Make one recommendation about how the company will ensure its managers are effective leaders. While Steve Jobs was the leader of the company he was the sole authority, with no delegation of decision making. With the change is leadership the company can now initiate succession and promotion plans that place high performers onto top management paths. These performers can be formally trained for leadership (workshops, seminars etc) but a greater focus should be on providing them with increasing experience of leadership and responsibility within their work capacity as team leads, project coordinator etc. 9.Determine how effectively the company uses corporate social responsibility. As discussed before, this is the one area where Apple has been unable to make an impact. The company is criticized for its lack of CSR initiatives; most importantly with its treatment of low-paid workers in the out sourced factories in developing countries. Even the primary stake holders like customers and shareholders have had complains against the company for being uncommunicative and unconcerned with their demands. Apple has made noticeable change in this regard but they still need to focus on their labor operations and worker relationships both abroad and within the US. References Apple Inc, (2014). Investor Relations, Leadership and Governance. Available at: http://investor.apple.com/corporate-governance.cfm Darrell, L., (2014). Here Is Why We Are Bullish On Apple Inc. Bidness ETC. Available at: http://www.bidnessetc.com/business/apple-inc-nasdaq-aapl-stock-analysis-heres-why- we-are-bullish-on-apple/ EDGAR, (2014). APPLE INC CIK#: 0000320193. US Securities and Exchange Commission. Available at: https://www.sec.gov/cgi-bin/browse- edgar?company=Apple+Inc&owner=exclude&action=getcompany Jurevicius, O., (2013). SWOT analysis of Apple. Strategic Management Insight. Available at: http://www.strategicmanagementinsight.com/swot-analyses/apple-swot-analysis.html Reuters, (2013). Apples Largest Shareholder Cuts Stake 10 Percent. Technology. Available at: http://www.cnbc.com/id/100606479#. Read More