Strategic Plan for Apple Inc.

Executive Summary

Apple Inc. is a leader in the electronics industry which is linked to its ability to mitigate the increasing competition through the production of innovative products. Across all industries, the company occupies the 15th position concerning the most significant global companies because of its superior performance and dominance. Over the recent years due to technology development competition has intensified in the electronic industry forcing companies to review their strategic plans. However, through the investment in research and innovation, Apple has been able to position itself as the market leader regarding innovation strategically. Maintaining this position requires that the company review its strategic plan. This paper will analyze Apple Inc. strategic plan based on its internal and external environment and offer strategic proposals. The reports recommend that the company need to expand its market presence and produce products for all consumers rather than focusing on upper-class consumers. Also, continuous investment in research and innovation is a necessary tool for competition.

 

 

Company Overview

Apple Inc. is a global corporation, based in the United States which was established in the year 1976 (Richard & Terrell, 2008). The company is involved in the designating, production and sells of electronics ranging from computers, mobile phones, laptops and so on. The company is also involved in the production of software products, particularly programs. The company is widely recognized for its innovative products and the ability to differentiate all its products from those of the competitors in the market. As per the year 2012, the company noted that it had more than three hundred operative stores in over sixteen nations with the addition of online shops (Katherine et al., 2012). Apple Inc. is described as one of the largest technology corporation in the globe about the general companies trading across the globe, its resources, profitability, sales, market share and global presence. Based on the fact that the company only produces innovative and differentiated products it offers premium pricing which has been the primary driver of its increasing revenue. Some analysts have in the past noted that the corporation is more productive than the American government (Katherine et al., 2012). The company holds more than sixty thousand staffs across the world which shows its importance in the globalized market.

Despite the success that the company has obtained over the years, it has in several occasions acquired extreme criticism about the manner in which it treats its suppliers and negative contribution to the environment. Most have accounted that the company is not socially responsible for such acts. For instance, the company was criticized for its establishment in China where despite its success its workers live in unhealthy states in addition to being subjected to minimum wages. However, the company has set high operation standards that demands its general compliance for the achievement of these objectives (Bach, 2007). Over the past decade competition in the electronic market has intensified which has led to the intensification of competition and thus pricing has become the competitor's focus. More and more firms have begun to focus on cost leadership besides innovative differentiation a strategy that is effective in retaining and attracting a new set of consumers. Through the use of research and innovation Apple Inc. has enhanced its ability to position products in the market as the best in quality, innovation, and dependability when equated to similar goods in the industry. Despite this success, the company needs to consistently evaluate its strategy to retain its position in the long term globally.

Company History

Apple Inc. was established in the year 1976 by both Steve Jobs alongside Steve Wozniak. The founders developed the vision that sought to transform the manner in which individual’s perceived computers (Richard & Terrell, 2008). The intention was to create small-sized computers to increase personal ownership at home and within the commercial sector. In other words, the main agenda was to create computers that were easy to use based on the needs of the consumers. The partnership began its operation with the creation of Apple I which were presented in the market even with the absence of working monitors which were later included in 1977 (Richard & Terrell, 2008). It is the second set of the production that transformed the computer sector with the initiation of the first colored graphics. Their sales increased rather rapidly, and by 1980 the company was widely recognized by the public. However, Wozniak decided to quit due to his loss of interest in the continuous development of computers and it is then that Sculley John was employed as the company’s leader (Richard & Terrell, 2008). The partnership never lasted long since after two years of operation a controversy emerged forcing Jobs to leave the company and opened his software firm which later emerged as the most significant and successful company concerning the development of computer animation. The company never failed about performance, and it achieved its most crucial sale record in 1990 (Richard & Terrell, 2008). The achievement was however connected to the strategic plan that Job had set mostly with regard to the corporation with small firms such as Adobe which assisted in the development of Desktop Publishing.

