Strategic Business Management Research

Introduction

Apple is one of the most successful multinational corporations in the world. The company has revolutionized computer technology, making it possible for every institution, company, and organization to improve the level of technology in their everyday operations. The main focus of Apple Company is to design, create and sell computers, different types of electronics and software as well as offering the related services (Edson & Beck, 2012). Just like any serious company in the world, Apple Company has its mission and vision.

The mission of Apple Company is to make sure that it maintains the highest standards in everything the company is engaged in (Elliot & Simon, 2011). The company is committed to treating employees fairly, providing safe working conditions and employing environmentally liable manufacturing procedures every time Apple products are created. The vision of the company is to manufacture high-quality, economical, user-friendly products that integrate high technology (Lashinsky, 2012). The company is committed to creating products that do not bully non-computer experts.

 

The company has been growing at a very high rate. The growth accelerated in the year 2001 when the company introduced its iPod mp3 player into the market (Elliot, 2012). Apple Inc. is always considered the most flourishing electronics company in America and around the world. Apple has introduced the most preferred products that have changed the lives of many people.

For instance, the company has introduced Macs, which are considered the best personal computers, together with OS X, iWork, iLife and professional software (Edson & Beck, 2012). With its iTunes and iPods online store, Apple remains on the top as far as digital music is concerned. Having reinvented mobile phones through its innovative iPhone and App Store, Apple is defining the prospect of the mobile industry and the computing field.

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Background Information

Apple Company was founded by Steve Jobs and Steve Wozniak in 1976. Their joint venture started several years before Wozniak, a gifted self-taught electronics engineer, started creating boxes that enabled them to make phone calls for a long-distance for free. These boxes attracted a number of customers since they helped people communicate more effectively than before (Elliot & Simon, 2011). Their partnership was important in the realization of the vision of creating personal computers and innovative phone industry.

On April 1, 1976, Steve Jobs and Steve Wozniak started the venture of creating and selling personal computers (Elliot, 2012). The business was integrated as Apple Computer Inc., which was later renamed as Apple Computer on January 3, 1977. The name was changed later on January 9, 2007, to Apple Inc. in order to replicate its shifted focus in the direction of consumer electronics (Elliot & Simon, 2011). Apple is the second biggest information technology company worldwide by income after Samsung Electronics (Lashinsky, 2012).

By the end of 2014, Apple Company had employed 72,800 permanent full-time workers and maintained over 437 retail stores in more than fifteen countries across the world. These employees also run the online iTunes Store and Apple Store, the former of which is the world’s biggest music retailer (Elliot, 2012).

Apple’s international yearly revenue in 2014 was about $182 billion. Apple Company always benefits from a towering level of brand loyalty (Elliot & Simon, 2011). According to a report by the Interbrand Best Global Brands the 2014 edition, Apple is the world’s most precious brand with an appraisal of $118.9 billion (Lashinsky, 2012). By the end of the year 2014, the company continued to deal with significant denigration concerning the labor tradition of its contractors, in addition to its business and environmental practices, together with the origins of supply materials.

Planning Methodologies Utilized by Apple Company

In order to make the company successful, company management employs some management methodology. The first strategy is pricing the product to customer segments. The company is always careful about the price it charges customers for its products. It ensures that the price of most products is affordable to the customers (Elliot & Simon, 2011). Additionally, the company always reduces the price of the old version of a certain product once a new version is released.

Another management methodology is focusing on the future. The management team at Apple Company is always concerned about the future. Thanks to this kind of thinking the company can continue introducing inventive products (Edson & Beck, 2012). The company always thinks about the future so that it can cope with technology development. Also, the company is able to beat off competition from rival companies.

Listening to the customer is another methodology that is employed by the Apple Company. The company has created different channels that help customers to air their concerns, opinions, and suggestions (Elliot, 2012). This helps in ensuring that the customers are always heard and their views and suggestions are considered during the new product development.

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Apple Strategy

There are important strategies employed by Apple Company in its attempt to realize the competitive edge. One of the strategies that Apple Company has employed is the use of robots in the production process of different products. In the attempt to produce a huge amount of products and reduce the cost of production at the same time, the management at Apple Company always considers using robots in the production process (Elliot & Simon, 2011). This has helped the company to continue producing high-quality products in large quantities.

