Impact of the Company's Mission, Vision, and Primary Stakeholders on Its Overall Success - Case Study Example

CAPSTONE Capstone Apple Corporation Determine The Impact Of The Companys Mission, Vision, And Primary Stakeholders On Its Overall Success The Apple Corporation mission, according to the company’s website is quoted as follows, “Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone with its revolutionary iPhone and App Store and were defining the future of mobile media and computing devices with iPad (Badenhausen, 2014).This mission statement has enabled the company to retain a competitive edge in personal computing, smartphones, and other technological gadgets. The iPhone, for instance, continues to be the most popular smartphone in the world today with their latest iPhone 6 already out. Forbes magazine projects the company could sell up to 70.9 million units of the new smartphone (Badenhausen, 2014). The company’s mission has also made Apple come up with the most innovative products and feature hence making it the most profitable company in the world with annual brand revenue of $170.9 Billion (”(Badenhausen, 2014). Unlike other companies, however, Apple has no written vision statement. Instead, the company’s vision is manifested through its leadership like Steve Jobs and current C.E.O Tim Cook. These leaders coin philosophies that they then pass on to the departments like Research and development which then try to come up with product concepts that are consistent with these philosophies. For instance, in the year 1998, former chief executive Steve Jobs envisioned a paradigm shift in the conventional design of personal computers and led his team into a revolution that was to change the norm permanently by introducing the iMac computer. This has given the company an edge in innovation and creativity. Some of the primary stakeholders of Apple include lenders, company employees, developers, and customers. These groups have also impacted the company in significant ways. For instance, the company enjoys an almost fanatical following from its customers. These customers have been the driving force behind apples astronomical sales figures over the years (Jones &Hill 2011). The developers have helped contribute innovative product ideas which have enabled the company produces cutting edge technological devices like the iPad. Overall, the company’s primary stakeholders have had a significant impact on Apple’s bottom line. Analyze The Five (5) Forces Of Competition To Determine How They Impact The Company. The paragraphs below discuss the five forces of competition and their impact on Apple Corporation. Threat of New Entrants: For apple computers, the threat of new market entrants especially in the smartphone and personal computers category is significantly lower owing to the company’s superior brand which is global. The company also enjoys backing from a sizable net worth of $185 Billion which gives it enough resources to fend off any potential completion from new entrants. In addition, threats from Chinese clones and counterfeits are also a point of concern and apple has set up a very robust distribution network with heavily vetted franchises in their markets. The company is a leader in the personal computing and smartphone niche which has worked well for it. With a very powerful marketing wing funded to the tune of billions of dollars, apple has made it increasingly difficult for new entrants to penetrate and even eat into its market share (Jones & Hill 2011). Bargaining Power of Suppliers: Suppliers pose a significant challenge to the Apple Corporation since the market is awash with chip set suppliers who have a serious bargaining power. These suppliers are mostly from Taiwan or China and can push for a change in terms of engagement like demanding for more money for their components (Namee 2007). When this happens, the company has no choice but to pass on the costs to the consumer that in turn pushes prices of their products upwards. This poses a challenge since because it puts apple products directly into competition with other less costly brands like Samsung, Nokia, and HTC. Consequently, Apple leverages on its brand name and reputation to generate sales for its products in the face of this competition. The company also invests heavily on marketing and creating a stronger brand presence (Jones &Hill 2011). Bargaining Power of Buyers: Although Apple produces premium products for a niche market segment of high income group of consumers who care less about the pricing of their products, the company has invested in putting their products as the most superior in the market especially in the face of stiffer competition from Samsung and Nokia brands. With consumers becoming more cautious about their spending and a slow economy, apple has had to reconsider their business model by putting products for different market segments in order to be market driven. For instance, the company had to introduce iPhone 5C in 2013 which was essentially a budget version of the iPhone 5 S to offer its customers variety (”(Badenhausen, 2014). Threat of Substitutes This has been apple’s biggest challenge with substitute brands such as Samsung increasingly eating into Apple’s market share. Other brands such as LG, Nokia, Sony Ericsson and HTC are gradually establishing themselves as reputable brands and producing fairly decent merchandise able to match Apple products (Namee 2007). These substitutes also offer customers value for money, besides giving them a variety to choose from. For example, Google’s Android operating system and Microsoft’s