Apple Incorporated Strategic Management
Apple Incorporated is considered to be one of the best and most successful companies in the market. It is a multinational enterprise that deals with manufacturing and marketing of a wide range of personal computers, digital music players, devices for media and mobile communication, sells a variety of peripherals, services and related software, networking solutions, third-party digital content and applications (Apple Incorporated, 2013). The products and services which are sold worldwide include iPhone, iPad, iPod, Macintosh computers, Apple TV, Xserve, iOS operating systems, the Mac OS X and others (Apple Inc. Stock Report, 2013). The company operates on a geographic basis, including the USA, Japan and the European countries. It does its best to comply with different types of regulations for the production and marketing in countries, where it operates and sells the products.
Apple Inc. has been capable of maintaining a steady pace as it tries to continue with the market analysis which has been improved with having a strategy that is properly deployed and through capitalizing on strong sides that have been underlined. The strategic management is considered to be very important to any leading business which operates in any economy area (Yoffie and Slind, 2008). With the strategic management improvement, Apple Inc. is in benefit in many ways despite the struggles that have been seen in the process. Arising as an industrial giant in the modern business world is not an easy achievement which requires a good strategy that clears the way to success. Internal growth has improved the competitive growth of Apple Inc.
In technology, Apple Inc. has made advances from the basic computer industry to the involvement of peripherals based on its services and products that have been widely available. The mission of Apple Inc. highlights the company as the one that is in the process of making a revolution in the technology industry. The short term goals of Apple Inc. have not been well determined. It shows one of the major strategies shortcomings of the company. Their goal was to make sure that customers get the best quality personal computers around he globe, that is why any other arising objectives have proven to be difficult to the company. Lately, it has been discovered that, because of the emerging competition in the modern market, Apple Inc. continues losing its clients to other companies that are supplying their products at a lower price, like in the iPod music. It has been greatly related to the increasing number of hackers and piracy.
One of the most valuable features that help Apple in being unbeatable is a strong brand name that together with the marketing strategy and high quality products results into a high brand loyalty. The Apple’s marketing campaign is considered to be brilliant as the company reels in its potential customers and downplays the competitors at the same time. Nowadays, Apple adopts a differentiation strategy that is characterized by its distinctive campaigns of marketing that position the company as an alternative to other brands within the industry. The company’s strategy serves a broad target market through positioning itself as a digital convergence firm that does its best to enhance the consumers’ digital lives. Instead of building its strong culture and brand, Apple has delivered one innovative product design after another. Key external and internal factors of the company are analyzed using the SWOT analysis that is a strategic planning tool used to evaluate Apple’s strength, weaknesses, opportunities and threats.
Apple is a pioneer in the industry of personal computers. It controls product manufacturing and all its operating systems. Customer loyalty and expanding closed ecosystem are also considered to be strengths. Being a leading innovator in the technology of mobile devices, Apple remains the most innovative company around the globe. The company focuses on product design and innovations with the saving space intention. Apple boasts strong financial performance and higher gross profit margin in comparison with its competitors. Apple is not directly affected by credit markets or interest rates. Marketing is the company’s strongest functional area.
The high price of Apple products is one of the main weaknesses. Decreasing market share prevents the company from influencing its potential customers and persuading them to use closed ecosystem devices produced by Apple. Another weakness is the incompatibility of different OS which influences the customers’ decision to use accustomed hardware and software. Apple’s brand and financial situation are damaged by patent infringements which were the cause of constant accusations.
Apple’s market share in the tablet market will greatly increase with the sales of iPad mini and will strengthen the competitive advantage of the company. Launching iTV will support Apple TV sales and its ecosystem. Apple need to find a new processors source but have not been able to find a suitable one yet. However, new manufacturers with high quality engineering possibilities are showing up and it is just a matter of time for Apple to seize upon the possibility of not being dependent on its competitors. The growth of tablet and smartphone markets is a good possibility to expand the company’s share in these markets. With a strong growth of mobile advertising, Apple has created iAd advertising platform which allows to advertise on Apple products like iPad, iPhone, and iPod touch. Apple could expand its range of iCloud services due to the increasing demand for software as the demand for cloud-based services.
The greatest threats Apple and the other technology companies are facing is quick technological pace. It is hard when a company wants to present a new, innovative and successful product. Apple had the possibility to bring new innovative products to the market, but right now, even they have not revealed any future plans for new products (besides iTV) and may lack new introductions to uphold with competition. Apple received more than a half of its profit from outside the U.S. Dollar rating against other currencies decreases possible profits from those countries. In addition, there are more and more companies which enter the market making Apple’s competitive advantage tougher and tougher (SWOT Analysis of Apple, 2013).
Large organizations often face the issue of deciding in which proportion they should distribute resources among different units of small business. The business portfolio will perform best in case the company stresses on its strengths and ways to avoid its weaknesses as well as exploit the opportunities that cause financial benefits for the company and increased market share. There exist several methods which can be used for portfolio planning. However, BCG matrix is considered to be the most common. According to BCG matrix, Strategic Business Units are divided into four categories including stars, cash cows, dogs and a question mark. Due to the fact that Apple has a large number of successful products, it is quite hard to apply its BCG matrix.
iPhone and iPod need further investment in product development. There are also greater opportunities for the product growth in the market. The growth rate if iPods is 28% and of iPhone it reaches 48%. Apple is not the market leader in iPhones and iPods, however they are critical for the company’s success in the long term.
iTunes digital downloading software may be placed in the category of a cash cow. Apple is a market leader in this market segment having 82% of the market share. The company has outplayed all its competitors in this market segment. The iTunes growth rate indicates that it does not need huge investments for the future product development. This cash flow stream is essential for providing cash for Question mark products.
Mac Os X’s and Mac Software should be placed in this category as they have a possibility of capturing further market share in case of fundings for innovation and product development. The company has a comparatively low market share in these market segments. However, there are quite high growth rate opportunities available.
Apple is not a market leader in the Macs market segment and does not enjoy the percentage of the relevant market share. Thus, there are few chances of capturing further market share (Strategic Analysis (SWOT and BCG Matrix) of Apple Inc., 2012).
A sustainable competitive advantage of Apple is created due to its horizontal strategy of integration across channels and devices, as well as the integration strategy from a chip design to software and retail. The company is considered to be a brilliant example of the classic theory of the business strategy at work. However, the company needs to improvise its products and technology to eliminate the problem related to the loss of its customers. The identification of a specific customer group would be very relevant in the process of ensuring the existence of the target audience. Having a specific customer group will provide an opportunity to progress with a strategy that will result into a continuous market of its products. It is very important for the company to choose the correct strategy of the international market entry as it impacts the company’s long-term success. It is thought that Apple should pay more attention to some key aspects to continue the growth and succeed. The company must continue a stable licensing commitment, become a learning organization and push for economies of scope between computers and media.