Strategic Management of Apple Inc-Free-Samples-Myassignmenthelp

Question: Discuss about the Strategic management of global technological Organization Apple Inc. Answer: Introduction Strategic management is of paramount importance for an organization because when strategies are well-formulated by an organization, it can benefit the organization in several ways. The strategies formulated by an organization should be aligned with the components of the mission and long term vision statement of the organization (Hill, Jones Schilling, 2014). The future can be taken into account and strategies are formulated after analyzing the micro and macro environment of the organization. A proactive approach is adopted by the organization while formulating strategies which enables a business organization to leverage the opportunities of the external environment by utilizing its inner strength or core competence and to mitigate the threats of macro environment by focusing on strengths and minimizing the weakness of the organization (Griffin, 2013).The purpose of the report is to analyze the current strategies of the Apple Incorporation by analyzing its value chain activities and its long term vision statement. The problem or issue that is addressed is that few strategies of Apple Inc are not suitable. The scope of the report is to analyze the Porters Value Chain Activities of Apple Inc, Porters Generic strategy, future strategies are suggested and implementation of the future strategies for Apple Incorporation is analyzed. Recommendations are provided to address issues of strategies of Apple Incorporation (Eden Ackermann, 2013). Discussions Background Information of Apple Inc Apple Incorporation is an American Multinational Technological Company which is headquartered in California, Silicon Valley. iMac, iPod and iPhone are the main products of Apple Incorporation( Anzures Sabatelli, 2014). The organization was founded in the year 1976 and since then the organization has focused on innovation and creativity. The first personal computer was produced by Apple Inc and Apple Inc has shifted its focus from manufacturing computers to manufacturing and selling consumer electronics goods like Apple watches and iphones (Han Park, 2010). The core of the business strategy of Apple Inc is the core competency of the organization to design its own operating system, software and hardware application, the innovative product design of the Company delight customers of the organization year after year. Apple Incorporation has a huge customer base because of the organizations user friendly operating system which attracts customers and they are willing to pay premium price to own products of the Company (Kane, 2014). Identification and Evaluation of Suitability of the organizations Current Strategy Primary activities in the value chain of Apple Incorporation are as follows The Inbound Logistics of Apple Inc Corporation- There are hundreds of suppliers across the globe and used modern technology to manage its Supply Chain activities. Apple sources from countries like United States, Europe, and other countries of Asia and since Tim Cook was elected the CEO of Apple in 2011, he has applied the strategy of incorporating healthy competition among suppliers and number of suppliers has also been reduced. Strategic relationships are developed with suppliers and Economies of scale is achieved due to massive operational activities. The organization can leverage cost advantage by utilizing effective bargaining power with suppliers. Apple Incorporation outsources its manufacturing operations in countries of Asia where human resources are available at cheaper rate and thus this activity adds value to the operations of the Company. Only few models of Mac Computers are manufactured in the United States and Ireland. Apples outbound Logistics The warehousing facilities and distribution of the already manufactured iPhones, iPads and Mac computers are a part of the outbound Logistics of Apple Incorporation. The organization and e-commerce platform is used to sell the products of the Company more than Apple stores as this platform is more cost effective. Immediately after Amazon.com and Wal-Mart Stores Inc. the organization has secured third rank in terms of retail leaders. The outbound logistics of Apple Incorporation in Asia and China does not contribute much to the expense of the Company and thus cost advantage can be achieved by penetrating the Asian market (Hill, Jones Schilling, 2014). Apple Incs marketing and Sales The different sales channel of Apple Incorporation are Apple Online Stores, Apple retail Stores, Direct Sales Force of the organization, Third party cellular network carriers, wholesalers, retailers and Value added resellers. The enterprise sales were the prime focus of the organization and after Tim Cook was selected the CEO of the organization, extensive tie-up with Channel Partners enhanced the volume of enterprise sales of Apple Incorporation. For instance, Apple entered into a partnership with Cisco in the year 2015 and networks of Cisco was optimized in iOS based devices of the organization and better business integration was developed between the iPhone and voice and video environments of Cisco via apps. In the year 2015, the budget for advertising of Apple Incorporation reached to USD 1.8 billion and this budget continuously kept on increasing since Tim Cook was appointed the CEO of the organization in the year 2011. Sales through direct distribution channel was 25 percent of the net sales of the Company in the year 2015 and sales