windows are ostensibly the biggest direct competitors to Apple’s IOS. Apple has thus been forced to continuously upgrade their operating systems and hardware to remain competitive. Degree of Rivalry The smartphone segment is marred by a stiff competition from well-established rivals that offer intensive completion to Apple. This rivalry has led to several patent related law suits involving Apple and its main rival Samsung. For instance, in 2013 Apple successfully sued Samsung for patent infringement and won a compensation of $ 2 billion from the South Korea based competitor. This has strained relationships between the companies in recent times with each taking to social media and other platforms to discredit the authenticity of the other (Jones & Hill 2011). Create A SWOT Analysis For The Company To Determine Its Major Strengths And Weaknesses. Opportunities, And Threats Apple SWOT Analysis Apple SWOT analysis 2014 Strengths Weaknesses 1. Ability to undertake intensive marketing 2. Elaborate and well organized distribution networks 3. Vertically integrated systems 4. Brand presence and strong reputation 1. Weak product portfolio and price inflexibility 2. Lack of proper distribution network in Asia 3. Over reliance on iPhone and iPads to as mainstream products 4. Failure to innovate fast enough 5. Inaccessibility to third party developers Opportunities Threats 1. Mergers and takeovers of valuable startups 2. Mobile money transactions 3. Wearable accessories and gear 1. Competitors 2. Strong home currency 3. Legal suits over ethical issues Based on the SWOT Analysis, Outline A Strategy For The Company To Capitalize On Its Strengths And Opportunities, And Minimize Its Weaknesses And Threats. Collaboration Rather than relying upon one or two companies to help meet its various strategic goals, Apple should cast its nets wider by diversifying and working with different companies in order to produce the best gadgets for its loyal clientele, this is because working with one company breeds complacency leading to inferior products. To implement this, Apple needs to carry out research on the different companies with whom they can partner with to provide either raw materials or post production services like distribution (www.forbes.com). An assessment of potential partners by collection as much primary and secondary data as possible about the company before they attempt a partnership. This data can be gotten from, newspapers, internet, and even trade journals. After this is done, the company should narrow their focus on the very best in terms of innovation and experience. Apple should then inform the company on why they are seeking a partnership while clearly highlighting what they expect from the company. For instance, before launching their next iPhone series, apple should evaluate the available product launch companies and pick the best among them to help them launch their gadget (Jones& Hill 2011). Discuss The Various Levels And Types Of Strategies The Firm May Use To Maximize Its Competitiveness And Profitability. Reputation To avoid losing money and earning a bad reputation for unethical practices such as flouting labor laws, the company should put in place a comprehensive policy framework to act as a guideline in the company’s assembly lines and manufacturing outlets (Namee 2007). Apple should also invest in a proper PR machinery to help with managing image related crisis. The company can also allocate more funds in research and developments to foster creativity hence avoid patent related legal feuds with its competitors. Markets To strengthen its distribution networks, and channels in continents like Asia, Apple should focus on setting up retail outlets in those countries. This one area that can help the company increase brand presence beside generating more sales and increasing the company’s profitability (Sadler 2003). By entering these markets, Apple will get an opportunity to increase its market share significantly. To implement this, Apple should draw a comparison between variables like psychographics and demographics especially in the emerging economies that the company plans to venture in. Product Portfolio Apple has been overly reliant on the iPhone range of smartphones and iPads as its mainstream products to generate sales (apple.com). This is putting the company at a great disadvantage especially against a brand like Samsung that has a wide array of products, as well as producing for every market segment. The ideal strategy for Apple is to diversify its product portfolio in order to capture all the markets. Apple can start by venturing into other product types apart from smartphones and computers. The recent takeover of Beats by Dre headphones by the company is one such initiative ((Badenhausen, 2014). Outline Communications Plans The Company Could Use To Make The Strategies You Recommend Above Known To All Stakeholders This communications plan is designed to communicate Apple’s strategic goals, visions and objectives to its stakeholders. The plan aims at positioning apple as a leader in the production of premium personal computing devices, smartphones, and other accessories. The plan has a clearly defined target audience; the message to be passed and the platforms to be used. This plan hopes to achieve its end in the desired time frame.Project Audience Owing to the limited timeline for the communication of apple’s strategic objectives, this communication plan will be targeted to Apple’s for main groups of stakeholders. Apple corporation employees Apple corporation customers/ existing and potential Component manufacturers