Public Corporation Analysis: Apple Inc - Case Study Example

Public Corporation Analysis Public Corporation Analysis Introduction Apple Inc was founded by Steve Jobs, Ronald Wayne and Steve Wozniak in 1976 and has experience tremendous growth over the years to become the second largest company in the world in Information technology industry. The companys headquarters are based in Cupertino, California in the US. Apple Inc designs, and manufactures personal computers, computer hardware and software, and a wide range of other consumer electronics. As of 2013, the company’s annual; revenue stood at $ 170 billion dollars. The company is also the largest-traded public company in the world by market capitalization. The company is best known for its global brands such as the Mac computers, iPod, iPad, and the iPhone smart phone. This essay will analyze Apple Inc to determine how various aspects in the company contribute to its success. The essay will analyze the impact of Apple Inc’s vision and mission statements as well as conducting a SWOT and Five Forces Analyses of the company to assess the company’s strategic move in to the future. The essay will also analyze the effectiveness of company’s leadership and the company’s strategy with regard to ethic and corporate governance. Apple’s Vision, Mission Statements and Primary Stakeholders Apples success can be attributed to a lot of factors including its mission and vision statements and the contribution of the company’s primary stakeholders. Apples vision and mission statements are very instrumental in shaping the company’s organizational culture that steers the company to unprecedented success (Jolly, 2003). The company’s vision statement identifies the goals and objectives that the company intends to achieve in the future while the mission statement outlines key strategies used to achieve its desired goals. Primary stakeholders are the individuals who are directly affected by the company’s activities. These include the employees, suppliers and customers. All these groups of people contribute uniquely to the success of the company in their day-to-day interactions with the organization. Apple’s vision statement states that the company is committed to giving a unique personal experience to their clients all over the world by offering them highly innovative software, hardware and internet products. This vision indicates the future of the company and its desire to remain the best and most preferred company while maintaining high innovation (Rezaee, 2002). The vision is also a promise to both current and potential customer of the company that the Apple Inc will always give them the best and personalizes services and products. This vision statement contributes a lot to the overall success of the company in various ways. First, it sets out the quality standard that the company hopes to achieve. This drives the company’s employees towards maintaining high standards in their service delivery. The vision also has a huge impact on the company’s organizational culture. Apples Mission statement outlines key strategies for to drive the company towards achieving its vision. The company’s mission statement encapsulates a lot of information about the company. The statement outlines the company’s history, its future and its purpose. From this statement, one can easily determine how far the company has come and where it hopes to be in the near future. Apples mission statement states that it designs the best hardware and software products and other computing devices. This mission statement also has a big impact on the company’s overall success because it identifies the main purpose of the company for all key stakeholders in the company to aim at achieving. The company’s success cannot be achieved without the support and contribution of its primary stakeholders. These include employees, suppliers, management and customers. Apple boasts of a highly qualified workforce stationed all over the world. The employees contribute uniquely by offering their technical expertise in their respective departments to help the organization to realize its objectives (Jolly, 2003). The management, on the other hand is responsible for formulating policies and strategies that help the company maintain its position in the market. Customers also give their contribution to the company’s success by purchasing its products from time to time and remaining loyal to the company’s products. Five Forces Analysis of Apple Inc Five Forces model of analysis helps companies assess profitability of their respective industries in order to develop their competitive strategies to enter and dominate a specific market. The model focuses on analyzing five of the most important factors affecting an industry and profitability within specific markets (Rezaee, 2002). The five factors of analysis are threats of new entrants, threat of substitutes, bargaining power of suppliers, bargaining power of customers, and competition from rival companies (Porter, 2008). Apple Inc. operates within a highly competitive industry with other big established companies as well as many startups joining every now and then. Porter’s five forces of analysis model can be a very important framework of examining the industry to enable the company’s management to strategies for the future. A detailed analysis of Apple’s environment is as outlined below; New entrants in the market are likely to lead to reduced productivity, decrease in market share. The information technology industry is very lucrative and dynamic and is therefore bound to attract many new investors and emergence of other startup companies. Apple should beat off competition from new entrants by ensuring it has a large pool of loyal customers. Substitute products in the information technology or the electronic industry are mostly counterfeit products that resemble the original products of established companies. These products often go for low prices and can easily affect an established company’s profitability (Porter, 2008). Substitutes provide consumers with cheaper alternatives and can drive them away from costly original products offered by established companies such as Apple Inc. In order to beat off the threat of substitutes, Apple should offer highly quality products at affordable prices while also having different products targeting a different market segment depending on the segments financial status. Bargaining power of customers refers to the ability of buyers to put a company under pressure to change its pricing strategy (Porter, 2008). Buyers can threaten to shift competitors if the company does not change prices in their favor. Apple Inc can resolve this by providing customers with a lot of information regarding its products, offering reasonable prices, enforcing a customer loyalty plan and considering views of various consumer groups on pricing. Bargaining power of suppliers refers to the various sources of raw materials, labor, and components necessary for the firm to produce its products (Porter, 2008). This bargaining power is expressed in the suppliers’ willingness to cooperate with the company by charging high prices for their resources. In order to overcome this challenge, Apple Inc should locate its offices close to suppliers of key raw materials and establish a great working relationship with them. Intensity of competition resulting from rivals can put a firm under pressure to change its strategy or risk losing its position in the market. Apple’s main competitors are HP Company, Samsung Electronics Ltd and Microsoft. SWOT Analysis of Apple Inc A SWOT analysis is a model of analyzing a company’s strengths, weaknesses, opportunities and threats within a company’s internal and external environment (Jolly, 2003). Strengths and weaknesses assess a company’s internal environment while opportunities and threats analyze a company’s external environment. A SWOT analysis of Apple Inc is as outlined below; Apple Inc occupies a large market share in the electronics industry, a position that gives the company very many areas of strength over its competitors (Jolly, 2003). Among Apple’s main strengths include a huge base of loyal customers, unparalleled innovation in the industry, strong financial performance, a large network of retail stores across the globe, brand recognition and strong marketing teams with vast experience. These strengths are very fundamental in positioning the company as one of the industry’s leaders. Apple encounters some challenges in its operations because of different weakness in the company’s strategies and leadership. Among the weaknesses of Apple include high prices for the company’s products, most of the company’s products are incompatible with other types of operating Systems, recent changes in management, a decreasing market share, defects found in s0me of the company’s latest products and patent infringement. These weaknesses make it difficult for the company to realize its full potential. Apple has great opportunities that can catapult it to the greatest heights possible if all these opportunities are managed well. Some of the company’s opportunities include high demand for some of its innovative products like the iPhone 5 and the iPad mini, the growth of the smart phone industry, an increase in demand for cloud services, and the presence of new markets in Asia, Latin America and Africa. There are also threats that can make the company’s future doomed if its management does not consider these threats in formulation of strategies. Among the threats facing Apple Inc include rapid technological changes, increase in taxes, growth of Android OS and entrance of competitors in to the music industry. Strategy of the company based on the SWOT analysis Apple needs to focus all its attention on capitalizing on its strengths and opportunities while minimizing its weaknesses and threats. To do this the company needs to develop strategies to ensure that it remains strong despite encountering challenges. A good strategy involves bringing all stakeholders of the company on board and considering everybody’s views in formulating the company’s strategies. The company should aim at maintaining its customer base and reaching out to more customers by segmenting the market and customizing its products for different markets. This will ensure the company attracts many people and shakes off competition from substitutes while still offering high quality services and products. The company also needs to work with reputable suppliers and other partners who fully understand the company and its customers. This helps the business to maintain its brand in the industry and hold the needs of its consumers above everything else. Apple should maintain its innovation by employing highly qualified individuals who share in the company’s vision. Finally, the company should seek to enter new markets in order to maintain high profitability. Different levels ad types of strategies for Apple Inc Apple Inc can use three levels of strategies to strengthen itself. These are corporate, business unit and functional levels. Strategy development at the corporate level aims at identifying other business that the company should compete with, or those that the company should work with in order to maintain its position. This level is mainly concerned with formulating strategies to foster interrelationships with other businesses. The business unit level, on the other hand focuses on enacting strategies for promoting a particular product line in order to position it in the market above its competitors. The functional level aims at improving departments of a business and improving synergy between different departments for the overall improvement in the company’s operations. Communications Plan for Company The strategies identified above ought to be communicated effectively to all stakeholders in the company. A good communication plan discloses the audience, content and the media outlets through which the information will be shared. In order to communicate these strategies effectively, the company should use both a horizontal and vertical approach n order for the information to flow down from the management to the employees and let t6he employees also share the same information. The main forms of communication should be the internet via emails and telephone communications. The content of communication should be customized for each department and level of the organizational structure. This will ensure everybody receives only information that is relevant to them. Corporate Governance Mechanisms Corporate governance mechanisms refer to various controls aimed at reducing inefficiencies that may result from moral hazards that may put the company (Bowen, 2008). There are both internal and external mechanisms of control that companies can use to control managerial actions. Two of the strategies used by Apple Inc include having internal auditors to give assurance of the company’s policies and financial decisions (Bowen, 2008). These internal auditors work hand in hand with external auditors to ensure the company’s management work within the required moral framework. The other strategy used by Apple Inc is monitoring management action by the Board of Directors. The company’s board of directors has the responsibility to hire and fire managers and other employees whenever they depart from the ethical guidelines of the company. Effectiveness of Leadership within This Corporation Apple Inc has had its own share of leadership challenges in the recent past, especially after the death of Steve Jobs, its founder. After being in the company for the longest time possible and being a key leader, his death was a blow to the company and resulted in management challenges with leadership. The company has however, been picking itself up gradually and seems to be on the right track. In order to remain strong in terms of leadership, one recommendation for the company is to hire very experienced leaders with great knowledge of the company and its vision (Jeffrey & William, 2005). Individuals in leadership positions should have experience working in different positions in the firm before rising to the highest level possible. This will help the company to attain a level of passion and work rate similar to that experienced under the leadership of Steve Jobs (Jeffrey & William, 2005). Assessment of Apple’s efforts to be a responsible corporate citizen Apple Inc has put forward various strategies to ensure it remains an ethical corporate citizen. The firm achieves this by involving itself in different Corporate Social Responsibility programs such as supporting sports activities, music and helping to nurture talent in several other fields. The company is also involved in various social change initiatives through supporting environmental conservation by designing products and services that promote environment conservation (Bowen, 2008). References Bowen, W. G. (2008). The Board Book: An Insiders Guide for Directors and Trustees, W.W. Norton & Company, New York & London. Jeffrey S. Y., & William L. S. (2005), iCon Steve Jobs: The Greatest Second Act in the History of Business, Hoboken, NJ: John Wiley & Sons. Jolly, A. (2003). Managing Business Risk: A Practical Guide to Protecting Your Business. Page Limited. Porter, M.E. (2008). The Five Competitive Forces That Shape Strategy. Harvard: Harvard business Review. Rezaee, Z. (2002). Financial Statement Fraud. Hoboken, NJ: John Wiley & Sons. Read More