through indirect distribution channel contributed to 75 percent of the net sales of the organization in the year 2015(Hittmr, Varmus Lendel , 2014). Service of Apple Inc The customer service delivered by Apple Incorporation is of superior quality during all stages of customer services the pre-purchase stage, the purchase stage and the post purchase stage. There are Apple stores and Apple Centers in major cities across the globe where customers can walk-in and touch and feel the products of the Apple Incorporation so that they can be well assured about the superior quality of the products of the Company. The male and female sales force of the organizations who assist the customers have great product knowledge and are well experienced and tech savvy, so they can demonstrate the features of the products of the Company efficiently to customers. The post-purchase services provided to customers also delight them as customers can easily upgrade to newer versions of iPhone launched every year by making additional payments. The strategy followed by Apple Incorporation is differentiation of products and investing in new product development which satisfies the needs, wants and requirements of a niche customer segment. Apple prices all the products in the premium range and the brand is considered a status symbol and customers are willing to pay premium price to own the products of the organization (Zott Amit, 2013). Support activities of the Value Chain Human Resource management is also a prime supporting activity in the value chain of the Apple Incorporation. Inclusion and diversity are the culture of the organization and Apple Incorporation has hired talented employees across the globe and paid them well and adopted innovative retention strategies to retain the human resource since the times of the founder Steve Jobs. The organization fosters creativity and innovation among its employees. Procurement- The suppliers of Apple provide good working conditions for workers and Apple is also a buyer from its suppliers and thus Apple has excellent relationship with suppliers across the globe. Firm Infrastructure- The organization structure, the culture of the organization, the structure of management all form a part of the organization structure of Apple Incorporation. The organization reengineers its business process and the innovative infrastructure of Apple Incorporation enables the Company to manage the business process efficiently (Bourletidis, 2014). Importance of Porters Value Chain Porters value chain activities are important for analyzing the strategic management of Apple Incorporation because the internal activities of Apple Inc can be analyzed using Porters Value Chain Activities. The primary and support activities of the value chain helps in analyzing which activities add value to the firm and enable it to achieve competitive advantage, the activities which require improvement can be analyzed using Porters Value Chain Model (Boons Ldeke-Freund, 2013). Porters Generic strategies components The Porters generic strategies are used by a business organization to gain competitive advantage. In the cost leadership strategy, costs are eliminated from the activities of the value chain, organizations gain competitive advantage by achieving cost advantage. The sustainability of the organization is assured through lean times because of the low cost strategy of the organization (Teeratansirikool et al., 2013). The differentiation strategy focus on creating differentiated products to target different segments. Variety of products are branded, promoted and priced differently when organizations follow differentiation strategy (Yu et al., 2013). The focused strategy is used by an organization to cater to the needs, requirements and demands of narrow market segment also called niche market segment (Rees Karbing, 2015). Importance of the Porters Generic Strategy The Porters Generic Strategy can be applied to Apple Incorporation to analyze the current strategy for the organization. The current generic strategy that is adopted by Apple Incorporation is focused differentiation strategy. The Apple Incorporation focuses on Research and Development for innovation of the products and developing and upgrading products for existing and emerging markets. Apple Inc uses premium pricing to price the products for niche segments of the market and targets population with high disposable income who are willing to play premium price for products of Apple Inc (Johnson et al., 2013). The current strategies of Apple Incorporation are suitable for the organization. The use of focused differentiation strategy of Porters Generic Strategy is suitable because it helps the organization to develop a premium brand image, the strategy focuses on a niche market and the brand enjoys high Customer Perceived Value (CPV) and has a huge base of loyal customers. The user friendly operating system and the release of better version of product every year, like the launch of iPhone 7 in 2016 and iPhone 8 in 2017 clearly reveals the innovation and creativity adopted by the Company in upgrading features of products. Also premium pricing strategy is suitable for Apple because the highly differentiated products of the Company are only targeted to niche segments of society who are willing to pay premium price to own products of the Company. The current strategy of the organization to outsource manufacturing facilities of products like iphone in low-cost Asian countries to Companies like F oxconn is suitable for Apple Incorporation because it enables the organization to achieve