Technologycompanies are continuously changing to meet the global demands. Therapidly changing industry mandates companies to instigate measuresthat make them stay relevant. By looking at Apple Corporation, theseaspects can be elaborated. Apple strives to design novel equipment bystrengthening their Research and Development team (R&D). Being aleader in digital music, the corporations has revolutionized theindustry with iPhones, iPods, and the iTunes. It also has an AppStore that has reinvented the mobile phone industry.
Accordingto the founders of the corporation, the main aim was to make theworld a better place in many aspects, especially security. As such,it has channeled its funds towards security. The R&D team mustcome up with novel ideas that are distinct and implementable.
Table of Contents
Value proposition 4
Market position 5
Competitive advantage 6
External analysis 6
The intensity of competition in the industry 6
The bargaining power of suppliers 7
The bargaining power of the buyer 7
The threat of new entrance 7
The threat of a substitute product 7
SWOT Analysis 7
Organizational Assessment 9
Apple Inc Balance Scorecard 12
Performance Indicators (KPIs) 12
Aspects of the Balanced Scorecard 13
Financial perspective 14
Customer Perspective 14
Internal Perspective 15
Learning and Growth Perspective 15
Strategic issues 16
Detailed Analysis of Strategic Issues Facing Apple 16
and Recommendations 21
AppleCorporation is one of the leading technology companies across theglobe that designs, develops, and vends computer software,electronics, and online services. The company concentrates on FablesSilicon Design, energy production, and digital as well as softwareproducts. Other than that, the corporation dwells in computerhardware with its primary goods being Mac, iPod, Apple Watch, OS,iOS, iBooks, iTunes, iWork, and iPhones among others. Additionally,the corporation strives to offer adequate services ranging fromiCloud, iBooks Store, Apple Store, Apple Music to Mac App Store amongothers. Moreover, the company is the largest in the IT sectorregarding revenues and assets. For instance, in 2015, thecorporation’s income was $233.715. Furthermore, the company employsmany employees from different backgrounds. In 2015, it had roughly115,000 workers[ CITATION App163 l 1033 ].This paper will look to dwell on the value proposition, marketposition, and competitive advantage of the corporation. Apart fromthat, the paper will assess the external environment as well as thecurrent one and the strategic issues compounding the company.
Thoughthe technology field is dense with many companies involved, Applecontinues to lead regarding the mobile device technology. It covers avast market with more than 478 retail stores operating in close to 17nations. Due to these huge markets, the corporation’s financialperformance is quite stable. A good example can be drawn from the$300k it earns per minute. Apart from that, it is valued at 118.9billion[ CITATION App163 l 1033 ].According to financial statistics, it exceeds the U.S. Treasury inoperating cash. Such aspects entice consumers who only want to beassociated with the best companies. As portrayed by their visionstatement, they strive to attract more customers.
Anotheraspect that makes the company’s valuation to be high is innovation.By concentrating on novel products, it can attract many consumers.Additionally, the company focuses on the technologies they areconversant. Instead of focusing on more technologies in small bits,it focuses on few aspects[ CITATION App163 l 1033 ].In other words, instead of dwelling on many projects that are ratherinsignificant, it channels its resources to a few meaningful ones.The company has also managed to be successful throughcross-pollination and collaborations within its member groups. Guidedby strongvalues of excellence, honesty, and courage, the company has managedto heighten its value within the technology field.
Thecorporation is also well positioned when it comes to the marketingaspects. It has experienced strong geographical growth worldwide. Forexample, close to a third of its sales come from Asia and anotherthird from the U.S. The company has more influence in thesecontinents more than any other including Europe which has a 22percent market share. The market position in Asia continues to bestrong, and by 2011 it had doubled due to the Apple iPhone. In thesame year, the iPhone market rose by 85 percent[ CITATION App163 l 1033 ].The corporation’s market share continues to heighten due to themobile and tablet that is somehow greater than Google Android.
Thecompany’s competitiveness is enhanced through various means. One ofthem is product development. In this facet, the corporation is knownto produce high-quality goods that entice consumers. It also fundsthe R&D team to develop novel goods that are unique continuously.By dedicating much of their efforts in product development, Apple hasmanaged to stay competitive in the technology field. Two elements areevident in the process i.e. iteration and launch. In an iteration,the product is carefully designed, revised and adjusted to satisfythe company. In launch, the corporation provides the best devices tothe consumers.
