Apple - Looking Inside for Competitive Advantage - Report Example

Background

The computer technology industry has grown in the world where Apple, Inc has become a well-known name in the market. Apple, Inc heads the industry of equipment in innovation. The company received an award-winning notebook computer and desktop known as OS X operating system. This report will focus on the enterprise impact on its overall success and its significance to the organization success in meeting its objectives, goals, and mission. The apple company strategy has benefited it by giving capital, personnel, set standards and lastly importantly activates people. Apple is distinct from its competitors because it delivers high-quality products. The products of the company are also attractive and unique the characteristic has helped to strengthen its market shares. Apple being known globally came as a result of a high percent of profits garnered from foreign markets For a system to have a successful mission, vision, and stakeholders, the managers must have the ability to evaluate their environment, learn to think strategically and develop new ideas. Steve Jobs, one of the founding stakeholders of Apple Inc, took an advantage of using strategic plans to make Apple’s mission a simple one- making easy to use PC to the general market, changing the market for equipment.

Apple mission

The company mission has evolved over the decades considering several factors. The firm has examined the changing business landscape that influences the possibilities of what Apple does in general and on a daily basis. Apple Company respects and recognizes the changing industry and market. The statement of the company shows committed to the production of best personal computers of high quality in the world. It leads the digital music revolution with its products like the iPods and iTunes online store. The company also has reinvented the cell phone products with the revolutionary App Store and phone. It defines the future of computing devices and mobile media with iPod. Apple’s mission declaration is very accurate in showing what the company will do and does. Details about personal product lines are held to display the firm’s current condition. The mission statement mentions OS X, iLife, Macs, iWork, and others. These features are essential in identifying and establishing the baseline for later actions that Apple will implement (Carlton,& Annotations, 1997). These standard operations are also presented in length. The details about what the organization plans to do are dealt in the mission statement. The apple company in its mission statement reveals that the firm plans to maintain focusing its development and research on cell devices.

Apple's vision

Apple's current vision statement shows that the company believes that they are leading making great products and changes in the world. The company vision says that they currently committed focusing on innovation. They believe in doing what is simple to them but not involved. The vision statement shows how the company undertakes to come up with new production and unique in the market. It focuses on the simple projects that truly meaningful to us. It allows and motivates them to work on what others have not tried. Apple’s vision statement reflects and detailed the organization’s overall approach to securing continued success and growth. For example, the report enumerates some major points, e.g., as the stress on innovation. The change directly relates to company rapid innovation strategy (Linzmayer, 2004). Also, the vision statement specifies simplicity, which is also an integral aspect of the enterprise’s approach to product design and development. Apple is known for user-friendly and easy-to-use products that help improve daily activities. For instance, the uniformity of the design of iOS and iPhone secure it easy to phone, access the Internet and use apps. Furthermore, the vision statement of Apple shows a careful choice of markets. This factor displays the firm’s use of market analysis to oversee decision-making in the strategic formulation and product development.

Porters five forces to determine competitive advantage of Apple Company

The five forces introduced by Michael Porter are used to impact competitiveness in the company. The five forces bring insight about the external factors influencing the business. They also share light on what the firm does to ensure governance despite the competitive landscape. Apple continues to tackle competition and the bargaining power of the buyer. The two are the most critical externals factors impacting the origination. Apple must follow and focus on the steps of the efforts on the two external factors to keep its leadership. The external factors point out to local markets to competitive rivalry and bargaining power of customers should participate in strategic formulation towards the continued process of Apple products (Barney, 1995). Competition is a challenge to every growing organization in the world. There are threats to the new entrants in the business who face stiff competition from established firms. Apple company could introduce new strategies every time to maintain its stability in the market.

Apple, Inc. SWOT Analysis

Strengths

The power of the company is a competitive advantage. The Apple brand name is a household name the brand value of Apple, Inc. improved to $13,724 million in 2012 from $11,037 million in 2011( Rachet, 2014). Apple is distinct from its competitors because it delivers high-quality products. The products of the company are also attractive and unique the characteristic has helped to strengthen its market shares. Apple being known globally came as a result of a high percent of profits garnered from foreign markets totaling to 54%. Apple products are easy to carry around and use because the majority of its goods are small, light, and easily carried around. The company also has a significant advantage of product diversity. It means there is a good thing for everyone from all age brackets. The customers of Apple products are very loyal even though its products cost more than its principal opponents or competitors in the market. Apple reported in 2007 a net profit of 24.006 billion; which equates to rise to about 400%. Apple gets financed by its equity since the company does have any debt hence making it less risky for its investors. Apple sold in 2012 over a 150 million IPods where it almost controlled 70% of the United States market for portable devices.

The Apple products innovation has led the organization to increase its expertise in I-Phone, I-Pod, I-Works and I-Tunes products. Apple has been able to design products over the years that are almost impossible to imitate. It has placed the company in a valuable point over its competitors. One of the best desktops computers is Apple’s PC because it has an operating system which is convenient and virus resistance.

