Individual Strategic Management at Apple Inc - Case Study Example

Strategic management is conceptualised as being about reaching and understanding of the organization and its situation in order make choices about its future direction (Robson, 1994). This mainly involves an understanding of three factors namely: the environment, values and objectives and resources. As such, this paper seeks to critically evaluate the operations of Apple Inc. using the above mentioned framework. The paper starts by outlining the company’s mission statement, stakeholders, external environment and this will be followed by a SWOT analysis of the company. The last part of the paper looks at one solid strategic management recommendation for the company. Section 1 “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 and it also offers iPhones and iPads” (Blodget, 2013). Its mission statement is: “We want to leave the world better than we found it.” The company is comprised of a variety of stakeholders and these are individuals or groups of people who have a stake in the operations of the company. The employees, suppliers, distributers as well as management of the company are the stakeholders who directly control its operations. The shareholders and consumers are also major stakeholders of the company since these contribute towards the revenue it generates from its operations. Ordinary people in the environment in which the company operates are also stakeholders since they are affected by its operations. The government and other regulatory bodies are also stakeholders for this organization. The external environment of the company can be analysed through the use of Porter’s five forces model which comprises of the following factors: barriers to entry by competitors, threat of substitute, bargaining powers of buyers, bargaining powers of suppliers and rivalry among the existing players (http://www.12manage.com/methods_porter_five_forces.html). Barriers to entry The mobile communication technology industry is capital intensive hence it may not be that easy for other new entrants to penetrate the market. This means that barriers to entry are high which cushions Apple in its operations. Substitutes There are various substitutes in the mobile communication market that can easily replace the products offered by the company. This poses challenges to the operations of the organization. Bargaining powers of buyers This mainly depends on the buyers’ ability to influence the price. Apple products have premium prices which mean that the customers have little influence to change them. The products offered by Apple are specifically meant for the rich and affluent people. Bargaining powers of suppliers The bargaining powers of suppliers depend on the strength of the suppliers to determine the prices for the raw materials used. Apple uses highly priced quality raw material to manufacture its products which hedges against its competitors. Rivalry among competitors Competition in this industry is intense since there are also a variety of actors in this industry. These offer personal computers, smart phones, tablets among others just like Apple. This poses a serious threat to its operations. Section Two According to Pearce & Robinson (2010), environmental analysis helps the company to identify the treats and opportunities that can help it to achieve its objectives while at the same time identifying the barriers. On the other hand, the company can harness on its strengths to direct strategy in the organization while putting measures in place to minimise the weakness. SWOT analysis for Apple is outlined below. Strengths Apple Inc is known for innovation and creativity in manufacturing its products It has a strong brand name It is responsibility to leave a small footprint It does not use harmful toxins in manufacturing its products Weaknesses Apple’s products are very expensive and this may scare away the customers Opportunities The major opportunity for the company is that it can keep pace with the technological changes taking place in the environment owing to its commitment to innovation and creativity. Threats The major threat facing the company is that competition is intense in this market. Customers can easily switch brands if they find the products offered by Apple exorbitant. From the analysis carried above, it can be noted that Apple has more strengths that any other factor. This is very important in as far as competitive advantage for the company is concerned. With such strengths, the company is in a better position to keep on improving its products and brand name and this helps it to be in a position to retain its old customers. This is also very important since the company is also presented with the opportunity to attract other new customers. Both old and new customers can significantly contribute towards the revenue generated by the organization. This can ensure its sustainability and viability in the long run. The weaknesses of the company can be transformed into strengths in order to help it to gain a competitive advantage. Competition is intense in this particular industry and this is the major threat to the viability of the company. However, with a good strategy in place, Apple can still gain a competitive advantage manage to retain its position in the market. Competition is good for the market since it helps the organizations to come up with effective strategies that cannot be imitated by the other rival competitors. The company is also presented with the opportunity of expanding the market to other untapped markets in order to increase its market share. The company’s presence in different markets is very important since this helps it to generate more revenue which in turn can help it to sustain its operations. This also helps to ensure the viability and profitability of the firm which is the essence of business. Section Three There are quite a lot of successful organizations across the globe that have effective strategies that are difficult to be imitated by other competitors and this is known as competitive advantage (Porter, 1985). Porter’s model of competitive advantage 1985 states that there are mainly two sources of competitive advantage which namely: cost advantage and differentiation. ‘Differentiation’ is when a firm seeks to be unique in the market by offering differentiated products while ‘cost advantage’ is situation where the firm seeks to be a low producer in the market while it strives to maintain quality. In this case, it is strongly recommended that Apple should pursue with its differentiation strategy. This strategy is justified because the company can offer unique products that cannot be imitated by other competitors. For example, products such as iPod, Mac Computer, iPad and iPhone among other array of products are unique and they have premium prices. Essentially, differentiation strategy helps the business to have sustainable advantages that enable it to provide the customers with something uniquely valuable to them. This is the case with Apple so this strategy is strongly recommended since it will continue to differentiate it from the other rival competitors. This gives it a competitive advantage. References Apple Inc. http://www.apple.com/ Blodget, H. (3 August, 2013). “Apples Mission Statement Is Making People Worry That The Company Has Gone To Hell”. Viewed from: http://www.businessinsider.com/apples-new-mission-statement-2013-8 Pearce, J.A & Robinson, R.B. (2010). Strategic Management. Planning for Domestic & Global Competition. 13th Edition. J. Porter, ME 1985, Competitive Advantage; Creating and Sustaining Superior Performance, The Free Press, New York: NY. Porter’s Five Forces Model 2012, viewed from, Robson, W. (1997) Strategic Management and Information Systems. 2nd Edition. London. Prentice Hall. Read More