The success of Apple attracted large corporations such as Microsoft by Sculley rejected their offers (Richard & Terrell, 2008). Later such decisions become a nightmare because the operating systems of the company turned out to be the most significant competition. The company’s market share reduced notably and most individuals thought the situation would lead to a closure. In 1997 the company was in need of an innovative operating system to produce more competitive products, and it resulted in buying Jobs firm. Jobs was needed because of his knowledge and expertise, and he was made the CEO, and he settled on coming up with significant transformations in the company. He created a collaboration with Microsoft to create innovative software. His decision revolutionized the firm which led to the launching of personal computers and added Mp3 players like iPod (Richard & Terrell, 2008). The company currently operates in the production of iPhone series, TV, and software. Even with the absence of Steve Jobs, his legacy remains because the company only pushes for the achievement of limitless creativity in the innovative society.

Products and or services

Apple Inc. provides a range of electronic products and services like iPhone, Mac, Watch, iPod, TV, software, consumer portfolio, operating system and variety of fixtures, services, and offerings. Also, the company is also involved in selling and delivering innovative contents as well as applications via Apple store, iTunes, Application software and corporate online services that offers music and videos. The corporation is involved in selling its essential products via the retaining shops, internet stores as well as direct sales through other sellers. The aspect has been effective in increasing its sales in general since this tends to make its products easily accessible. The firm is also involved in the sales of Apple products compatibles such as software and fixtures mainly via the online and retailing shops. The firm has a wide range of consumers ranging from small sized, medium sellers, government, and businesses and learning institution. Personalized seller’s accounts for the highest consumer’s portion mainly regarding personal computers and smartphones (Katherine et al., 2012). IPhone represents the corporation’s smartphones branch that utilizes its own made operating system. Its products mainly computers are widely acknowledged as the best in innovation and performance.

The company’s TV products are very developed, and they assist the consumers in accessing digital information directly that supports online streaming of high-quality music and video. The products operate on a self-made operating system that is compatible with all its Apple products. In other words, the company offers personalized electronic products that are technology focused and are developed with the highest sense of innovation. Through such products, the consumers can connect in different ways. Also, all its application software are consumer-focused mainly aiming those with the intention of meeting the digitalized lifestyle such as iLife. With iPad, the company permits its consumers to make contactless payments for all the acquired items (Katherine et al., 2012). With the ability to take credit and debit cards the company has boosted convenience and loyalty from its consumers across the globe. Also, such payment is favorable for the online sales where there is no physical association. The development has also reduced losses since the company can account for all its products sales in general and profitability a strategy that is vital for sustainability.

Operations

Apple Inc. operates within the global electronics industry. The company remains to be the largest firm in the technology sector. The company has been able to maintain such states through adhering to high operating standards. The consumers, employees, suppliers, and investors are considered to be the most expensive asset that must be retained at all cost for competitive advantage. Even though the company seeks to maximize it is earning at all times it acknowledges the need to operate while being socially responsible. The firm endeavors in staff’s empowerment. Based on the fact that it operates in a rapidly changing surrounding and not all of its workers have the ability to education access the firm has introduced training programs to keep the updated (Katherine et al., 2012). Such moves encourage the employees to generally explore all the existing opportunities which promote internal hiring more as the means of retaining the most qualified staffs.

The company operates on the global scale, and its treatment of suppliers and employees is fair. In that, the company profoundly acknowledges the rights of the staffs and thus even though it seeks to operate under minimal expenses it evades issues related to underpayments. Health and safety are also considered since the corporation mainly ensures that the working condition is safe and standardized. In such the workers are highly motivated to be part of the company and follow the set objectives. The company is socially responsible in all its operations. It ensures that the suppliers account for the environmental effects of emissions. The firm is collaborative with all the stakeholders in the reduction of carbon footprint. This is achieved through the regular replacement of inactive systems to ensure energy efficiency. Besides, the company also focuses on the use of renewable energy. The firm has set highest accountability standards that it assists the suppliers in meeting the set levels.

Vision

The company believes that it is on the ground where it is required to produce quality products through innovation. The company seeks to achieve simplicity in general by possessing and controlling the existing technology in all the products. The objective of the company is not to settle for low-quality products while making productive collaborations for the wellness of the industry (Dodobskiy, 2018).

Mission Statement

            The company’s mission statement notes the increasing necessity to integrate safety and health management practices while adhering to the need to offer innovative and high-quality products. The company strives to become the leader in the digital revolution through its physical and online servicing (Dodobskiy, 2018). The company has reinvented mobile products through its revolutionized Apple and iPhone stores.