Weaknesses

Apple invests heavily in research. It takes a lot more in research than its competitors. But all in all, the company’s products and services encounter quality problems from time to time. Some consumers in 2005, reported that the IPod Nano had cracked screens hence it was first introduced and new in the market. The iPod users also complained about faulty batteries. Apple succeeded the entire stock free of charge at the expense of the business. Apple Ultracompact USB Adapter in 2008 introduced an Exchange Program with immediate effect when consumers started complaining that the adapter’s metal prongs were getting stuck and breaking off in the power outlet generating the risk of electric shock. It also went ahead to exchange all ultracompact power adapters for a newly redesigned adapter which was given free of charge to its loyal customers. Organization’s reputation is mostly ruined by product warranty, defects, and other expenses.

The lack of debt can also compound to a weakness since the group is extremely susceptible to stock acquisition by other agencies. Many investors dropped their interest in the company due to the equity/debt issue and the case that Apple has not declared to their shareholders any dividends.

Opportunities

Apple Inc. is recognized for its innovation way of thinking. The company was able to develop product lines that are both attractive and functional in design. The iPod collaborates and talks with Nike running shoes by getting data such as how many calories fired and the distance moved. It boosted the demand for IPods. Therefore, it gave the company a great success over the MP3. The latest invention Apple’s Leopard OS got rave review by selling 4 million copies nationwide. Apple integrated into additional with the automobile makers, and now many United States cars models are fitted with the IPod connectivity.

Apple in agreement with its distributing partner AT&T in 2007 started the sale of iPhones. Jobs the founder predicted that the iPhone reinvented the mobile and the internet in your pocket. The iPhone is a combination of a widescreen iPod, cell phone, and the Internet applications and functionalities that support web browsing, maps, and email on a mobile phone. Although the iPhone came with a price tag which was steep did not deter its consumers from buying it. AT& T also made a concession with Apple.

Threats

Stiff competition faced the industry faced from others companies that include Samsung, Dell, Lenovo and among others. Gateway was acquired by Acer hence creating a vital player in the PC market. Nevertheless, HP has overtaken and is the leading in the industry with 88.89 billion dollars gross revenue. Dell still also has the highest income in total. Its small budget gives the organization a competitive advantage in the personal computer market.

The ever changing technology is another threat to Apple In. The iMacs and iPods are being repeatedly updated. The common threat of other projects replacing the iMac and iPod. It may change Apple’s role in the machine industry forcing Apple to produce useful products.

The economic crisis in the globe is also another threat. The uncertain economic conditions in the world apparently set back the demand for Apple’s services and products and. Apple has a large international market. The apple company revenues from outside the nation would be affected by the exchange rate. The dollar depreciation in the world causes a reduction in Apple’s net receivables.

Strategies to maximize its competitiveness and profitability

Apple Inc. Rely on the suppliers who are the third party of assorted parts used in its products. Apple receives almost all of the conventional components in the case of personal computers from numerous sources. They also receive certain essential elements from limited or single customers. These critical elements are NAND flash memory, DRAM, and TFTLCD flat-panel displays

Apple also faces some challenges due to the constant changes in leaders and strategies at the steerage of business. It makes difficult for the company to implement a good strategic management plan. The strategic master plan needs a long-range view when done perfectly.

Its sales will continue to rise. The company net profit has grown up to 200% over the past five years. Competitors see it difficult to imitate Apple product due to virus-free PCs and high security. The company still is in need of working on its weaknesses. The business has an excellent character in the market for its high-quality products. It is evident that Apple needs to increase its R&D efforts due to some components such as the Ultra Compact USB Adapter and iPod screens malfunctioning to reduce faulty products. Another weakness is their high price of the product. Such high prices scare the consumers. Especially, when there is an economic recession, people are starting to save. To reduce its price would be the solution to the position where they can make a profit on their assistance.

The lack of meeting dividends obligations to their stockholders is a challenge. Since 1995, Apple has not paid dividends to its shareholders even though the company has the financial muscles to pay. The smart strategic move would have improved the stockholder loyalty hence increase in shares.

Apple’s threats are many, but management and leaders can quickly resolve frequent changes in strategies at the summit. An effective management strategy requires that everybody within the institution should get involved in the thinking and decision making which very often needs to be reviewed.

Apple Communication plan

The Company uses an integrated communication system and other formal communication channels. It advocated for bottom-up and vice versa communication system. The integrated communication channel was fast than the formal ways of communication. Information was passed from one department to another quickly. The channels of communication were controlled by their systems which updated daily.

Corporate governance techniques used by Apple Company

Apple Company being an international company with subsidiaries all over the world, uses the independent audit as part of cooperate governance structure. The audit of the company financial statements serves as the internal and external stakeholders at the same time. The reports help the investors, shareholders, employees and regulators determine the company financial performance of the Apple Corporation. It gives the company a broad view of the organization internal working conditions and mechanisms and future outlook.

It also applies the external control mechanism including the government, financial institutions, and trade unions. Apple company external mechanism observes all objectives including adequate debt management and legal compliance. The government controls all activities in a country of operation.

Effective leadership

Apple company leadership was under Cook, who was intelligent and genius. Apple Company had an effective leadership that led to the success in the business for over a decade. Cook as the CEO advocated for transparency, faithfulness, avoiding fixing what is not broken, don’t try to be what you are not and lastly is to make risky but sure bets in business. Cook choose to forfeit up to a third of his stock compensation which later lay over 130 million dollars after eight years. The company employed competent employees with different areas of specialization. It created a pool of ideas from all sorts.