Thecorporation is also involved in market penetration. As such, itconcentrates on the present market trends. In other words, due to thecompetitive nature of this industry, the company has to dwell incurrent products. It can be exemplified via the sale of iPods, iMacs,and iPhones. Another element entail market development. Tapping freshmarkets, especially in the emerging markets is a logical techniquethat draws more consumers. In the new areas, it also produces freshproducts like the Apple Watch to entice the customers[ CITATION App163 l 1033 ].
External analysisThe intensity of competition in the industry
Asper Porter`s model, competition in the industry defines how acorporation operates. One main aspect that benefits the company isthe ability to offer substantial technical support to its consumers.Apart from that, it develops strong bonds with the customers tomaintain loyalty. As such, competition is not a hindrance to much ofits products and services.
The bargaining power of suppliers
Thisaspect affects the corporation in that as fresh suppliers enter themarket, the company’s bargaining power is reduced. However, bystaying competitive within numerous suppliers, the corporationmanages to decrease this feature.
The bargaining power of the buyer
Thebargaining power of buyers is high. It is because the technologyfield is quite competitive. In that regard, small changes in priceaffect their decision. Nevertheless, Apple manages to stay attachedto its customers as exemplified by the 75 percent profit share inthis industry.
The threat of new entrance
Thethreat of entry to the market is moderate to high. It is because theylower the market share. However, Apple manages to counteract thisaspect by offering a differentiated range of products. As such, freshentrants may find it hard to outweigh the existing corporations
The threat of a substitute product
Thisaspect is moderate to high. In other words, when a fresh productenters the market, it poses significant threats to the existing ones.If the performance and price are favorable, the existing products mayface major challenges.
Appleas an organization has been the leading manufacturer of qualityelectronic products. Unlike most of the firms that have beenoperating in the industry, the organization has been able to enjoyfrom an increase in the sale of its products since many customers areresorting to the use of their products. In light of the same, itwould be mandatory to carry out a SWOT analysis to determine thefactors behind the success of the organization in carrying out of itsactivities.
Thefirst advantage that the organization has regards the leaders of theorganization. Starting from the founder, late Steve Jobs, theorganization has been able to enjoy effective leadership skills fromsome of the most eloquent persons. Currently, the CEO, Tim Cook, hasbeen of significant influence when it comes to the success of theorganization [ CITATION App163 l 1033 ].
Secondly,the organization does enjoy from the loyalty of the customers. Manyof the clients who have been able to purchase products from AppleCompany tend to go back to the organization, probably because of thenature of services that they are offering. The company has also beenable to take advantage of globalization that has made it possible forthem to enjoy from a wide market share since the customers arelocated in different parts of the world.
Despitethe benefits that Apple as an organization does have in the industry,there are challenges that they are facing as well. The company has todeal with the growing competition that is in the telecommunicationindustry. Notable companies such as Microsoft, Samsung, and othertelecommunications firms do offer stiff competition to Apple thatthey have to grapple with [ CITATION App163 l 1033 ].Additionally, the company has had to ensure that because of thecompetitionthat is arising from their activities, they can meet the specificcustomer needs. It can be the only way that the company can be at abetter place to outdo its competitors.
AppleCompany is operating in an industry defined by many dynamics. Thedynamics, however, are at the advantage of Apple. For example,technology is ever changing at a fast rate. Because of the same, manypeople are opting to go for products that are commensurate to thetechnological changes. Some of the characteristics of the sameinclude the use of high-powered computers and smartphones. The sameis an advantage to the organization since they have to produce theitems that would meet the specific needs of the customers. The samedoes reflect the increase in the market share and eventually salesfor the organization. It is an opportunity that the organization hasto take to ensure that they are at the edge over other customers.Further, there is the concept of the skilled workforce that the firmhas. With such kind of a team in place, it is possible for thecompany to be at the edge over its competitors.
Inany business, some challenges do define the nature of activitiescarried out by a particular firm. In the same regard, Apple does facesignificant threats when it comes to the operations that they arecarrying out. For example, there is the need to observe the federalrules that may have been set by the government. Failure to do so, thecompany would risk being shut down. It is an issue that theorganization has to tackle.