Apple employs the most appropriate strategies in order to promote its products. The first marketing strategy employed by Apple Company is penetrative pricing. In this strategy, Apple Company sets a reasonably low price in order to increase sales. The company employs this strategy every time a new product is introduced into the market (Edson & Beck, 2012). The aim of doing this is to persuade customers to buy new products from Apple Company. The next pricing strategy used by Apple Company is price skimming. In this strategy, the company sets a fairly high price in order to increase profit margins. This strategy is also used when the Apple Company is introducing new, high quality, exceptional products.

The use of robots has been had been an effective strategy since it helped the company produce goods in large quantities. Apple is able to meet customers’ demand for most of its products (Elliot, 2012). This strategy has helped the company increase its supply and ensure that all orders are delivered on time.

Marketing strategy employed by the Apple Company has been effective in increasing the customer base. With the increase in the customer base, the company has been able to increase sales of many products (O’Grady, 2009). This has helped the company to continue conquering the new market. Through the use of customer-friendly prices, the company has persuaded many customers to buy its products.

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Apple Customers and Competitors

Apple customers include different individuals and companies from different parts of the world. Apple customers are people of different ages. The company produces products that can be applied by people who are not necessarily computer experts (Elliot, 2012). This ensures that all people can purchase the desired products from the company.

There are other companies that compete with Apple Company for customers. In the computer and mobile devices industry, there are a number of companies that produce similar products. These companies include Samsung, Nokia, Asus, Dell, Acer, Hewlett-Packard and Lenovo (Lashinsky, 2012). The company’s biggest competitor is Samsung. Unlike other competitors, Samsung focuses on the production of computers and mobile devices, just like Apple Company. Having been in the world market for an extended period, Samsung has mastered the art of computer and mobile devices production (Elliot & Simon, 2011). As a result, Samsung has realized the competitive edge, which has presented a huge competition problem to Apple Company.

Organization Formal Structure

Every company has a well-outlined formal structure. Thus, being one of the fastest-growing companies in the world, Apple has a formal structure. The company management is arranged according to this structure. Since the company was created, it has focused on maintaining a unique technique of overseeing its organization (Elliot, 2012). Apple Company operated in relation to the perception of informal business culture in the technology industry. The company has preferred a flat organizational informal structure instead of a vertical structure. Apple’s commercial culture is an exceptional corporal method that is only applicable to the company. Although the traditional organizational culture has been regarded as useless by most companies, Apple can attribute its success to the employment of the traditional organizational structure.

The flat structure has been considered the best organizational structure for Apple Company. This organizational structure is suitable for the Apple Company since it is effective in relation to innovation and empowerment (Lashinsky, 2012). Rules and regulations in this structure are easier and faster to execute, so there is improved coordination.

Apple’s organizational structure includes the head of the company, Tim Cook. Tim Cook took over the company after the death of Steve Jobs in 2012 (Lashinsky, 2012). After the CEO, there are other nine major sections in the company organizational structure.

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Decision Making Process

In order to stay competitive in the local and world market, the company must have the most accurate decision-making process. In Apple, the decision-making process starts from the top of the company’s management (Elliot & Simon, 2011). It is the CEO who comes up with a new idea and allows other members in the management team to make a contribution to how the idea can be implemented.

The heads of the departments always air their suggestions and views on how the new idea can be turned into a new product or service. They assess any decisions made by the top leaders and report back in order to make sure that only the most important decision is passed and implemented in the company (Edson & Beck, 2012). In Apple, every department deals with a specific aspect of product creation, for example, software, hardware, marketing, and database management.

In order to make sure that no one is left out in the decision-making process, the Apple Company ensures that the views and opinions of every individual are considered. This allows clients, employees and other stakeholders in the company to make a contribution to decision-making. When all company stakeholders are allowed to take part in the decision-making process, they always feel valued and thus are motivated to work hard.

The Way in Which the Company Manages Change

In order to remain at the top in the world market, the management team at Apple realizes the importance of managing different changes. In this dynamic world, everything is constantly changing. The company has developed a culture of managing change (Lashinsky, 2012).

The main approach that Apple has employed is introducing more innovative products into the market. The key change in the mobile and computer industry is the improvement in the level of technology (Elliot & Simon, 2011). Any improvement in technology in this industry makes the old product obsolete. In order to manage this change, the company continues producing new products that correspond to the latest technology.

