Amir Tehseen

Roll no MBH-12-01

9/22/2015

2015Apple Inc corporate strategy making

Apple incVision Statement of APPLE

"Man is the creator of change in this world. As such he should be above systems and structures, and not subordinate to them."

Mission Statement of APPLE

“Apple designs Macs, the best personal computers in the world, along with OS X, I-Life, iWork, and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple reinvented the mobile phone with its revolutionary iPhone and App Store, and has recently introduced its magical iPad which is defining the future of mobile media and computing devices.”

Values

As stated in (apple investor, 2012) Apple Values are the qualities, customs, standards, and principles that the company believes will help it and its employees succeed. They are the basis for what they do and how they do it. Taken together, they identify Apple as a unique company.

These are the values that govern Apple’s business conduct:

Empathy for Customers/Users

Aggressiveness/Achievement

Positive Social Contribution

Innovation/Vision

Individual Performance

Team Spirit

Quality/Excellence

Individual Reward

Good Management

External Analysis for APPLE Inc.

External environment determines the present situation of Apple Inc., and also helps find out the possible influences of the political, economical, and social and the technological factors on the organization.

PESTL Analysis for Apple Inc.

Political Factors

As stated in (CNetnews 2012) Apple Inc. has reportedly obtained 52% of its business from outside US in 2007. Due to the bad international relations, wars and terrorism might influence Apple Inc. in a huge way, and also the organization has no control over these factors. Apple Inc. manufactures a number of its parts and products from outside the US, like Czech Republic, Ireland, China, Korea and Cork. The bad political relations between US and the other world have bad outcomes for the Apple Inc. (CNetnews, 2012).

Economic Factors

By the (Apple Inc., 2012) The global economic crisis had huge impact on Apple Inc. The inflation rate went high and so did the unemployment rate in the country, and since Apple Inc. products were viewed as luxury products, the customers started pending less on them. US dollar value keeps fluctuating, and thus again which have a bad impact on Apple Inc. products, however the company has purchased itself foreign currencies and thus, the economic effects on the company are minimized. Thus, Apple Inc. revenue has increased in the global market.

Social Factors

Throughout the history of Apple Inc., two factors have been on the forefront of Apple Inc. products, the quality and the design of the product. Thus, globalization plays a very important role in Apple’s products. As the world cannot be imagined without the gadgets, thus Apple products have marked their presence on the international market. Also, as the purchasing power of the common has risen in various markets across the world the purchasing of luxury products have gone up, for e.g. the iPhone, iPods and the latest technology iPad. Possessing these items is considered as status symbols in many societies which have also increased the sales of Apple Inc. products. Another big social influence to Apple Inc. products is the rapid growth of the music industry, which have increased markets over the cyber space as well. The main virtual music store is the iTunes. Thus, in all Apple products have benefitted from the social factors as it has begun defining a modern individual lifestyle.

Technological Factors

Apple Inc. has invested largely in its product research and development field and thus, Apple products are at the top of the new innovative products ranking. Apple Inc. has invested largely in its product research and development field and thus, Apple products are at the top of the new innovative products ranking. The technology has been fast changing in the world and the market for it has become gigantic, which has added to more and more competition and thus, as soon as technological change are concerned the product life cycle has been shortened drastically, which the Apple Inc. takes the advantage of by introducing newer products in the market, which ultimately lead the market.

Legal Factors

Nokia has filed various lawsuits against Apple Inc., claiming the violation of 13 additional patents by iPhone, iPad and iPod touch, this apart from US complains covering 24 Nokia patents. Also, in China Apple Inc. has been fighting the battle for its right to the iPad trademark.

SWOT analysis for APPLE Inc.

SWOT analysis stands for Strength, Weakness, Opportunity and Threat for a particular organization, which can help in formulating a strategy for its business and can also help in analyzing its internal environment (Strengths & Weakness) and external environment (Opportunities & Threats).

Strengths

According to (Wharton, 2012) the first and foremost strength of Apple Inc. is its technological edge over its competitors. IPhone have turned out to be a great success and has been associated with status in many of the countries. ITunes has turned out to be a wonderful revenue generating source and since it also sells with its own tool i.e. the iPod, thus, revenue has multiplied for Apple Inc. Another strength for the organization is that for every software that Apple Inc. produces, it introduces its hardware with it too, which leads to its expertise in both the industries. Apple Inc. products are classified as luxury items, thus its products provide enough room for it, so that the competitor products are no longer a competition. The another strikingly advantage over competitor’s products, is the design of the Apple products, and which are also simple to use. The brand loyalty of its product and its super dedicated research and development department are also its major strengths.

Weaknesses

Weaknesses are the disadvantages that are hindrance in obtaining the business goals for the organization. The poor relationship with the market than Microsoft is surely a disadvantage to Apple Inc. Another point could be that the products introduced by Apple Inc. have very short life cycle, which concludes that the research and development department has to be constantly maintained, which requires huge capital. Apple Inc. has very low presence in the advertisements, and also it has very small market occupation as compared to its main rival Microsoft. Thus, all this leads to the fact that Apple Inc. gets very less business from its home country US, and major of its business is from outside the US.

Opportunities

According to (Marketingteacher, 2012).Opportunities can affect both the present as well as the future condition of an organization. Apple Inc. opportunities are the introduction of more and more PC viruses, on which Apple Inc. can capitalize on. The second opportunity is the population of the world is growing at a rapid pace and thus, this opens the front for many new markets, also the purchasing power of a common man has increased drastically, who can be

pursued or impressed to buy the luxury Apple products. The online sales of the organization are increasing and also, the bonds and the partnership with the other organizations have been on the rise in the past few years. Products such as iPhone have create a new set of potential customers altogether which can be targeted in the future i.e. the young population who have a craze for any new technology gadget (MarketingTeacher.com 2012).