AppleCompany does operate in the telecommunications industry. The industryis defined by many companies that have come to offer thetelecommunications services to the people. Some of the notableorganizations that are operating are Samsung, Microsoft Corporationand Sony. The industry has been able to attract many players in therecent years. There is a bright future of growth for the industry.Courtesy of the technological advancements, it has been possible tointroduce new products to the market that can address the individualneeds of the customers. Additionally, it has been possible to havethe organization grow because of the effect of globalization.
Apple`sorganizational culture has played a crucial role in enabling theorganization to achieve its mandate. The organizational culture isessential in allowing the company to adjust to any changes that areforeseen. Further, there is the aspect of new policies and strategiesbeing introduced in the company. The ability of Apple to successfullyachieve the identified strategies while at the same time implementingthe new policies depends on the culture that they have practiced.Apple has developed a strategy that emphasizes on the development ofemployees. The employees are developed and integrated into theorganizational culture. Through the same, it becomes possible for theorganization to achieve the goals that have been set. The integrationof the employees into Apple`s organizational culture is essential inencouraging rapid innovation. Indeed, the organizational assessmenthas indicated the significant achievement attained by theorganization regarding the introduction of products such as iPads,iPhones, and the Apple Watch. The products are a reflection of theinnovative traits that define the organization.
Apple`sorganizational culture is built on five pillars. The first regardstop-notch excellence. The company has introduced a policy thatfocuses on the selection of the best employees to help in advancingtheir strategic goals. Employees who fail to meet their expectationsare fired without compromise. Creativity is the second componentforming Apple`s organizational culture. The employees are selectedbased on their skills, creativity, and knowledge. The firm emphasizesthe need for employees to come up with creative ways through whichthey can address the individual consumer needs. The productsmanufactured by the company are built on creativity. Innovation isthe other aspect that defines Apple`s organizational culture. Thecompany is continually appraised as being innovative. Employees aremotivated to be innovative in the manner in which they execute theiractivities. Secrecy is the other component defining Apple`sorganizational culture. The company focuses on ensuring that theirproprietary information is protected through all measures possible.Finally, moderate combativeness is the other aspect defining Apple`sorganizational culture. The leadership approach is combative with thegoal of ensuring that objectives are achieved.
Appleoperates in the global market hence to reach all its customersworldwide, it has adopted a hybrid marketing system. The cultureallows for the organization to employ a variety of the channels inthe process of marketing their products across the globe. Thetechnique used by Apple is advertising. It encompasses using mediachannels such as radio, television, and press to inform the public ofthe existence of the new products they have. The advantage ofadvertising is that it has the capability of reaching a multitude ofindividuals across the globe since most people have access toelectronic devices such as television and radio. Also, the Internethas been an effective way of informing the public of the productsreleased by Apple into the market.
Themethods used by Apple Company have been satisfactory to the massivesales realized by the organization. The culture employed by thecompany have made it possible for the organization because many ofthe customers have been able to access the goods made by theorganization. Similar companies have used the technique as a methodof increasing sales. Social media through the internet can be used toadvertise the products released by the organization. Further, thereis the concept of value chain analysis that encompasses all themethods utilized by the company to ensure that it improves on theproducts that it offers to the customers. Technology has been appliedto the corporation as means of ensuring that the final product thatthe client ends up with is of the greatest quality.
AppleCompany has an efficient plan to help in the distribution of itsproducts. It acts as a strategy for the organization since many ofthe customers can get the commodity in an easier way. For example,the company has an option where the customers can get the productsdirectly from the company premises. The same eliminates the conceptof the distribution channel that is brought about by the presence ofthe middlemen [ CITATION App163 l 1033 ].However, because not all of the people can access the company, otherchannels could be applied to have the products. It has in place asystem where the buyers could order the products online andarrangements made to ship the product to any part of the world thatthe customer is. The strategy has been effective since it helpspeople access the product with much ease.
Apple Inc Balance Scorecard
Abalanced scorecard is of essential significance because of its rolein helping the company to be innovative and focus itself on theachievement of the highest performance. The balanced scorecard alsohelps in equipping the leaders with skills needed to make decisionsthat are in line with the identified objectives. Apple Inc. hasestablished itself as a central player in the tech market. Thecompany has used the balanced scorecard in ensuring that they realizetheir objectives.