Another way of managing change is the adjustment of the price of different products. Price is the key aspect that determines whether consumers buy a product or not. With the increase in competition in the world market, Apple has come up with a strategy of adjusting the price of their products in order to make them competitive (Lashinsky, 2012).

Another way that the company manages change is the production of products that meet the need of all customers. The company always creates products that solve the problem of most people in the community. Additionally, the company produces products that have the desired features (Edson & Beck, 2012). This ensures that both the mobile and computer devices from Apple have an equal number or even more features than devices from other companies.

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Leadership Style

Every company employs different leadership styles. The management team always selects the leadership style that best suits the company. Apple employs a democratic leadership style. This style ensures that all stakeholders in the company make a contribution to leadership and management functions (Lashinsky, 2012). In Apple, this leadership style ensures that the interests of clients, suppliers, and employees are considered before any management action taken.

The organization’s heroes in the company are the individuals who created this amazing company. These individuals include Steve Jobs and Steve Wozniak (Elliot & Simon, 2011). These individuals are thought to be the company’s heroes due to their substantial contribution to the company.

The key motivational environment in Apple is the freedom of being innovative. The management at the company allows all individuals to come up with ideas that will help the company move forward. All imaginative and creative individuals are always supported in order to ensure that their ideas are considered in the development of different products (Lashinsky, 2012).

Apple always maintains effective communication in order to ensure that all the company actions are communicated. The management team encourages all the company stakeholders to ensure the use of the right channels of communication. There are various channels employed by the company to ensure effective communication. These channels involve the use of memos and other communication media that ensure that messages are conveyed effectively. It is always necessary for the company to ensure effective communication (Lashinsky, 2012). Effective communications help to minimize errors during the production process and, as a result, ensure that high-quality products are created. Given the effective management used by the company and the high-quality products, it can be concluded that Apple uses effective communication.

In Apple, the management team has been able to use departmental meetings as a form of communicating ideas. Through departmental meetings, different individuals are able to air their views and suggestions. Additionally, the heads of the departments are able to speak to the target audience (Lashinsky, 2012). This ensures that the intended message reaches the target individuals effectively and timely.

Telephone calls are also used as a form of effective communication. In Apple, different stakeholders effectively communicate through phones (Edson & Beck, 2012). This improves the effectiveness of communication since messages are sent instantly and received on time.

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Process Control

In order to ensure that the company realizes the set goals, it is always important to establish set process control. The company has employed different types of control in order to ensure that all goals are realized and the product created by the company meets the set standards (Edson & Beck, 2012).

The type of process control employed by Apple is administrative control. The company has laws, policies, regulations, and guidelines that manage the inclusive requirements and controls for the production system (O’Grady, 2009). Additionally, the company has a logical control process. The key focus of logical control is the regulation in systems and software used by the company such as firewalls, encryption, anti-virus software, and checker application procedures.

In addition, financial control is employed to ensure that all finances in the company are accounted for. Managers in Apple use financial statements in order to make decisions on the amount of capital to be spent in a given area. The company is careful about the process of budgeting (Lashinsky, 2012).

There are operational controls employed by Apple. These controls ensure that the company carries out its operational activities effectively. In the company, operational control involves control over the implementation of the regular business procedures but does not involve control over the tactical business targets or business priorities (Edson & Beck, 2012).

The key role of information systems relates to data collection, data management, and data security. The company has employed the Business Intelligent System. This system ensures that all data generated by the company are collected and securely stored for future use (Bentley & Barrett, 2012). This helps in ensuring that the data are always available to be used in the decision-making process.

Ratios

Apple has a clear balance sheet. Thus, the company has a small debt to equity ratio. In 2014, the company had a total debt to total equity of 31.64 (John, 2015). Since the company has no debt, it has the capacity to accumulate its earnings and revenue and use it to fund development projects (Lashinsky, 2012). Due to the favorable financial performance of the company, Apple has a high quick ratio. In 2014, the company had a quick ratio of 1.05 (John, 2015). This is an important factor to investors, customers, and suppliers because the financial performance of a company portrays its strength and value.

