Challenges Faced by the Apple Company - Case Study Example

Apple Computer Company The evolution of the Apple Computer was one of the most notable in the history of the computer industry. Since itwas incorporated in January 3, 1977, Apple Computer proved to be one of the forces to reckon with. The success of the Apple II computer established the company as one of the key players in the personal computer industry. The company has undergone several changes in the past years. Since the success of the Apple II, the company has gone from a roaring success to almost bankrupt when some of its products like the Apple III, the Liza and the earlier versions of the Mackintosh did not really quite made it well in the market. Major Changes of The Company in 2007 Perhaps the biggest change that the company undertook this 2007 is the dropping of the word computer from its corporate name. By dropping the word computer name, Apple, Inc. is firming claiming its place in the electronics industry to become a media convergence company. The announcement of the change of name of the company was done right after they announced the launching of their new products the Apple TV and the Apple iphone. Technically, the announcement of the change of name is very symbolic on the part of the people behind Apple Inc. Another very significant move on the part of Apple is that it is partnering solely with Cigular for its iphone products. The iphone offers a squad-band GSM support and is specifically designed to fit into the Cigular Wireless LLC’s data network and at the same time provide seamless connection to internet access. Another notable development in the company in 2007 is its aggressive expansion of its Apple Stores which have reached around 180 establishments as of April 2007. Note that the Apple Stores were opened in 2001 to promote the products of the company. Apple stores are now located in the United States, Japan, United Kingdom, Canada and Italy. Challenges faced by the company One of the major challenges that the company has to face in 2007 will be change it is organizational set up and its brand positioning in the market. The marketing of the iphone could pose a formidable challenge considering that Apple Inc. is partnering solely with Cigular Wireless. Having Cigular Wirelss as it sole partner in selling the iphone, it effective narrowed down its market to the subscribers of Cigular Wireless. Since most subscribers of Cigular Wireless already have their own phone and have signed contracts with the company on the use of their existing phones, switching to the iphone may not be very easy. Another thing is that the price of the iphone is rather high compared to other phones. Analysis of Changes The changes instituted by Apple’s Steve Jobs had catapulted the company back on the right track. The transformation of Apple was all encompassing and integrative. The strategy of Job is to diversify the products of the company and reach out to a wider clientele. The campaign for diversification started when the company engaged in the production of the PDAs and other electronic media gadgets. On the other hand, by setting up the Apple Stores, the company is able to aggressively promote its products worldwide. In the areas of technology development, when Apple switched from solely being a computer company to a producer of convergence multi-media, Apple integrated their computer software to its other products. A good example of this integration is the Apple TV which streamlines data from the Apple computer to the Apple TV. Note that when it comes to change management, integration of the things that worked in the past into new innovations is very important to achieve continuity. On the other hand, complete change can only be achieved if the company makes a clear shift in its direction. The dropping of the word computer from the company’s name is one of best ways to guide the thinking of the public that Apple Inc. is now into other forms of technology. Since the public is already prepared for the change in the product line of the company, it will be easier for the public to accept the new products from Apple, Inc. Another characteristic of good change management is that the change must happen fast and must have the full commitment and buy-in by the people inside the organization. In the case of Apple Inc, Steve Jobs was able to rally the people of Apple Inc. behind him. In fact, according to the company’s financial statement for the second fiscal quarter ended march 31, 2007, company earned revenue of $5.26 billion with net income of $770 million. This means that the earning per share of the company has increased to 87cents compared to its previous value of 47cents1. So far, this is the most profitable quarter in the company’s history2. The secret behind the success of Steve job as the CEO of Apple is that he knows the computer industry inside out. His knowledge gives him an edge when it comes to dealing with the engineers of the company. Although the people who run Apple before him were well respected as leaders, they did not really have the intimate knowledge of the technology thus they could not really relate to what is exactly happening in the production area. On the other hand, since Job knows what the company is capable of doing in terms of technology, it becomes easier for him to institute changes that overhaul the company and institute changes that will bring the company to the forefront of the competition. Singapore Airline Singapore Airline was first incorporated as the Malayan Airways Limited (MAL) in October 12, 1937. Singapore Airlines experienced rapid growth in the 70’s. From the time