Appleuses five primary performance indicators to help it determine whetheror not they are executing their duties as expected. Customersatisfaction is the first performance indicator that has been adoptedby Apple. Initially, the company focused on technology and the mannerin which they manufactured their products. The company has realizedthe significance of customers and the need to satisfy their needs.Customer satisfaction has been determined as the core tenet of theorganization hence the need to meet their concerns.
Thesecond performance indicator is the core competencies. The companyhas ensured that the employees are equipped with what is required toensure they gain a competitive advantage over its competitors. Thecompany has created a conducive environment that enables employees toexecute their tasks efficiently. Further, Apple identifies the needto have its employees commit and align themselves to the realizationof the strategic goals. Market share is the other performanceindicator that has been applied by Apple to monitor its overallgrowth. The ability of Apple Inc to gather a huge market share can betranslated to the high profits earned by the organization. The largerthe market share, the higher the profits earned by the organization.Further, Apple Inc collaborates with other software developers tofacilitate the manufacture and distribution of their products [ CITATION App163 l 1033 ].If the company enjoys asignificant market share, there is a high chance that the firm willbe able to expand its activities. The increase in the market shareis a reflection of the growth of the company which is translates tohigh performance.
Finally,the shareholder value is the other performance indicator that isapplied by Apple Inc to determine their progress in the techindustry. The shareholder value has been put into their productdesign, sales vision, and their global operations. The companyfocuses on creating business deals and coming up with new operationsas a way of ensuring that they engage in investment activities toboost the shareholder value.
Aspects of the Balanced Scorecard
Thereare four primary aspects of the balanced scorecard that apply toApple. They include
Internal process perspective
Learning and Growth perspective
Thefinancial considerations are of crucial significance inorganizations. Firms continue to come up with strategies aimed at theachievement of set goals. However, as the company introduces aparticular strategy, it is vital that considerations are maderegarding the source of funds and the budget. Apple Inc continues tocome up strategies with the ultimate goal of enhancing theiroperations. The company has taken necessary measures to ensure thatas they introduce new strategies, the focus is put on ensuring thatfunds are set aside to meet the identified goals. Further, it isessential to ensure that their sustainability when it comes to theentire process of funding. The projects initiated by Apple requirethat there is continued funding. For example, the company hasexpanded its operations in different parts of the world. Notably,distribution centers have been established in various parts of theworld to help the company distribute its products to variouscustomers. The venture has been supported by channeling funds to theprojects to facilitate the entire process. The financial perspectiveis a crucial aspect of the balanced scorecard because it considersthe budgeting and funding process. It is essential for Apple to takeinto consideration the aspect of finances as they come up withvarious strategies.
Thefocus is on what the organization can do for the benefit of thecustomers. Apple Inc acknowledges the vital role played by customersin ensuring that there is the continued growth of the organization.The customers are crucial for the achievement of the company mission.Because of the same, Apple has focused on coming up with incentivesthat aim at ensuring that the customer is satisfied. For example, thecompany has taken it upon themselves to come up with promotionsdesigned to attracting many customers into making purchases fromthem. The management in Apple acknowledges the need to satisfy thecustomers because of the significant role it plays in ensuring thegrowth of the organization. Apple has introduced strategies,objectives and measures all that are aimed at satisfying the customerneeds. The implementation of the strategies would be instrumental inensuring that the customers are satisfied with the services provided.
Thefocus is on what Apple has been doing for them to meet the clientneeds. The tech industry continues to grow with the advancement intechnology. However, as the technology evolves, so is the demand byconsumers to have products that are up to date with the technologicaladvancements. Apple, just like any other tech company, has themandate to ensure that they meet the demands of the customers. Theinternal process perspective is a focus on the individual inputsenacted by the organization to ensure that the requirements ofcustomers are satisfied. Further, the internal process is areflection of the assessment by managers of the manner in whichbusiness activities at Apple are conducted. Apple Inc has evaluatedthe internal process as a way of ensuring that they enact mechanismsaimed at streamlining measures to achieve the set goals andobjectives.
