How Apple Can Gain Competitive Advantages through Leveraging Its Internal Resources and Competences - Case Study Example

HOW APPLE CAN GAIN COMPETITIVE ADVANTAGES THROUGH LEVERAGING ITS INTERNAL RESOURCES AND COMPETENCES Date Strategic management Organizations are established with an aim meetings its set goals and objectives and remaining relevant for the long haul. Organizational owners and managers have to use strategic approaches that ensure that intended goals and objectives are effectively met at their minimal costs. In order to do this, strategic management approaches have always been adopted (Enz, 2010, p.109). Business managers should have an understanding that strategic management has to comprise of formulating as well as implementing of major goals and inventiveness taken by a company’s top management on behalf of their particular owners. In addition, it is based on deliberation of resources and an effective and efficient appraisal of internal and external environments in which the organization is competing. One of the most important features of strategic management is that it provides overall direction to the enterprise, in addition, it also involves specifying the organization’s objectives, developing policies and plans designed to achieve these objectives, after which it allocates resources to implement the plans. In modern times, academics and practicing managers have been instrumental in developing numerous models and frameworks that are significant in establishing strategic decisions in the context of complex environments and competitive dynamics (Eriksson & Kovalainen, 2008, p.254). It is under strategic management that strategies are deliberated upon and a successful coordination criterion established so that an organisation competes effectively besides meetings its objectives in the competitive business environment. Definition. According to Wheelen & Hungers 2006, “strategic management is a set of managerial decisions and actions that determines the long-term performance of a corporation.” (p.3). They emphasize the analyzing and evaluating of external opportunities and threats in terms of an organization’s strengths and weaknesses (Wheelen & Hunger, 2006, p.3). Strategic management can also be described as a continuous process that evaluates and controls the business as well as particular industries that they exist, the process provides a perfect assessment of its competitors thus setting goals and strategies to improve organizational performance. At the same time, strategic management makes a regular reassessment of strategies and approaches in the process of determining their effectiveness and reliability, this way, it is easier to replace those that are ineffective and devise new ones. This is because, in the business environment, there will always be a new approaches to meet changed circumstances, new technology, new competitors, a new economic environment, or a new social, financial, or political environment (Fred, 2011, p.78). This follows the understanding that the business environment is dynamic and has to be continuously studied and adapted to where necessary. Successful businesses are those that are able to make a continuous analysis of their internal as well as external business environment and take necessary steps towards boosting a company’s efficiency and effectiveness in its operations. A company can affect the effectiveness of its internal business environment in several ways. Conducting a SWOT analysis plays an important role in ensuring that a company identifies its strengths and weaknesses as well as any opportunities and potential threats in the course of its operations. The external environment also has to take the same process, it has to be carefully scanned so that any developing changes in competition strategies, legal environment as well as other important dimensions can be well understood and countered. All the strategies and approaches adopted in strategic should aim at giving the company competitive advantages in its environment, this is the only way to tell the effectiveness and success of the process. Competitive Advantage For many decades, strategic managers and researchers have long been interested in understanding and finding various sources of competitive advantage for firms. From a tradition point of view, this effort has tended to focus on the relationship between a firms environmental opportunities and threats on one hand, and its internal strengths and weaknesses on the other (Grant, 2005, p.69). This long-serving relationship is better summarized in what is commonly referred to as the SWOT analysis. In this traditional approach, firms that effectively employ their internal strengths in exploiting environmental prospects and counteracting environmental pressures are in a better position to gain competitive advantages than those other firms. The SWOT analysis is very instrumental in giving the business success in the development of strategies aimed at making it successful, the approach points to the importance of both external and internal phenomena in understanding the sources of competitive advantages to firms (Hitt, Ireland & Hoskisson, 2009, p.122). Apple Inc. Headquartered in Cupertino, California, Apple is an American multinational corporation that specializes in designing, developing and selling of various consumer electronics including computer software, online services as well as personal computers (Bray, 2007, p.98). Among its most common products is the Mac line of computers that has been a preference for most consumers on retail and wholesale platforms. Three people founded the company; Steve Jobs, Steve Wozniak in 1976, at the time of its formation, their main objective was to make and sell personal computers. Later the company was incorporated as Apple Computer in order to reflect its shifted focus towards development and selling of consumer electronics (Jinjin, 2013, p.95). In terms of revenue, Apple Company comes second largest in terms of information technology, coming after Samsung, an Electronics Company that manufactures and sells phones and computers as well as related technologies. In Omnicom Group’s ‘Bets Global Brands’ report, Apple was ranked second, surpassing coca cola as the most valuable brand, however, despite of this huge development, the company has received a lot of negative criticism for its contractors labor practices, as well as for its own environmental and business practices. Apple Company’s business environment In any business, an environment refers to those forces or factors that affect routine business decisions and operations. It is important for businesses to analyse those forces in order to come up with problem solving solutions that can tackle arising challenges in the daily life of the business. Some of those forces are out of business control, these are factors that make up the external business environment, for instance, political, social, economic among others. The environment that businesses have or can hold is called the internal environment and comprises of human resources, finances, tools, equipment and technology At apple, the company has been able to achieve tremendous growth though a skillful analysis and understanding reliable approaches in its internal and external environment. The company has managed to make good use of its human resources, who have devoted their efforts in ensuring that the company achieves its highest levels of excellence in terms of product design, customers services and concern for competitive strategies. Internal resources at Apple Inc. Since its inception, Apple has relied on its internal resources that have helped it establish itself as a household brand name in many parts of the world. A good understanding and utilization of the internal environment has and continues to give the company a cutting edge in the market, some of the company’s strong points have been discussed comprehensively below. Resources and Capabilities From its inception, the company has managed to begin and remain top in terms of product and service development and delivery as a result of a strong tangible resource base. After making its products, the company was able to sell them through distributors and retail stores; the use of distributor outlets was prompted by the need for offering customers the products they needed at their nearest convenience, something that many of its competitors had not effectively exploited. Right from its development, human resources at Apple had and continue to exhibit a positive culture, the employees are always happy and have firm belief and trust in the company’s products (Sahoo, 2012, p.45). The company’s strategic management approaches have made it possible for workers to enjoy an appreciative work environment with many teamwork efforts. There is always continuous training on new products being designed so that markets and other workers can be able to explain out to clients and handle some of the technical questions and challenges raised by their consumers. The corporate organisation spirit that is characteristic of the company makes it easy for the company’s human resources to be successful and reliable in service delivery. Intangible resources Currently, Apple is being considered as one of the most innovative companies in the world, this is a result of the great demand that continues to increase for its products, an indication of customers’ confidence in the company. From its beginning, the company had an objective of looking for ways to change the world and bring new technology to the forefront; this is something that they have been able to achieve overwhelmingly. So far, the company has a good reputation for quality products and services in all its physical retail and online stores. Apple’s ethics are not questioned and they are a major player in technology world, making it stand out in a field of their own. They have been extremely flexible, especially when making their products compatible with a windows operating system. The company’s reputation has made it attract state of the art expertise that continues to give the company a competitive advantage when it comes to product design and development and articulation of customers’ queries. Other important aspects of the company’s internal resources that continue to revolutionize the company include its brand. Since its creation, strategic management approaches have Apple establish its brand name beyond the reach of other competitors; this has often been achieved through quality and introduction of new products that suits consumers’ preferences. In general, having a good brand name implies increases sales and profitability for any business organizations (Mallin & Finkle, 2011, p.46). Being rational, many consumers want to identify themselves with a certain brand more than their knowledge and awareness of particular products, in