Organization and Strategy of Apple Inc - Case Study Example

Organization and Strategy of Apple Inc By: Professor: Class: University: City: State: Date of submission: Organization and Strategy of Apple Inc The organizational and cultural environment of Apple The organizational culture of Apple is the main factor determining its success. The culture of the company plays important role in determining its capabilities to support the changes and new organizational policies and strategies. One of the factors contributing to the effectiveness of the company’s strategy is the developed and properly integrated employees within the institutional culture, which is responsible for facilitation of rapid innovation. The innovations at the company are observable through its high quality products such as iPhone, iPad, and Apple watches which dominate various parts of market niches (Arthur, 2012, 115). The organizational culture of the company not only contributes to its business strength, it also results in various challenges as it imposes the limits to the business. Through the years, the company has focused on fine-tuning its organizational culture to ensure that it matches the paradigms associated with business environment (Gamble, Thompson & Peteraf, 2013, 182). Moreover, the organization culture of Apple has adequate features of ensuring that it becomes the leading business within the global market. Nonetheless, these elements of organizational cultures also present numerous challenges in the optimization of human resources. The organizational culture of Apple is effective in supporting its leadership considering the key features fitting its business. It is important to note that each business has its requirements for the culture (Martin, 2009, 201). However, for the company, the features are moderate combativeness, innovation, top-notch excellence, secrecy, and creativity, which define organizational culture. Analysis of the business through moderate combativeness, the organizational culture is moderate. Such feature tends to link to the founder and the combative approach used for the company’s leadership. To such end, founder often challenge the workers randomly to posses the needed skills and knowledge to work within the company (Dudovskiy, 2015). Nonetheless, through the leadership of Tim Cook, Apple Inc. has been focusing on changing the organizational culture towards sociability rather than combativeness. The level of innovation of the company is high. Besides, it is considered “The King of Innovation” within the global electrical and electronics industry with every product dominating a given market niche. Consequently, all the employees are trained and encouraged on issues associated with innovation at personal levels based on performance and through their contribution of ideas to the product development process within the organization (Fox & Bloomberg News, 2013, 127). The organizational culture of the company thrives through facilitation of rapid innovation. Through its top-notch excellence, the business succeeds through embracing the policy that requires selection of only the best workers. The organizational management is known to fire rapidly the non-performing employees (Acuna & Sánchez-Segura, 2006, 142). Within the company, there is emphasis on excellence as a vital factor during designing and development of the product. Apple Inc. was developed through a culture that embraces secrecy. Moreover, secrecy within the company is important in minimizing the cases associated with theft of proprietary information and intellectual property. It is a policy within the company that after hiring of the employees, they agree with the organizational culture of secrecy (Meyer, 2015). These policies are reflected in the organizational employment contracts, policies, and rules. As a result, the Apple protects its operations from the negative espionage and negative effects associated with poaching of the employees. Competitive environment of Apple Inc Electrical and electronics is becoming highly competitive with consumer behaviours increasingly changing (Sheahan & Williamson, 2016, 143). With many businesses entering the industry, the business environment in which Apple Inc. operates becomes increasingly competitive which calls for adequate measures and strategies to curb the escalating competition and achieve the desired competitive advantage. Companies such as Samsung, LG, BlackBerry, and Nokia are currently focusing on manufacturing of products that compete strongly with Apple products. Moreover, new company are entering the markets with cheap and highly replicated products or clones to suit the suitability of the low-income markets (Ferguson, 2015). As a result, the electronic industry is highly competitive which makes it necessary for the company to develop effective strategies that it considers gainful for acquisition of competitive advantage. To deal with the new market entrants and competitors that introduce the latest products and services, Apple Inc. is focusing on competitive strategies and innovations that meet the specific needs of the consumers. Moreover, the company is focusing on enhancing its customer responsiveness, quality of the products, and efficiency. The efficiency of the product helps in lowering the cost. The external environment of the company is very effective which shows its high level of responsiveness in dealing with the changes that occur globally. Alternatively, Apple Inc. is adopting aggressive marketing strategies while developing its products such as notebooks, phones, and market segments, which it considers the core business practice (O’Regan, 2015, 27). Such market factors are important within the business as they assist in the identification of ways that could be effective for the organization for acquisition of competitive advantage. Globally, Apple is considered one of the most precious businesses. Based on the Porter’s Five Forces of analysis, the strategies used in Apple Inc. need to focus on addressing the forces within the external business environment. The strong forces result from competition and bargaining power of the consumers while bargaining power of the suppliers and threats of substitutions present weak forces. Additionally, threats of the new entrants present moderate forces. Companies such as BlackBerry, LG, and Samsung are very aggressive in competing with Apple. The aggressiveness of these companies is evident through rapid innovation, imitation, or production of powerful but cheap clones, and aggressiveness in advertisements (Wheelen & Hunger, 2007, 129). For the Apple products, the switching cost is low. Globally, Apple Inc. is known for quality products, which in turn makes the prices high. Low switching cost means that the customers find it easy to switch from the Apple to the other brands, which makes competition even stronger for the company. The bargaining power of the consumers is strong which affects the operations of the company. Such factor makes it easy for the customers to shift the brands, which makes them more powerful within the market and compelling the company to produce the products that meet their specific needs (Chen & Yao, 2013, 172). On the other hand, Apple experiences small purchase to each buyer compared to its total revenue. As a result, at personal levels, the customers are weak. Nonetheless, considering that it is easy to shift from the Apple products to the others, the buyers tend to exert stronger force. Organizational purpose and ethical