Corporate Values & Culture

            Apple Inc. tries to embrace diversity and inclusivity as the core of all the organizational culture. Some of its primary values include, excellence, customs, and principles which the company believes are likely to assist it as well as the workers in the achievement of success. Through its corporate culture, it combines several features for the achievement of these values. First, the company focuses on innovation and originality. The firm is one that is centered on the differentiation approach with regard to performance and products designs. Thus, such an approach is one that is highly dependent on creativity (Dodobskiy, 2018). The organization encourages all the involved workers to be highly productive. Inclusion also helps in supporting creativity since individuals hold varying levels of expertise. In all this, the company maintains secrecy which guards it against the competitors as they are unable to duplicate their approaches.

SWOT Analysis

Strengths

            Apple Inc. remains to be one of the most respected and influential electronic brand of all time across the globe. Through its favorite image, the company is able of launching new products consistently with minimal resistance from the market. Also, the company is also retaining its high pricing approach which creates high levels of profit. The strength is one that is held by very few firms given that most companies must lower their prices to attract new buyers. For Apple, this is a vital strength as it brings about flexibility with regard to the company’s ability to change its pricing while still guarding the acquired revenue (Hitt, Ireland & Hoskisson, 2015). Besides, Apple is very authoritative due to its focus on innovation which enables the products users to access digital content at ease. The ability to innovate rapidly has enabled the corporation to sustain the most recent technologies that guard its competitive abilities. With this regard it is particularly challenging to compete with the company has it has acquired a notable share in the market through its extensive global presence.

Weaknesses

            Apple is challenged by its somewhat limited distribution channels given that the company focuses on the principle of exclusion. In that, the company is involved in the selection of the best sellers for its products. Therefore its products are not sold by those that have not sought their permission which leads to inaccessibility in most parts of the globe (Hitt, Ireland & Hoskisson, 2015). This, therefore, illustrates that the distribution is not as useful since it generally lowers the authority of the corporation. Besides, due to the high pricing approach the company is limited to only gaining its revenue from upper-class markets. The market has lesser consumers while the rest are not able to afford the products due to their financial limitation which hinders the ability of the firm to dominate. It is rather evident that the main weaknesses of the company lie in its distribution and pricing approaches which creates hindrances for its expansion.

Opportunities

            Apple can expand more to different nations while increasing its distribution system to increase products availability. In that, the opportunity asserts on the necessity to alter the distribution approach. An extensive distribution approach is likely to assist the corporation in reaching more consumers (Hitt, Ireland & Hoskisson, 2015). Also, based on its resources it can also focus on exploring various products within the electronic segment. It can support this by focusing on innovation which will further sustain its position in the market. The company needs to be aggressive in dealing with the market.

Threats

            The firm’s aggression mainly influences extreme competition in the sector. The sector is dominated by some of the most established companies such as Samsung and Microsoft and they also focus on innovation (Hitt, Ireland & Hoskisson, 2015). Due to the strategic focus of the competitors the firm needs to develop authoritative approaches that guard it against the competition. Besides, the company is faced with the imitation threat since the other companies can copy its approaches and designs. Also due to the intense focus on innovation, the company might suffer from high operating expense thus affecting its profitability. The situation demands the development of strategic approaches that will secure its operations and focus as a whole.

Competition

Apple Inc. is involved in different levels of competition within the computer, mobile phone, and music in general. The company mainly depends on in innovative goods in the development of different operating goods that makes the company somewhat distinct from all its competitors. Due to its focus on excellence, this enables it to set high prices, unlike the competitors. The main competitors are Samsung, OPPO, Huawei, Microsoft and Google since they are involved in the development of similar and innovative goods (Apple-Knowledge, 2017). However, in the computer industry companies such as Dell are involved in the sales of more products while equated to Apple because of their low pricing approach.

Figure 1: Market Competition

Apple-Knowledge (2017)

Management team/Leadership

Following the exit of Steve Jobs in 2011 from the company Tim Cook became the CEO. He was the head of operation before (Richard & Terrell, 2008). The leadership has been successful since the company has retained its competitiveness over the years. However, Cook is in most cases criticized as one that lacks the same ambitions as Jobs. For instance, it is noted that the company has fallen to long lead time which slows its revenue since the company takes long to launch a product which creates more opportunities for others to dominate. At the moment it is noted that the company is facing leadership issues since the CEO sets financial goals that are too intense for the firm to achieve. In addition the company is led by more male and whites respectively which shows that inclusivity and diversity are not supported fully.