this case, companies that have renowned brand names experiences higher sales for new products that their consumers have even never tried before. Research and development is one of those key elements of an effective internal business environment, through it companies are better placed to understand the changing customer preferences, pricing and other important aspects relating to the dynamic business environment. Apple is credited for having an effective research and development system, through it, it has managed to established new technologies that in tandem with customer needs. The company has managed come up with various technologies that suit individual as well as organizational needs across different industries. Besides having excellent internal resources, successful companies are also known to have certain core competencies that play a central role in establishing competitive advantages. Core competencies are usually evident in various company aspects like expertise, resources as well as policies that work to the advantage of the company. Core Competencies at Apple At Apple, there are various core competencies that have been responsible for the success of the company’s products. Research and development projects at the company have led to the design of various technologies that the company sells (Elmer, 2009, para 3). Apple developers can be described as thinking differently; they have always managed to bring about new products persistently into the market. The products designed by Apple are said to be heavy on the pocket, however, their quality has always been unmatched in the market. Their brand name that has taken time to develop has ensured that many customers prefer their products at large. The developers at Apple have made good use of the differentiation strategy in designing their products; this strategy is known to produce features that have unique characteristics. This is a feature that many consumers have used to describe products and services that are designed by Apple Inc. Another advantage of the differentiation strategy as part of Apple’s core competency is that it leads to production of superior quality products that command premium prices (Bryan, 2012, para 1-2). In addition, they have excellent customer service with a rapid innovation of new technologies. Most people who prefer to use Apple’s products and services do so for prestige purposes. Conclusion The ability of a firm to analyse effectively its internal environment is one particular resource that can be used to improve the quality of products and service delivery. Core competencies in any company are responsible for creating and sustaining competitive advantages for any company that creates and adopts them (Chathoth & Olsen, 2007, p.509). The products that are designed by such a company have a high value, which is measured by the particular product’s characteristics as well as attributes for which customers are willing and able to pay. It is important to note that in strategic management, strategic decisions are non-routine, and with ethical implications, this way, the competencies are able to influence an organization’s above average returns (Purdy, 2009, para 3). This has been the case with Apple, which has grown and continues to expand, establishing retail and distribution stores in various parts of the globe. The use of SWOT analysis and other tools in the analysis of the internal business environment has been instrumental in determining specific steps and strategies to implement in order to get competitive advantages. It is for this reason that Apple Company continues to stay put by inventions and innovations of technologies for individual and industrial use. Bibliography Bray, H. 2007, Personal computers still at Apples business core, Cengage Publishing, Washington. Bryan C. 2012. Apple posts profits of US$45 million, US$7 million profit before non-recurring costs, Macobserver. Viewed 26 June 2014. . Chathoth, P. K. & Olsen, M. D. 2007. "The effect of environment risk, corporate strategy, and capital structure on firm performance: an empirical investigation of restaurant firms", International Journal of Hospitality management, Vol. 26 No. 3, pp. 502-16 Elmer, P. 2009. How Apple Sliced Its Pie in 2009. Viewed 26 June 2014 Enz, C. A. 2010. Hospitality Strategic Management, Concepts and Cases. Wiley, Hoboken, NJ Eriksson, P & Kovalainen, A. 2008. Qualitative methods in Business research. SAGE Publications Ltd, London. Fred, R. D. 2011. Strategic management: Concepts and case. Pearson Education, Inc. 56 Prentice Hall. New Jersey. Grant. R. M. 2005. Contemporary Strategic Analysis. Blackwell Publishing, Boston, MA. Hitt, M. A., Ireland, R. D. & Hoskisson, R. E. 2009. Strategic Management: Competitiveness and Globalization, Concepts and Cases, South-Western College Publishing, Mason, OH. Jinjin, T. 2013. "Strategic Analysis of Apple Computer Inc. & Recommendations for the Future Direction,” Management Science and Engineering, Vol. 7, No. 2, pp. 94-103. Mallin, M. L. & Finkle, T. A. 2011. Apple Inc.: Product Portfolio Analysis, Jordan Whitney Enterprises, Inc, Arden. Purdy, J. 2009. 2010 Outlook and Forecast: Mobile and Wireless Communications. Viewed 26 June 2014 Sahoo, D. 2012. "Strategic Change of Campaign at Apple Inc,” Vidwat, Vol. 5, No. 2, pp. 38-48. Wheelen T. L & Hunger D. J. 2006. Concepts in Strategic Management and Business Policy. Pearson Education, Inc, New Jersey Read More