Learning and Growth Perspective
Thefocus of this perspective is in the manner in which the organizationis enhancing its ability to be innovative through improvement andlearning to support areas that are crucial to the success of theorganization. Apple has focused on training its employees to equipthem with the needed skills to be innovative to improve operationswithin the organizations. Organizations have noted the significantrole played by providing employees with knowledge to enhance theirabilities. Apple has followed suit by regularly engaging in thetraining of employees. The training is essential as it enables theemployees to focus on the attainment of the identified strategies.
Theidentified perspectives of the balanced scorecard each haveobjectives, measures, and targets that will have to be achieved inthe long run. The organization has the mandate to ensure that theymobilize the needed resources for the attainment of the identifiedgoals.
Oneof the issues entails product and service pricings. The company has amismatch when it comes to this aspect. The cost of the corporation’sproducts is quite high when compared to the other companies. Apple isfacing challenges when it comes to employee satisfaction. It is aproblem that lessens productivity levels when the workforce is notadequately satisfied. Though Apple is strong in the market, issuessurrounding the industry affects it vastly. For instance, severaltechnology companies strive to compete with the company thus limitingits market share. The fifth issue involves ethics. Due to theheightened competition, Apple could be drawn to undertake unethicalmechanisms to stay relevant in the market. For instance, sellingproducts at high prices, yet they have a few specifications. In thatregard, they put profits above quality. Outsourcing of labor may alsopose challenges especially due to varying cultures[ CITATION App163 l 1033 ].
Detailed Analysis of Strategic Issues Facing Apple
Appleoperates in an industry defined by significant competition.Nevertheless, the company has the mandate to ensure that they stay oncourse in their business activities to be the most preferreddistributor of electronic products. However, as the company strivesto maintain the status quo, the company is faced with variousstrategic issues that must be addressed. The strategic issue regardsthe aspect of prices charged for their products and services. Appleboasts of the fact that they manufacture some of the most soughtafter products. However, the company is equally known for the factthat the cost of their products is exceedingly high. The productshave been perceived as being a preserve of the middle and high-incomeearners in the society. The fact that the company sells products at ahigh cost is a significant threat to the overall demand. For example,clients from a low socio-economic background do not have the capacityto purchase the products sold by the company. Companies such asMicrosoft and Samsung which offer similar products have items that donot charge as highly as Apple. Because of the same, there is a hightendency of customers seeking products manufactured by other rivalcompanies. The cost of prices charged for products and servicesoffered by Apple is contentious considering the intensity of themanufacturing process. Apple has strived to ensure that themanufacture the best products at a price that is commensurate withthe production process. It would be a challenge for the company toreduce the prices they charge for their products if they are tomaintain the quality. The issue of pricing is a strategic problemthat Apple must deliberate upon for their continued relevance in themarket.
Theother vital issue regards employee satisfaction. Employees play acrucial role regarding the ability of the organization to achieve thegoals that they have set. The telecommunication industry has seenmany companies come up in the recent years. Some of the companieshave established themselves and are major players in the industry.Notably, firms such as Google, Microsoft and Samsung are key playersin the industry. Apple has the mandate to ensure that they treattheir employees in the best possible way for their satisfaction. Ifthe company misses out on the professional treatment of theemployees, the chances are that it may lose them to other rivalorganizations. The information technology industry is defined by theneed to have a team that is techno-savvy and highly qualified. Alabor force that is highly skilled is an advantage to Appleespecially because of their involvement in the entire process ofmanufacture of high-quality products. Because of the same, Apple muststrive to ensure that they can treat their customers in ways thatencourage them to stay in the organization. If the company witnessesa high turnover rate due to mistreatment, the chances are that it maylose such employees to other firms. The telecommunication industrycontinues to encounter new entrants. Apart from the new entrants, theestablished firms can easily absorb the employees from Apple.Employee satisfaction is a strategic issue that Apple needs toaddress as a way of ensuring that they maintain their productivity.Apple must formulate strategies that take into consideration theinterests of employees. Failure to do so could be detrimental to theorganization.