Financial Outlook

Apple reported a negative revenue for this year’s first operative quarter. The company sold lesser iPhones that it has been anticipated prior. However, the financial outlook of the corporation is positive since despite the reduction it has not experienced any form of losses. The company forecast a revenue of sixty billion up to sixty two million with a gross rate of between 38 and 39 percent (Aripaka & Nellis, 2018). The company gained 88 billion with a three percent increase. It is expected that the revenue will increase with about 8 percent both for the products and services that it provides. Within the next one operative year the company is expected to experience an increase with regard to all its sales (Aripaka & Nellis, 2018).

Figure 2: Apple’s Financial Forecast

CNN Money (2018)

Strategies

Apple Inc. mainly relies on differentiation business approach. In that the company seeks to differentiate itself from all the competitors by producing products with innovative designs and excellent performance (Hitt, Ireland & Hoskisson, 2015). The focus is to generate products that follows simplicity to enable the users to use them at ease. Through this the company is able to acquire flexibility on the ground that it competes fully on its own something that is very distinct. Unlike the competitors being different means that the company must produce products that are of the utmost quality in general. Thus, the company is fully able to compete strategically. The differentiation approach also applies when it comes to pricing and distribution. The company sets rather high prices due to the fact that the products are digitally developed (Hitt, Ireland & Hoskisson, 2015). The products are only distributed by the individuals or retailers with license. The products are intended to reach the upper class individuals based on the high pricing.

Conclusion

In summing up, it is evident from the analysis above that Apple Inc. is the innovative leader in the electronics industry. The company is one that follows the differentiation approach as it seeks to offer excellent and unique designs in everything that they produce. The company has achieved its success due to having a focused and skilled leadership that encourages creativity. The firm has the opportunities of expanding its market and distribution channels to gain access to more consumers. Even with the success that the company has obtained there is a need to reevaluate its strategies to sustain its position. The pricing and distribution approaches needs to be revisited since the market is rapidly changing. The lead time also should be reduced. In general it is evident that the company has the ability to succeed in the long run over its competitors through differentiation.

 

 

 

 

 

References

Apple Knowledge. (2017). Full Analysis of Apple Inc. Competitors. Retrieved from: http://appleknowledge.xyz/apple-competitors.html

Aripaka, P. & Nellis, S. (2018). Strong iPhone prices, cash plans buoy Apple shares after muted outlook. Retrieved from: https://www.reuters.com/article/us-apple-results/apples-second-quarter-revenue-forecast-misses-estimates-idUSKBN1FL6J6

Bach, B. (2007). Implications of enabling technologies for Apple Inc: Cybermarketing & enabling technologies. München: GRIN Verlag GmbH.

Dodobskiy, J. (2018). Apple Organizational Culture – Secrecy and Maximum Benefit from Human Resources. Retrieved from: https://research-methodology.net/apple-organizational-culture/

Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2015). Strategic management: Competitiveness & globalization; concepts. Stamford, Conn: Cengage Learning.

Johnson, Katherine; Li, Yang; Phan, Hang; Singer, Jason; and Trinh, Hoang. (2012). "The Innovative Success that is Apple, Inc.”. Theses, Dissertations and Capstones. Paper 418. Pp. 1-48.

Khan, U. A., Alam, M. N., & Alam, S. (2015). A critical analysis of internal and external environment of Apple Inc. International Journal of Economics, Commerce and Management, 3(6), 955-961.

Richard, A. & Terrell, E. (2008). Apple Computer, Inc. Company History. Retrieved from: http://www.loc.gov/rr/business/businesshistory/April/apple.html

 

 

Appendices

Appendix 1: Financial Outlook

Retrieved From: http://money.cnn.com/quote/forecast/forecast.html?symb=aapl

Appendix 2: Marketing Management

 

Retrieved From: http://pm01g07.blogspot.com/2014/07/apple-inc-marketing-strategy-     pgdpm.html