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SWOT Analysis of Apple Company

The main industries served by Apple include computer hardware, consumer electronics, computer software, and digital distribution (O’Grady, 2009). Every business has its strengths, weaknesses, opportunities, and threats to its development strategies. In this part, the paper will focus on outlining the SWOT analysis of Apple.

Strengths

The first strength of the company is customer loyalty. Apple always benefits from customer loyalty in most of the company’s products. This company produces a variety of products, including software, apps, personal computers, and iTunes (Bentley & Barrett, 2012). Due to the quality of these products, customers always prefer them over similar products from other companies. This has helped in increasing the company’s competitive advantage.

Apple Inc. is regarded as the top innovator in mobile device technology. Having been in this business for decades, the company has mastered many things in mobile device technology. The company’s core proficiency in producing ground-breaking products is the strength while the firm is capable of bringing the most inventive products to the market (Scott, 2008).

Another strength of Apple Inc. is its brand reputation. It has the status of a company that produces highly inventive, well-functioning and well-designed products and has a perfect business performance (Bentley & Barrett, 2012). The value of the Apple brand is estimated to be about $76.5.

The focus of the company on retail stores is another strength of the company. Apple’s retail stores maintain high-quality client experience; offer direct contact with well-informed staff and improve brand awareness (O’Grady, 2009). In addition, Apple’s stores are most lucrative in terms of sales/square feet.

Another strength of the company is a strong advertising and marketing teams. Marketing is an essential and efficient area Apple has (Bentley & Barrett, 2012). It can retail pricier products, create superior stores and promote its products in a persuasive manner.

Weaknesses

The high price is a major weakness of the company. Apple’s products rate much more expensive compared to its competitors’ products (Bentley & Barrett, 2012). Some critics argue that the price is not reasonable. When there is such a severe competition in the market, the charges of Apple’s products become a weakness since consumers can simply settle for cheaper products of similar quality (Scott, 2008).

Inappropriateness with the different OS is another weakness of Apple’s products (Bentley & Barrett, 2012). OS X and iOS are relatively different from other OS, for example, Microsoft OS. As a result, hardware and software users always choose to remain with their usual software and hardware (O’Grady, 2009).

Another weakness changes in management. The company lost Steve Jobs in 2012 and, as a result, Tim Cook took the position of the company’s CEO. John Browett and Scott Forstall left the company as well. This is likely to have a negative effect on the company's administration.

There is still the weakness of the decline in the long-term gross margin. At the moment, Apple's gross margin is among the top in the technology industry, but analysts project a decrease in the margin due to competition and component prices (Bentley & Barrett, 2012). There might be a reduction in the company’s future financial performance.

Opportunities

There is an increasing demand for the iPhone 5 and iPad mini (Bentley & Barrett, 2012). IPad mini sales can increase Apple’s market share (O’Grady, 2009). This will, in turn, increase the tablet market and, as a result, reinforce the firm’s competitive advantage (Scott, 2008). The growth of smartphone and tablet markets is a perfect opportunity to increase the company’s share in these markets.

Another opportunity is the strong expansion of mobile marketing. Apple has introduced the iAd marketing platform, which makes it possible to advertise on iPad, Apple iPhone and iPod touch (Bentley & Barrett, 2012). The growth of mobile marketing can be exploited in order to increase company earnings.

An increase in the demand for cloud-related services provides another opportunity for the company (Bentley & Barrett, 2012). Apple could increase its variety of software and iCloud services as the demand for cloud-related services is increasing.

Threats

The world is experiencing rapid technological development (Scott, 2008). This is a ruthless threat that Apple and the other companies in the technology-related field are facing. The company is always under pressure to introduce new products sooner and faster. Apple has been able to introduce very inventive products into the market to date, but in the meantime, the company has not disclosed any strategies for future products, apart from iTV, and may lack future products to keep pace with the competition.

Another threat of Apple is the price pressure from Samsung (O’Grady, 2009). Samsung has previously asked Apple to recompense a higher value for its application processors (Bentley & Barrett, 2012). As a result of extreme competition and no feasible substitutes, Apple may be compelled to pay even more than it is already paying.

The growth of Android OS presents another threat to Apple. Android OS is currently the main challenger for iOS in the mobile appliance market (Bentley & Barrett, 2012). The supremacy of Android reduces iOS power over influencing customers to join Apple.

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