Strategic Management in the Path to Achieving Success of Apple - Essay Example

Apple Apple Introduction Apple Inc. is an American multinational that is headquartered in California, USA. The companymajors on designing, developing and selling electronic consumer products, online services, software for computers and personal computers. Apple began in 1976 Steve Jobs, Steve Wozniak with an aim of developing and selling personal computers.1 It has since diversified and grown to other areas of success. 1. Perform a SWOT analysis for Apple. You might contrast this with Amazon, Google, and Microsoft. Considering the internal and external environment for the firms indicated above, develop alternatives for how Apple can adapt to increased competition. Under the leadership of Steve Jobs, Apple underwent a period of tremendous innovation that led to the launch of category-defining products for example the iPod, iPad and iPhone. Apple also launched ITunes online store, Apple retail store to complement the electronics. Apple rides on its strengths to acquire and maintain a competitive advantage in a fast growing market that is extremely competitive.2 On the other hand, the increased competition can have ripple effects on the growth and success of the company. Strengths Apple has gained a strong market position due to the ‘Apple Eco-system’. The company has a wide range of applications, software and such interrelated products that support each other. The newly released products especially the iTV keep expanding Apple’s eco-system. The company therefore continues to enjoy customers’ trust therefore enjoys a competitive advantage over its competition. Brand awareness is also increased by the high quality customer experience at the Apple retail stores since the staff is always well informed with direct contact with the customers. The stores enjoy maximum profits from direct sales. Apple also has a strong marketing strategy. It employs a strong team of marketers and advertisers who ensure that pricier products are sold and build superior stores that are meant to achieve marketing goals while advertising the products in a compelling way. This advertising trend was started in 1984 when Apple produced a commercial that became famous for a long time which was broadcast during the Super bowl that year.3 Apple unlike Microsoft creates its own hardware and as such, it does not have to depend on other companies to create products that run on its operating system. Apple offers a variety of products that make profits. It is diversified and does not rely on one sole product to make sales unlike Google which majorly relies upon advertising to bring in profits. Weaknesses The price of Apple’s products is higher than that of the competitors. Critics have in the past posited that the prices are not reasonable compared to the products. The pricy products can easily make the customers to opt for cheaper brands.4 Apple’s operating system, iOS lacks compatibility with other operating systems unlike the software Microsoft uses that is compatible with several OS. This may lead to customers opting to go for Microsoft. Apple has also had cases of patent infringements which may damage its reputation. A change in management, since the death of Steve Jobs has also been taken as a weakness for the brand. Team cook who was the senior vice president since 1998 replaced Jobs since 2011 after he resigned. The company’s competitive advantage under Steve Jobs was the ability to bring out innovations which may not be sustainable without him.5 Apple’s new products have had faults and this may impact greatly on the level of trust of the customers. Opportunities There is high demand for apples products especially to the young tech savvy generation who use iPads and iPhones. This continues to increase the company’s market share. The launch of iTV has also contributed to the expansion of the ecosystem. Apple’s main competition, Samsung is the only provider for Apple’s products application processors. Apple may therefore seize the opportunity of being less dependent on its direct competitors. As the market for smart phones and tablets continues to grow, it serves as a good opportunity for Apple to take advantage of the increasing need to close that gap. More production will lead to increased profits. Apples products and patent have in the past been infringed and therefore may seize this opportunity to discredit their competitors and increase sales. Threats The increase in tax rates in the US is likely to make the price of products go even higher. Rapid growth in technology poses as the major threat as the company is forced to innovate new products at a very fast rate. The need to keep up with the competition may have negative effects. Apple is being asked to pay more for key components by Samsung such as the application processes. The growth of the Android operating system also poses as a great threat to the future of Apple as more people are drawn to it. Alternative for how Apple can adapt to increased competition Apple can focus on alternative methods that are likely to assist in adapting to increased competition. Apple should not only focus on their old competitors but also the new mavericks that are entering the market with new innovation and new technologies.6 This will neutralize competition from its core. They should also be keen to observe what is happening with the other similar companies, especially the threats as this may also be replicated in their own background. Apple should examine risks and identify uncertainties that could significantly affect the company. It would be crucial to identify the false knowns and the underexploited knowns. Every uncertainty should be addressed with an initiative. Apple should examine multiple alternatives to legitimize and foster cognitive diversity and the flexibility of the organization. Apple is in a fast moving environment and as such it needs to accelerate change by a way of letting the processes of planning to be lighter and rather frequent. This way Apple will be able to adapt in a dynamic environment. Apple should also make customer satisfaction their number one priority by first listening to their needs. 