Singapore Airline came into the airline industry in 1972, the company has been known as been known as a trendsetter and have attained consistent profitability. This company has received a five star rating from Skytrax3. Brand promotion is one of the main reasons behind the success of Singapore Airlines. The Singapore girl campaign which had been the iconic symbol of the company for the last 30 years has been very successful in promoting the company. Singapore airline is one of the first in the airline industry to introduce new concepts like the hot meals on board the plane. It also provided a uniquely Asian ambiance inside the plane. In the areas of technology, Singapore Airline maintains one of the newest aircrafts in the industry. To support the operations of the company, Singapore Airlines diversified into ground handling, air catering, aviation engineering and travel tour catering. Silkair, the wholly owned subsidiary of the company caters to regional flights to cities with smaller traffic of passengers especially in those areas like China, Southeast Asia and India. On the other hand, the company took 40% share of Tiger Airways in response to the call for affordable airfares. Tiger Airways, together with SilkAir and Singapore Air Cargo now ranks among the top 15 carriers all over the world in terms of revenue4. Changes and obstacles There are two major changes that Singapore Airlines underwent during the early part of 2007. First, the company it changes the advertising company that has been handling the promotions of the company for more than 30 years. As of April 16, 2007, the New York based TBWA will replace Batey Ads in running the advertising campaigns for the company. Note that Batey Ads was behind the very successful Singapore Girl campaign which represented the company for the last 30 years. With the change in advertising company, there may be a change in the image of the Singapore Girl. Another notable change in the Singapore Airline for this year 2007 is the fact that it is forging alliance with China Eastern Airlines Corporation, a company which is currently losing money. The alliance between China Eastern Airlines Corporation is strategic since China is one of the most highly populated areas in the world. However, since China Eastern Airlines Corporation is an ailing company, Singapore Airlines may not really be able to recover much of its investments for a long period of time. Analysis of Change All through the years, Singapore Airlines has used the great advantage of its brand in maintaining its profitability. In managing the changes in the company, the leaders of the company have adopted a simple and easy to follow formula. In generating revenue, the company consistently avoided the reactionary pricing behavior. During the times when prices are volatile, unlike other airline companies, Singapore Airline does not succumb to price increases without prior notice to the public. When it comes to cost controls, the company achieves maximum efficiency implementing const control measures such as hedging against possible increases in the prices of fuel and maintaining new and cost efficient aircrafts. In responding to the changing demands of the market, the company responds by expanding its operations through acquisition of shares in other airline companies. By acquiring shares of already established companies, Singapore Airlines assumes smaller risk as compared to putting up its own fleet to serve other areas. Presumably, the move of the company to acquire shares of China Eastern Airlines Corporation is a strategy to expand its operations and get a share in the market of airline commuters from China. When it comes to running the company, Singapore Airline has always been true to its brand. Consistency is one of the primary assets of the company for more than 30 years. Changes in the company had never really been fast nor had these changes been all encompassing. In managing changes the leaders of the company have always adopted a more conservative outlook and favors consistency and reliability over a more dynamic image that other airline companies are always building. Note that while other airline companies have been hyping on modernization in their aircraft and their services, Singapore Airline have consistently relied on the Singapore Girl image of Asian hospitality and comfort to keep the company going. However, since company is facing some major changes in its brand campaign, it remains to be seen as to how the company will handle the changes on the Singapore Girl image. Although the company clearly stated that it will not completely give up the Singapore Girl campaign, the company will most probably institute some major changes in the way the advertising and promotions of the company will be handled. References: 1. History of Apple Computer http://www.fundinguniverse.com/company-histories/Apple-Computer-Inc-Company-History.html 2. Saving the Apple from the Brink of Death http://web.syr.edu/~bwlee/projects/ist755/saving_apple.html#_ftn5 3. Singapore Airline – An Excellent Asian Brand http://www.venturerepublic.com/resources/Singapore_Airlines_-_An_Excellent_Asian_Brand.asp 4. Singapore Airline http://en.wikipedia.org/wiki/Singapore_Airlines#_note-22 5. Singapore Airlines http://www.industryweek.com/research/iw50best/2007/iw50BestCompany.asp?Input=53 6. Why Apple Dropped Computer From Its Corporate Name and Teamed Up with Cigular on iPhone http://www.computerworld.com/action/article.do?command=viewArticleBasic&articleId=9007718&source=Quigohttp%3A%2F%2Fwww.computerworld.com%2Faction%2Farticle.do%3Fcommand%3DviewArticleBasic%26articleId%3D9007718 Read More