Posts Tagged ‘Organizational Management’
Apple Case Study-Business Level Strategies
Apple Inc has over the years being enjoying overwhelming performance in the technology industry, whereby it has demonstrated market leadership and excellence. The company’s early entrance in the technology industry has been closely associated with its continued success and dominance. It is worth noting that the company has rarely succeeded following its early entrance in the market but as a result of efficient organizational management. It is notable that the business strategies adopted by the company have been the main elements of its survival and success in the market. This is evident through the numerous initiatives of new-market disruptions among its products and services. This has widely impacted on its competitiveness, thus contributing to success. The company has been acknowledged for reaching consumers who were unavailable to its predecessors. This is majorly through clever marketing, ease of use, good design as well as smart distribution. As a result of these characteristics, the company has been able to attract and maintain a high range of consumers thus boosting its success and sustainability. This paper will provide an explicit discussion and analysis of Apple Inc Business level strategies.
Identification and critical evaluation of the company’s existing strategies
With reference to the dynamics and competition faced in the technology industry, there has been every need for the participating companies to demonstrate efficiency in their operations (Boddie 2005: 1). In this case, Apple Inc has not been exempted, whereby it has long established business strategies that guide its operations. The establishment of strong corporate mission and vision has been a vital tool giving light to the business future (Rafter 2002: 1). This has motivated the management to come up with strategies that will help in realization of the company’s vision. Apple business-level strategies have been focused towards enhancing performance.
Cost leadership strategy has been highly adopted by Apple Inc in its endeavors of ensuring competitiveness and success in the technology industry. The company’s management has been able to draw policies and strategies that are aimed at ensuring that the company is the lowest cost producer and distributor (Roth 2001: 24). By strategizing on cost efficiency, the success and sustainability of the company is enhanced. By lowering the cost of production and management, Apple Inc has been given golden opportunities on determining prices of its products, thus enhancing its competitive edge. Lower cost of production and distribution has enabled the company to put competitive prices on its products as well as enhancing its gross profit margins (Bowerman and Wart 2011: 63). Some of the practices adopted by the company in executing the cost leadership strategy is through minimization of operating costs, lowering distribution costs, tight control on labor costs as well as reduction of input costs.
The concept of differentiation has also been widely adopted by Apple Inc in enhancing its competitiveness and profitability. This has been achieved through designing and production of unique products (Furrer 2010: 231). The aspects of advertisement have also been adopted in ensuring product differentiation from competitor products. Despite that differentiation has been a cause of higher costs to the company; it has enabled it to distinguish its products and services from those of competitors. It is worth noting that differentiation has enabled the products of Apple Inc to appear unique, thus fetching higher markets (Ireland et al 2008: 124). Apple Inc has been much conscious about the increased costs following the adoption of differentiation, thus enabling it to maintain its competitiveness.
Focus on particular market niche
The focus of Apple Inc on digital music environment has been a vital element of success and innovations. This strategy of specializing and putting more focus on digital music has reinforced the company’s competitiveness in the digital market. Specialization in this product line has been aiming at capturing the young generation. Unlike other companies, the products of Apple Inc have bee widely focused on the young generation as well as the elite. This is much evident through iMovie, iTunes as well as the GarageBand. Focus on these products has influenced new innovations like the 18th-month-old music editing software. Unlike competitors who are characterized by concentration on broader range of customers and products, the company has been able to enhance differentiation and cost leadership. By so doing, the competitiveness and profitability of the company has been enhanced, thus leading to its present success (Ireland et al 2008: 124).
Consideration of business model redefinition
The business environment has in the current past been undergoing tremendous changes and revolutions. This is closely related with the aspects of globalization, liberalization of markets as well as advancement in technology. In regards to these developments, increased business activity has been witnessed, thus leading to increased competition (Lussier 2008: 51). In the case of increased competition in the technology industry, Apple Inc has not been exempted thus leading to declining performance. Based on this insight, there has been every need for the company to redefine its business model (Anderson and Phillips 2000: 34). This will not only ensure its survival but also boost success and sustainability in the market.
The potentials of Apple Inc have not been optimally exploited thus inducing the need for change. Over the past decade, the company has not adequately addressed the need for diversification (Brown 2010: 187). This is very evident through the limited product and services dealt with by the company. Despite that limited diversity of products and services enhances specialization and efficiency; it is also a big threat to the stability of the company. This is in consideration to the rapid increase in competition in the technology industry. New companies are showing interests in the production and distribution of computer products and services (Lussier 2008: 51). This poses significant pressure to Apple Inc, thus calling for the need of redefinition of the business strategy.
Need for growth
The company has not reached optimum performance, thus the need to redefine its strategies to enhance performance. This will help in expanding profits, sales, market share, market coverage, product mix among other market and accounting variables (Hill and Jones 2009: 345). Some of the strategies for enhancing growth include enhancement of market penetration by ensuring provision of efficient services. Vertical integration is also an efficient strategy for enhancing growth, whereby Apple Inc may take activities performed by its suppliers or business in its channel of distribution. Diversification strategy can also been an effective move by the company to enhance its growth. In this case, the company may look for potential business ventures to enhance its operations (Hill and Jones 2009: 345). The company’s resource endowment gives it a chance of diversifying its operations thus reinforcing its competitiveness.
Need for stability
With regards to the dynamics and competition in the technology industry, there is every need for Apple Inc to redefine its strategies so as to reinforce its stability. This is an efficient strategy in countering the forces of its competitors as well as guaranteeing sustainable growth and development. The stability strategies are nothing new but rather a continuation of the existing strategies. Some of the key activities to undertake in executing these strategies include restructuring of the management and organizational model. This is aimed at ensuring sustainable and efficient management and leadership within the organization. Market research and development is also a vital component in ensuring stability, whereby the company will be able to ensure market orientation (Gibbert 2010: 124).