cost advantage in manufacturing The strategies that can be recommended to Apple Inc are as follows Apple Incorporation should focus on developing new products for emerging and existing markets. The extension of product lines will enable the organization to sustain in the market for longer time. For instance, Apple Incorporations new product Apple watch was popular and widely accepted in the market. Similarly Apple Incorporation should develop more products especially technical products to satiate the changing needs of customers. Apple should focus more on horizontal integration Apple should focus on CSR activities. For instance, the firm has an online education store and support for learning through mobiles is provided through iTunes U( for University), however such initiatives should be extended to emerging economies like Brazil, China, India. Apple faces stiff competition from Samsung in emerging markets and CSR initiatives will enhance a good image about the organization in minds of consumers and profitability of the organization will increase indirectly. Evaluation of implementation of strategy The Hubbard Model for implementation of strategies suggests that business organizations should analyze its capabilities like core competency and the environmental factors for implementation of strategies. Also culture, people, systems, structure and leadership of an organization are of paramount importance for the implementation of strategies. The culture and structure of organization should be supportive for implementation of strategy. Employees should be motivated by leaders, budget preparation and utilizing information system are important for implementing strategies (Peppard Ward, 2016). Fig: Hubbard Model Source :( Porter Heppelmann, 2014) Importance of Hubbard Model The Hubbard Model can be applied to Apple Incorporation because the organization already provided innovative products to customers under visionary leadership of Steve Jobs and the organization culture of product differentiation , innovation and creativity should be carried forward in future for strategic implementation. Also current strategy of focused differentiation is achieved by leveraging the manufacturing cost advantage and outsourcing manufacturing facilities in Asian countries (Joo Bettencourt Gomes de Carvalho Simas, Francisco Bertinetti Lengler Jos Dos Santos Antnio, 2013). The organization should take leverage of its strong research and development team and strong balance sheet to bargain with suppliers and achieve cost advantage. This will enable the organization to develop new product line for emerging markets where the infrastructure does not support the products of Apple. Apple Incorporation can also drop the additional features of its products for emerging markets to reduce cost to make these new product lines affordable for the emerging markets (Markides, 2013). There is always excess inventory left with Apple Inc and these inventories should be distributed to the schools in emerging markets to support the cause of education. This will increase the brand awareness and visibility of Apple Incorporation in emerging markets (Porter Heppelmann, 2014). Change management Apple Incorporation manages changes by following its own release cycle, introducing new features slowly and making its operating system user friendly. The organization does not follow competitors and manages changes by clearly communicating the changes to its employees. Performance Measurement The performance of Apple Incorporation can be evaluated using Balance Scorecard Framework. Information should be collected well, business processes should be analyzed to identify waste and bottlenecks, customers perspective should be analyzed and financial performance should be analyzed by Apple Incorporation for evaluating its performance. Fig- Performance of Apple Inc Source: (Peppard Ward, 2016) Key Issues and Recommendation Key issues during strategic management analysis The key issues that are faced by Apple Incorporation are that the organization faces stiff competition from competitors like Samsung in emerging markets because these markets do not have infrastructure to support the devices of Apple, also high price is not affordable for customers in emerging markets. These key issues can be resolved if the brand develops some new product lines for the emerging markets , dropping out some additional features will enable the organization to reduce cost for products of emerging markets. Also, CSR initiatives will increase the brand awareness of the organization in emerging markets. Apple can take leverage of its strong balance sheet and strong bargaining power to achieve cost advantage from suppliers and then utilize this in developing new product lines. Also, extra inventory of Apple can be donated to schools in emerging economy to support education. The key issue of Apple Incorporation of focusing only on vertical integration can be resolved by focu sing on horizontal integration and adding extending the product line of the Company. Apple Incorporation can take leverage of its Research and Development team to focus on Horizontal integration which will enable the organization to sustain competition in the long run in emerging economies. Conclusions It can be concluded that Apple Incorporation has been successful in achieving customer loyalty by maintaining its strong brand image among customers. The organization has focused on innovation and creativity and releases new and upgraded versions of products every year. 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