2. Summarize Apple’s product segments, and suggest where it can pursue continued growth Apple’s market segmentation allows it to capture high margins from those who adopt early driving penetration to the price conscious individuals later. An example of this is evident with the launch of the iPhone making it reduce the price of the 3G version. With the launch of the iPad, it reduced the price of the iPhone significantly. In so doing, Apple came up with a market for more customer segments. The company subdivides the large homogeneous market in to segments for people having similar needs through product differentiation. Apple has launched iPod, the iPhone, iPad and the apple TV to cater for the needs of various customers with of different social classes. The company bases its segmentation according to the behavior of the customers, for example, the iPhone was launched to cater for the more sophisticated customers and was at first sold at a higher price, but the price continues to go down they launch more sophisticated as they launch more sophisticated versions of the iPhone.7 Those who could not afford the iPhone five can now acquire it at subsidized rates since there are more pricy versions of iPhone. Steve Jobs had to convince people that besides their laptops and iPhones, they needed another gadget that could perform the functions of a laptop and the iPhone, but better equipped to do so. In 2011, Apple launched the second version of the iPad to cater for those who had been disappointed by the lack of a camera in the iPad one. This was expected to facilitate video functions such as online chatting.8 For Apple to pursue continued growth the concentration should be on smart phones and iPads as there is a growing demand to catch up with the latest technology by the tech savvy individuals. More versions of both should be launched which are in tandem with the latest technology that will allow the users to enjoy such advantages. 3. What does Apple’s selection of Tim Cook as Steve Job’s successor signal about the company’s future strategy Tim Cook took over Apple with the recommendation of Steve Jobs who resigned in 2011. First, that is a sign that Jobs trusted in the capability of Cook to lead the company to greater heights. Jobs selected a successor who is not afraid of doing things differently. In his short stint as the leader of Apple, Cook he has led Apple to a path of achieving greater success now and in the future. There is a change in the future strategy of Apple as he has introduced a different direction for the company and its culture. Cook has instituted generous charitable contribution programs, he has engaged more with investors and has gone ahead to publish audits of its international plants that are detailed.9 This shows transparency which will attract more investors as well as earn trust among the customers. Cook as compared to Jobs, Tim cook is said to possess a more relaxed and approachable personality which could be a representative of the future of apple as more people are attracted by the culture and superior products at reasonable prices. Cook is expected to use research and development to open more stores, make new acquisitions and strategize on expenditures in the supply chain. 4. Identify the challenges that Tim Cook faces and how he should address them. Despite the competitive advantage that Apple has created through product differentiation, brand loyalty and other integrated services, Cook will not have it easy as competition is rife.10 Tim Cook needs not to focus on short term success only but long term success as well. Apple under Cook faces technological challenges as they are forced to adapt to the latest technology to beat the competition. There is also a leadership challenge as cook is constantly being compared to Steve Jobs. His leadership and business approach is different from that of Jobs and as such he receives criticism and praise in equal measure. Finally, Apple just like any other company faces an imminent economic down turn especially at times of recession where many people will opt to forego fancy products to cut on costs. Tim Cook should focus on knowing and understanding customers’ needs and the market as well. Consumers are the foundation to the success of the company. Offering the customers superior products at lower prices will serve as a competitive advantage the company.11 Apple will need strategic development and management which will make it difficult for the competitors to outdo them. To address the technological challenges, Apple will need fresh and innovative minds to allow creation of new designs for products to compete fairly with others. New designs attract customers and investors. The workers need training as they become decision makers and appreciate the role of leadership more. Economic challenges are a global matter of great concern but with proper management of resources and finances, Apple will be able to beat the economic challenge.12 This way the company is able to overcome recession challenges. Conclusion Apple inc. challenges are interlinked and as such, solving one will mean solving another. Strategic management is crucial to the long term survival and success of the company. Tim Cook seems to be in the right path to achieving success of Apple. Works Cited: Rothaermel, Frank. Apple (in 2013): How to Sustain a competitive advantage?. Mc Graw Hill. Print Gillam, Scott. Steve Jobs: Apple Icon. Minneapolic, MN: ABDO Pub. Co, 2012. Print http://www.worldcat.org/title/steve-jobs-apple-icon/oclc/775599716 Gopinath, C, and Julie Siciliano. Strategize!: Experiential Exercises in Strategic Management. , 2014. Print. http://www.worldcat.org/title/strategize-experiential- exercises-for-strategic-management/oclc/809031556 Read More