Competitionis the other strategic issue that Apple faces as it strives to be theglobal leader in the manufacture and distribution of electronicproducts. The telecommunications industry has seen an entry indifferent firms offering the same products. Apple must focus oncoming up with strategies that ensure their stability in the market.Despite the fact that the company has established itself as a keyplayer in the industry, there is a need for the organization tocontinually engage in ways that enable it to gain a competitiveadvantage over the rest of the players in the industry. The factorsaffecting the industry have a significant impact on Apple’sactivities. The entry of other technological firms into the industryis a significant threat to the company. Notably, there is the aspectof competition for the market share. The situation is compounded bythe fact that as there are other entrants, the prices they offer fortheir products are cheap and can serve as a substitute to what Appleis offering. Because of the same, Apple has the mandate to come upwith ways to which they can remain relevant in the market despite theentry of other technological firms. Further, there is the aspect ofthe other main players such as Samsung and Microsoft. Have equallyestablished themselves in the market and distribute high-qualityproducts. The competition is high, negating the need for Apple tocome up with a strategic way of addressing the issue and ensure thatthey remain to be the prime choice for the customers. Through thesame, it would be possible for the organization to stand out andensure they make profits despite the competition.
Theother strategic issue facing Apple is about ethics. Organizationsacross the globe have been tasked with the need to ensure that theycarry out their activities in the most ethical manner. Notably, areasof ethical concern include the need to be sustainable, adherence tothe established rules and regulations and corporate socialresponsibility. Some companies have initially thrived on the groundsof operating in an unethical manner. The profits they have made canbe attributed to engagement in shoddy business deals. For example,some companies have been determined to charge exceedingly high pricesfor their products. It is unfortunate that the prices charged for theproducts are not in line with specifications that exist. The effectis that customers end up with low-quality products at a high price.Engagement in such business activities is detrimental to theorganization since it will be perceived to be engaging in unethicalpractices. The organization will be making high profits whiledistributing low-quality products. Apple has the mandate to ensurethat they manufacture and distribute products of the highest qualitythat are in line with the prices they charge. Profits made by theorganization should be earned in an honest manner. Similarly, thereis the aspect of corporate social responsibility. Organizations mustensure that they engage in activities that will transform the societyfor the better. It is ethical that as the company enjoys growth, soshould be the society from which they are operating. Apple must comeup with a strategy that enables them to get involved with thesociety. Finally, climate change is an issue that is witnessed acrossthe globe. Manufacturing firms must ensure that as they engage in theproduction activities, caution is taken to conserve the environment.Apple has established different manufacturing centers across theglobe including Asia. The need to ensure that the company maintainsthe environment as they engage in the production process is asignificant challenge that Apple has to deal with.
Theother strategic issue Apple has to grapple with is the currencyinflux. Apple relies heavily on overseas markets to earn theirrevenue. For example, with part of the production being done inChina, it means that over 65% of their revenues are derived from theregion. The difference in the geographical location means that Applehas to deal with the aspect of fluctuations in the overallcurrencies. For example, factors such as changes in the foreignexchange rates can significantly affect the operations of theorganization. The profits can be affected if the foreign markets donot favor them. For example, recently, the Yen was seen to bestruggling as the dollar got stronger. The variations cansignificantly affect the overall profits made by the company.Therefore, Apple has to ensure that they formulate a strategy thatcan cushion them against the foreign exchange rates. The changesshould not have a significant impact on the overall operations of thecompany. Through the same, Apple will be in a better position to stayon course in the overall process of execution of their activities.Strategies must be implemented that seek to manage the risks that arebrought about by the currency changes. The distribution of businessactivities in different parts of the world negates the need to be onthe lookout for changes in the foreign markets.
Summary and Recommendations
Thecompany adopts novel mechanisms to stay competitive in this field. Itutilizes numerous techniques that are internationally accepteddepending on the region. Apart from that, it engages in mergers andacquisitions to traverse into new markets across the globe. Forexample, it can partner with sporting companies to popularize theirproducts among the athletes. A good example is the Nike partnershipthat popularizes the iPods among the athletes.
However,with the ever-changing business globe, it is vital for thecorporation to dwell in environmentally-friendly products to promoteconservation. Additionally, the political world is continuallyshifting with fresh regulations managing business being adopted. Inthat respect, Apple should be flexible enough to change its operationaccording to the demands of the external environment.
Apple Inc. (2016). Apple Info. Retrieved from Apple Info: http://www.apple.com