Threats

In the past few years, many competitors have come up for Apple Inc., especially in the field of laptops, like Dell, Sony, HP, and Toshiba. Another threat could be that many of the customers have started downloading the music for free instead of purchasing at iTunes. The product expensiveness is itself a threat to the product, as substitutes at a lower price are always available. Long lasting recession could also be a threat to its products. Windows 7 software is gaining more market place after vista flopped and last but not the least, the technological advances that have been taking place every single day, is a big threat to Apple Inc.

Porter’s Five Forces Model

Porter’s Five-Forces Model of competitive analysis is a widely used approach for developing strategies in many industries. The intensity of competition among firms varies widely across industries (David, 2011).

Porter’s Five Forces Model for APPLE Inc.

Porters Five force Model is a very powerful tool to understand the core of the power in a business or in a company. The Porter Five Force Model for Apple Inc. is shown below:

Model 1: Showing Porter’s Five Forces Model at APPLE Inc.

VRIO framework

The VRIO framework can be stated as the value, rarity, imitability, and organization as a whole. VRIO framework is extremely important for the internal analysis of Apple Inc organization.

Resources and Competencies

Value Rarity Imitability Organization Competitive Advantage

Brand Name Yes Yes Yes Yes SustainedSimplicity Yes No No Yes ParityHardware Yes No Yes Yes TemporarySoftware Yes No No No Parity

Model 4: Showing VRIO for APPLE Inc.

The above figure shows the VRIO framework for Apple Inc. For gaining competitive lead over its competitors Apple Inc should explore its internal as well as the external advantages, its internal advantages that Apple Inc paid attention to on developing iPhone, are its brand name, advanced technology, and effortlessness of using the user interface (Applecasestudy, 2009).

Value

The value of iPhone is that there are a number of advantages, like the highest technology, the fast and the easy usage, that the user can carry, all in one device when he/she purchases the iPhone.

Rarity

The technology that has been used in making of the iPhone is rare and unique, which is why it has a unique design, quality, easy to use and is also a status symbol among the youngsters however, it has been experiencing slow internet connection and call dropping problems, which can make Apple Inc lose some customers, which was found to be a problem in the chip that handled the call operations, meanwhile the publicity and status of owning an iPhone will keep the customers intact.

Imitability

The iPhone is nearly not imitable, however there are some phones available in the market which provides some of the features same as that of the iPhone, also, the companies which have seen the flaws in the iPhone development can refrain from committing it and thus can come up with better designs, which can be a threat to Apple Inc. For e.g. Google has released its phone T-Mobile G1, which can be a competition to iPhone in the future (Applecasestudy, 2009).

Organization

Apple has tried its best to maintain its brand name and has been successful in doing so and thus is its biggest competitive advantage, however its flawless designs and quality are still replicable in the future and thus Apple should take advantage of applications market, however as with

iTunes which were the best and easiest music application, same approach would not work with iPhone.

Thus, Apple holds a huge and stable market however it constantly needs to update on its methods and technologies to grow further.

SWOT Matrix for APPLE

S-O Strategies

• Increase awareness through the web of the immunity of Mac products to worms and viruses. (S5, O1)

• Advertise using individuals that will link Generation X & Y to the iTunes and other related products. (S1, O2, O4, O5, O6)

• Using movies and music groups that are geared towards Gen X and Y to promote computers and laptops. (S3, S5, O2, O5, O6)

S-T Strategies

• Increase and promote the compatibility to Window operating system. (S5,T1)

• Promote the originality of Apple computers and the different style and stable system that is slightly more but worth the price difference in style, stability and speed. (S2, S5, T2, T4, T5)

W-O Strategies

• Increase ties with Microsoft and Intel and their products.(W1, W2, W4 O2, O3)

• Promote to business the safety of having a worm and virus free computer by using Mac. (W2, W4, O1, O5, O6)

W-T Strategies

• Improve relationship with Microsoft and Intel so that companies will see them as compatible. (W1, W2 T1)

• Increase productivity and turn around of high demand products to compete with Dell and HP (W5, T2)

The Strategic Position and Action Evaluation (SPACE) Matrix

The Strategic Position and Action Evaluation (SPACE) Matrix is four-quadrant framework indicates whether aggressive, conservative, defensive, or competitive strategies are most appropriate for a given organization. The axes of the SPACE Matrix represent two internal dimensions (financial position [FP] and competitive position [CP]) and two external dimensions (stability position [SP] and industry position [IP]). These four factors are perhaps the most important determinants of an organization’s overall strategic position (David, 2011).

15.1 SPACE Matrix for APPLE

Model 6: Showing SPACE Matrix for APPLE Inc.

BCG Matrix

When a firm’s divisions compete in different industries, a separate strategy often must be developed for each business. The Boston Consulting Group (BCG) Matrix is designed specifically to enhance a multidivisional firm’s efforts to formulate strategies (David, 2011).

a. BCG Matrix for APPLE

Model 7: Showing BCG Matrix for APPLE Inc.

QSPM for APPLE

Conclusion

It is concluded from the strategic management analysis at APPLE Inc. that technological industries are never easy to compete with. They have a lot invest at R&D and have to be proactive in order to compete with their competitors in the industry. As for APPLE is concerned they have been working so well as it is shown form their products. As Apple Inc. is increasing also, those other businesses are increasing and trying to do something interesting for their own good. APPLE needs to make a drastic change. They don’t need to wait for people buy their products only when they are on sale but they need to focus more on the customer support and improve the areas they already have problems