decisions of the stakeholders In the 21st century, the stakeholders have continued to influence the business activities even as the community citizenship and social corporate responsibility is integrated consistently into the management of the business (Schneiders, 2011, 98). In Apple, the success has been due to its adequate integration of the stakeholders and corporate social responsibility in management and ability to satisfy their needs. Moreover, the stakeholders tend to influence the CSR, which in turn influence the performance of the business. Moreover, in Apple Inc., the stakeholders affect the business through the perceptions of the customers and sales revenue. With the high value of the company’s brand, Apple is effectively accounting for the stakeholders within the strategies and policies. Throughout the years, Apple has ensured that its employees and those it works with display appropriate conducts in every situation. Moreover, it bases it success on the innovation creation, high quality products and services, and adequate demonstration of integrity in each business interactions. To ensure that there is adequate integration of ethical issues within the company, Apple Inc. developed ethical practices that contributes to integrity: compliance, confidentiality, honesty, and respect. Moreover, for thorough details of these principles, the business managed to draft its code of business conducts application to all its operations including those in other countries (O'Grady, 2009, 133). Most of the Apple products and components are manufactured within the countries with low labour costs. There is high level of potential misconduct within the organization due to differences in the labour standards and less direct oversight activities. Consequently, all the stakeholders of the company including the suppliers signs “Supplier Code of Conduct” and performs audits for various processes to ensure adequate compliance. In Apple Inc., the most significant stakeholders include customers, investors, suppliers, and consumers (Budnikas, 2011, 107). Apple prioritizes the needs of its consumers considering that it tops among the stakeholders while developing its CSR. The major interest of the employees is to have effective and efficient products that meet their specific demands and needs at considerably reasonable prices. However, the company use premium pricing strategy, which is acceptable considering that it, matches the quality of and aesthetic value of the customers. Furthermore, Apple Inc. has environmental programs for recycling and responsible sourcing of addressing the demands of the customers and ensuring sustainability of the business. The employees are also prioritized within the business (University of New Mexico, 2011). The main interests of the employees include proper compensation and career development. The employees are important in ensuring the ensuring the achievement of organization objectives and determination of the company’s human resources capabilities associated with innovation and development of profitable products that meets the needs of the customers (Bloomberg News, 2012, 142). The major stakeholders of the company are investors. Besides, they also determine the CSR programs of the business. In the case of Apple, the investors are interested in the maximization of return on investments (ROI). Through its excellent financial performance, the company addresses the needs of its stakeholders effectively. Disruptive trends in electronics industry that could affect Apple’s purpose With the capitalization of market of $559 billion, Apple enjoys being the most valuable company globally. However, such benefits do not mean it is not destroyable especially with the current trend within the industry. The current unstable global economy could get worse and affect the operations of the company negatively. Apple manufactures products considered globally as brand, which reflects their high prices. With continued sovereign foreign debts, financial volatility of the market, increasing unemployment rates, reduced consumer spending, the company could experience reduced profitability (Carlson, 2012). In addition, with the current market trends, potential customers are resorting to cheap phone. The industry is becoming highly profitable and attracting many investors. Furthermore, to diversify their operations and increase the customer base, various competitors are focusing on manufacturing products similar to those of Apple products; considering that they properly established brands like the company, they make competition even stiffer. Tough economic times are forcing the consumers to buy cheap and clone gadgets from the major competitors (National Research Council, 2005, 162). Apple Inc. tends to spend much of its resources, both human and financial, for designing and developing the products that considers meeting the needs of the customers. These programs include hardware, operating systems, and software applications, which are at the centre of technology. With increased technological advancement and technical expertise among the consumers, the company is force to develop differentiation programs to protect its customers. For example, with the advent of technology, there have been increased malicious programs, the number of hacking activities, and development in the operating systems. As a result, the company is forced to channel many resources in its research and development (R&D) department to ensure effective and efficient development of products that meet the specific needs of the customers (Sampere, 2016). However, most of the company’s competitors skip the costs associated with these activities through emulating the products of the company, which infringes its intellectual property. Besides, these companies charge these products lower prices, which affect the profitability and performance of the business. With increasing need of every company to define its brand, some manufacturers seek partnership with the company’s suppliers. Currently, the suppliers of the do have much of the competitors; as a result, they could start overcharging their products and services. Since the company obtains various components from single or limited sources, the sudden decision of the suppliers to charge Apple Inc. more for their products and services might affect negatively the company, as it would not have choice but to comply (Edson, 2012, 144). Establishing business entities with an aim of competing with firms such Apple often require high level of capitalization. Moreover, there is also need for developing strong brands, which is costly. However, there are large firms with huge financial base that have negative impact on the business. Considering the operational scope of Apple Inc., it is exposed to numerous political challenges especially in Asia. For many years, the Asian continent has experienced political unrest; therefore, any further political insurgence would put the company in danger. References Acuna, S. T., & Sánchez-Segura, M. I. (2006). New trends in software process modeling. Hackensack, NJ: World Scientific Pub. Co. Arthur, C. (2012). Digital wars: Apple, Google, Microsoft and the battle for the Internet. London: Kogan Page. Bloomberg News (Firm). (2012). Will Apple vs. Samsung alter the future of tablets? New York: Bloomberg. Budnikas, A. (2011). Apple Inc. Business Policy v. Competition Law. SSRN Electronic Journal, 4(5), 103-115. Carlson, N. (2012, November 1). 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