Good Research Paper About Apple Strategic Analysis & Competitive Planning
This paper examines the strategy of Apple and how it helps the company to compete in the computer and electronic industry. It will review the central strategy and how it is applied to achieve strategic goals and competitive advantage. The paper will end with a presentation of recommendations on how to improve and enhance the competitive position of Apple
Apple’s Mission, Vision and Values
In the year 2013, Apple announced that its mission is to design the best personal computers and professional software and also lead the digital music revolution with their iPods and online stores. Therefore, the main reason why Apple was set up was to provide innovative computers and software that could make them global market leaders in the field of personal and professional usage as well as the provision of the best platform for music.
The vision of Apple is captured from the CEO’s interview with CNN and this indicates that Apple is meant to create great but simple products through constant innovation by owning and controlling the primary technologies of the products and also engaging in markets where Apple has its greatest strength through collaboration and constant growth. This shows that Apple is focused on specialization and innovation as well as partnering with the best entities to deliver value to consumers through excellence.
Apple’s official values that guide their activities are:
The value of simplicity is about designing products that consumers can easily connect with and build an affinity to. This is done through innovation which essentially perfects the technology. Finally, customer satisfaction and the need to meet all the needs of consumers at all times is the main driving factor of the company’s activities. These pointers of Apple are reflected by their statement which reflects their processes as “Think Different”.
The strategic plan of Apple is good and customer-focused. It helps to deduce the needs of consumers and provide them in ways that they can best appreciate it. However, there is a major problem with the fact that everything is focused on product development. This is because all the options and all the features presented in their strategy is about how to create more products and present them to the consumers and get them to appreciate it. There is little done to look at other angles of innovation, like focusing on things that enhances the values of other aspects and other elements of society.
Apple’s Strategic Goals
When Tim Cook took over from Steve Jobs in 2012, he announced a series of strategic goals that are meant to influence Apple over the next decade or so. And this includes the following:
Focus on successful products – the tablets, iPhone, iPad, iPod, laptops and computers;
Enter emerging markets like the BRICS (Brazil, Russia, India, China and South Africa) with leading products like tablets and iPhone;
Achieve greater stakes in the quest to achieve patent rights over great and innovative products and apps;
Open up the company to a selected group of journalists and media houses to build connection with the public and enhance reputation;
Relative Alignment of Strategic Goals with Apple’s Mission, Vision and Values
The first three pointers raised above are the top three strategic goals. These reflect deficiencies in the alignment with the mission, vision and value which are centered around products without emphasis on other aspects of the company which are equally important. The idea of focusing on patents only suggests that Apple is still pursuing a “soft” strategy as opposed to the hardware oriented leadership that its competitor, Google has focused on in recent times. This puts Google at risk of losing out to competition to their more balanced competitors.
Secondly, there is a problem with the ability to simplify and innovate in emerging markets because these emerging markets have different cultures. In countries like Brazil and China, what Apple is going to do is to essentially export ideas that were tested in the United States. Therefore, these ideas may turn out to present Apple in a negative and bad light. Already, Apple had serious and major issues with the use of cheap labor in developing countries like China. Therefore, entering the markets of these countries without much care and emphasis on localization of innovation will create a strategic misfit of the vision with the realities.
The fundamental focus is on the tablets and iPhones which are the most successful products in the Apple range. This comes with a major risk of attaining imbalance because there are some relatively good niches and sectors that are coming up. Focusing on investing in successful products today puts Apple at a high risk of falling into a strategic drift. A strategic drift is a situation where a firm which had enjoyed considerable success reacts slowly to major changes in the market.
External Environmental Analysis
The PEST model of strategic analysis is important and vital to check the political, economic, sociological and technological elements of an organization and its environment. These are relevant for Apple in its current growth.
Political: The main political risk faced by Apple currently has to do with the uncertainties of the Eurozone and the elements of terrorism that plagues the world. This is because Apple has many outsourced units in these countries.
Economic: The slowdown of emerging markets, including Brazil and China are major concerns that Apple might need to deal with. However, the economy of the US remains strong whilst that of Europe is falling. This also provides major issues.
Sociological: Apple has an advantage because the world is moving towards a status where more people are willing and able to afford luxurious products and goods. This gives Apple a relatively strong competitive position that can help it to promote its products in existing as well as new markets.
Technological: There are many technological firms that are opening up which offers a strong and a solid opportunity for Apple to enter as a business-to-business entity.
Internal Analysis of Apple
Internally, Apple’s features show that it has built a strong and loyal customer base who will always be willing to use their products. This is complemented by the fact that Apple has expanded and closed off all the different units and other possibilities for competitors to enter their areas and other parts of their markets. This shows that they have a major advantage and runs almost a monopoly in the areas they truly focus on.
Secondly, Apple has a strong innovation system through the combination of the best human and other resources for the achievement of the best of results. This makes it a leading entity and an independent one that has built a strong brand and has the ability to stay on top of the markets.
Apple also has a major profit and asset base. Apple has a capital base of US$715 billion and it made revenue of US$33 billion in 2014 and posted a profit of US$70.54 billion. This gives it a lot of potential to grow and expand to new and relatively unknown markets and business activities.
Apple controls a large network of retail stores around the world that gives it a lot of potential and promise in capturing and holding on to the markets. This is complemented by the creation and maintenance of a very strong and popular brand that is known around the world.
However, Apple is gradually becoming a brand of ostentation and their prices are very high, even in poor countries around the world. Apple has not done so well in promoting and maintaining proper patents on some of its products hence, they are losing out in major lawsuits.
Further Strategic Analysis
There are further elements and aspects of the operations of Apple that are significant and have an impact on the firm. These are discussed in the sub-headings below:
Differentiation refers to the process whereby a firm uses capabilities and abilities to present something that is completely different from other entities on the market. This is done through the presentation of phones that are of sufficiently high quality products that are different from the other stakeholders on the markets. This is at the center of the strategy of Apple and it is demonstrated by the fact that Apple’s products are presented in an ostentatious fashion and manner. This allows Apple to position itself ahead of its competitors.
Apple’s internationalization strategy is not very well laid out. Their approach is more of an Americanization of countries around the world. They do very little to adjust their products to local standards and expectations, save for the change of the language and the software tools and elements. Therefore, Apple is seen as one that is imposing its plans and strategies on other countries and other markets. This could potentially turn out to be detrimental since some countries and economies are beginning to boycott anything American. Therefore, there is the need for some kind of localization in the markets they are entering.
Quest for Competitive Advantage
Apple’s quest for competitive advantage is steeped in the fact that they seek to control the markets and gain relative strengths over their competitors. They do this by controlling innovation and continuously seeking to meet the needs of consumers in areas that they have the relative strength.
Recommendations for Strategic Alignment in Apple
The first recommendation that is appropriate to amend the vision of Apple is to diversify and try to focus on other markets for strategic stability. Apple has been doing very well by focusing on consumer needs and providing them. This is problematic and must be reviewed and analyzed.
Secondly, there is the need for Apple to consider its approach to serving consumers. There are new emerging trends and processes that could predict major issues and problems. Therefore, there is the need for the strategic planning to include other third party views as opposed to just focusing on what consumers want. It must transcend its market-oriented strategy to one that focuses on stakeholders. Apple will have to respond to competition and focus on a more balanced production system. This will include the integration of hardware and the integration of more units that are proven to be problematic in the past.
Finally, Apple will have to enter the emerging markets more carefully than they have been doing until recently. This includes the need to study the markets and identify their genuine needs and eliminate Americanization to localize and make the best of local conditions.
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