Apple Inc, Strategic Management Case Analysis
Strategic management is the application of the basic planning process at the highest levels of the company. Top management sets goals for the performance of the company carefully formulating, implementing and evaluating plans and strategies. It involves specifying the organization’s mission, vision and objectives, developing policies and plans, often in terms of projects and programs, which are designed to achieve these objectives, and then allocating resources to implement them (Birnbaum,2000).
Strategic management is an ongoing process that evaluates and controls the business and the industries in which the company is involved; assesses its competitors and sets goals and strategies to meet all existing and potential competitors; and then reassesses each strategy regularly to determine how it has been implemented and whether it has succeeded or needs replacement by a new strategy to meet changed circumstances, new technology, new competitors, a new economic environment, or a new social, financial, or political environment (Lamb, 1984:ix).
Strategic Management Case Analysis: Apple Inc. Introduction: Apple Computers was founded by, Steve Wozniak, Steve Jobs on April 1, 1976. Wozniak was the computer nerd and Jobs was the visionary who sought “to change the world through technology”(Yoffie & Slind, 2008). The two created one of the most successful companies in the world that would in future years be known for their computers, music devices, cell phones and software worldwide. Apple took off after launching Apple II which helped the PC business to generate $1 billion dollars in sales within three years.
Apple was the leader, selling more than 100,000 by the end of 1980 (Yoffie & Slind, 2008). It has added numerous versions of the Apple and Macintosh line, in addition to the IPod, IPhone, and ITunes products and numerous other computer/software products to the Apple Computer, Inc. family. Apple has made its mark on the technology industry by continuing to be successful innovators that lead to their numerous product markets. Strategies and Tactics: Apple focused on two major long-term strategies and tactics under several CEOs.
Initially under Steve Jobs Apple’s long-term strategy was “to bring an easy to use computer to the market” (Yoffie & Slind, 2008). Afterwards several strategic alliances were formed: * The first strategic alliances that they formed were with IBM, Microsoft, and AT&T. The alliance with IBM cost $500 million to create a new OS. They also formed a joint venture with them to create multimedia applications (Yoffie & Slind, 2008). Microsoft agreed to invest $150 million in Apple and made a commitment to develop core products such as Microsoft Office for the MAC platform.
Both alliances enabled Apple to further their computer growth and guarantee software that is available and familiar to consumers all over the world. The alliance with AT&T was a recent alliance that was formed when Apple came out with their iPhone. AT&T became Apple’s distribution partner for the iPhone. They also made concessions to Apple that no handset maker had previously received in a carrier distribution agreement, in exchange for a five-year exclusivity period in the U. S. arket, AT&T gave Apple almost complete control over the development and branding of the iPhone (Yoffie & Slind, 2008).
The second strategy was to concentrate on internal growth which they implemented by developing new products for the markets they had already established and by finding new markets for their current products. For example Apple created a new market for their Macintosh computers by pushing them into the education market and creating their mark among students and teachers. The sale of Macintosh computers remained a pivotal business for Apple.
In 2008 Mac sales accounted for 43% of Apple’s revenue (Yoffie & Slind, 2008). Strengths and Weaknesses Apple underwent extreme changes during the first decade of the 21st century from its migration to new microchip architecture to its expansion to a whole new business line (Yoffie & Slind, 2008). Apple’s current strategies as defined by Steve Jobs are product differentiation with a focus on a broad market. This can be seen by Apple’s many products including the iPod, the iPhone, iPad and all their Mac books that are priced and designed to fit every person’s needs and wants.
Apple created new products and services, such as their iTunes when legally downloading music was needed, to changing market conditions. They also respond rapidly to changing market conditions and strive to be the leading force. By doing this they set a benchmark for their competitors and place their products in consumer’s mindset first. Apple’s greatest strength is that is managed to create legions of fiercely brand loyal customers. These consumers who subscribe to the “Apple” culture stand by their purchases with pride and commitment.
These Apple enthusiasts also present the company with a unique competitive advantage. Apple has several weaknesses which they need to address in order to remain a top player in the industry. Rivalry among competitors is number one which includes some heavy-hitters like Dell, HP, Amazon and Google. Social responsibility is a recent one. It is something that is very important to today’s consumers. Apple currently does not highlight their efforts towards social responsibility.
Also, the fact that they are not very compatible with Microsoft products frightens off many consumers as well. Summary Apple kindled the personal computer revolution in the 1970’s with the Apple I and reinvented the personal computer in the 1980’s with the Macintosh. Today, Apple continues to lead the industry in innovation with its award-winning computers, new products and services. For now Apple has a lot going for it, which includes a fanatically loyal customer base, and a world of opportunity for expansion.