and suppliers Apple quasi investors including lenders Software developers Project Information The diagram below shows an outline of the communication plan and information therein. Select Two (2) Corporate Governance Mechanisms Used By This Corporation And Evaluate How Effective They Are At Controlling Managerial Actions. At Apple inc, recruitment of potential directors for the company is conducted by the Nominating and Corporate Governance Committee, upon successful assessment of candidate’s qualification, and experience. This committee then gives a recommendation of the candidate’s suitability to the Apple Board. In addition, Apple’s shareholders can use the annual general meetings to nominate directors in line with the company’s bylaws (apple.com). These candidates will then face the Nominating and Corporate Governance Committee before they are confirmed as directors. The main focus is the candidate’s character, independent-mindedness, and superior capacity to display good judgment. This model has proved very effective at managing Apple’s managerial actions and keeping the company consistent (Sadler 2003).For instance, the appointment process ensures only the best candidates are recruited to head Apple at any given time. Case in point was the appointment of current Chief executive Tim Cook to replace Steve Jobs after his death. As can be seen, the transition process was so seamless that Cook’s appointment did not affect the company’s philosophy in any way. Retirement Policy According to Apple’s policy framework, directors whose age exceeds 75 do not qualify to run for re-election, although they are not obligated to resign prior to that age. From a management point of view, apple can get the most out of its directors when they are still fairly young and innovative (Roney 2004). This is important for the company because the technology world changes very swiftly, hence the need for good leaders Evaluate The Effectiveness Of Leadership Within This Corporation And Make At Least One (1) Recommendation For Improvement. Apple is ostensibly the best run company in the world if their bottom line and the line of products are anything to go by. The company’s concept is manifested in its mission statement which has propelled the company to its current position as the most profitable company in the world, thanks to its innovative leadership. However, Apple’s success story does not negate the fact that they could do better in some aspects of the business. Apple adopts product driven approach towards innovation, development and manufacturing of its products. This philosophy was coined by Steve Jobs, who strongly believed in creating a product first, and convincing the customers why they need the products later (Roney 2004). This is obviously a different approach from its key rival Samsung Electronics which uses a market-driven approach to design products for their customers. Lately, the market has shown that a company’s focus should be driven by the market needs. My recommendation to Apple would be that they should, therefore, base their product development on market needs and use value to the end user rather than just focus on innovative features and user friendliness (Sadler 2003). The realization, for instance, that the market is increasingly opting for a larger phone screen, leading to a paradigm shift in the design of iPhone 6 is a good start for apple. Assess Efforts By This Corporation To Be A Responsible (Ethical) Corporate Citizen And Determine The Impact These Efforts (Or Lack Thereof) Have On The Company’s Bottom Line. Provide Specific Examples To Support Your Response Whereas Apple strives to foster and maintain high moral and ethical standards in its operations, the company has found itself situations that have dented both its image and bottom line. Most of these situations have arisen from legal suits of violation of labor laws across different merchant outlets in the world. For example, the company was directed to pay fines to the tune of €10,000 to a section of its employees in France for making them work overtime without pay according to AFP (hat tip to the Verge). This law suit and others like patent infringements accusations like the one leveled by VirnetX al in 2010 which saw apple narrowly survive a court order to pay $368 million in damages to Nevada-based firm when the appeals court overturned an earlier court decision (apple.com). This and other similar law suits continue to eat into the company’s profit margins while also damaging the company’s reputation. As a consequence Apple has to resort to its powerful PR machinery to conduct ‘damage control’ which is negative to the company’s bottom line. In conclusion, the Apple Corporation offers both positive examples to be emulated in strategic management while serving as a tale of caution in some instances. The company’s mission statement continues to propel it to greater heights even as challenges continue to pose along the way. References Badenhausen, K. (2014, Nov 5). Apple, Microsoft And Google Are Worlds Most Valuable Brands. Forbes Magazine. Retrieved From http://www.forbes.com/sites/chuckjones/2014/12/05/ubs-increases-apples-iphone-6-sales-revenue-and-eps/ Jones, G. & Hill, C. (2011). Essentials of Strategic Management. New York: Cengage Learning. Namee, Mc, P. (2007). Strategic Management for MBAs Black and White. Carlifonia: Lulu Publishers. Roney, C, W. (2004). Strategic Management Methodology: Generally Accepted Principles for Practitioners. Carlifonia: Greenwood Publishers. Sadler, P. (2003). Strategic Management. London: Kogan Page Publishers. Read More