Assess The Strategic Dimensions Of Apple

Strategic Dimensions: Apple’s Generic Business Strategy

Discuss about the Assess the Strategic Dimensions of Apple.

Companies around the world use several business strategies to be able to realize their objectives.  Apple inc. being of one of the most valuable companies in the world has not been left behind. I have chosen this American based company because I am familiar with it and have an in-depth understanding of its various strategic dimensions.  An analysis of Apple indicates that the company relies on its generic strategy, organizational culture, and formal organizational structure to have a competitive advantage against other firms such as BlackBerry, Samsung, and LG. With a culture that puts great emphasis on excellence in product design and high rate of innovation, Apples has succeeded despite its relatively high prices.  This outstanding success indicates the effectiveness of Apple’s strategic dimensions.

Apple’s generic business strategy is based on Porter’s model, and it is well-aligned with the company’s objectives and intensive growth strategy. This company’s generic strategy is broad differentiation.  Through this strategy, Apple can stand out in the market. A good illustration of how this works is the company’s decision to put great emphasis on elegant design combined user-friendliness as well as high-end branding that has effectively differentiated the company (Heracleous 2013).

The broad differentiation strategy enables Apple always to aim high and develop a way to stand out in the crowded global market by using key features that offer greater benefits to customers and not just pricing. The key features that Apples adds to its products, according to Heracleous (2013), helps Apple to set itself apart from its competitors include seamless connectivity and its electronic products and cutting-edge aesthetics in design (Allen & Helms 2006).

While the strategy has enabled Apple to be more competitive, the company still broadly reaches numerous market segments.  Apple has designed products to meet the various needs of people in all its market segments. Through this strategy, it can have a broad market reach.  Apple, for example, relies on its MacBook product line to reach out to individuals and business organizations as well. By engaging in similar activities, the company’s broad generic strategy enables it to maintain its leadership position as high-value and high-end business (Al-Laham & Huth 2011; Trefis Team 2015).

The strategy has major implications on the company’s strategic objectives.  For Apple to effectively apply it, for example, it has to continue to put emphasis on innovation through research and development.  Further, the company must develop innovative products continually to ensure it stands out against its competitors.  While Apple is known for its efforts to produce innovative devices, that do not guarantee the company’s success.  After the introduction of new products, competitors usually study the advanced features and produce counterfeits.  These new productions are sold at incredibly low prices, thereby affecting the sale of the original products negatively. If the company fails to take an appropriate action at the right time, competitors can catch up with it (Fischer et al. 2008; Arshed & Pancholi 2016).

Apple’s Organizational Culture

Apple’s broad generalization strategy attempts to solve this effectively by compelling the company to innovate so as to remain ahead of the competition.  For that reason, based on Apples’ broad differentiation generic strategy, one of the company’s main strategic objectives is continuous innovation.  The generic strategy also compels Apple to ensure it continuous expanding its market reach. For Apple to achieve this requirement, it must not focus on any specific market segment.  Apple is competing with all market segments with other companies that operate in the same industry.  Based on the generic business strategy, therefore, its other strategic objective is to expand to guarantee a broad market reach (Fischer et al. 2008; Parnell 2006).

However, it is impossible to realize such expansion and business growth with intensive growth strategies. As such, Apple has aligned it a generic strategy with intensive growth strategies. Product development is Apple’s main intensive growth strategy. The other two important strategies are market penetration and market development. The success of Apple, partly, points to properly aligned between the company’s growth intensive strategies and its strategy.  Apple is strong in product development due to its effectiveness in innovation (Arshed & Pancholi 2016; Transformational leadership @ Apple 2002).

However, that is not enough for it to be successful.  For Apple to be successful, it should put greater emphasis on market penetration and market development. By investing considerably in these two intensive growth strategies, Apple can benefit from its generic business strategy and be more resilient against aggressive competitors such and LG and Samsung (Extension of Generic Strategy 2010; Papachroni & Macintosh 2015).

Other than an effective generic strategy, Apple’s culture is its key factor to its success.  The culture determines this company’s capabilities in supporting changes as well as new strategies.  Apple has ensured its employees are effectively developed and integrated into its culture, and that is central to the company’s growth. While Apple’s culture plays a major role in the growth of the company, it also comes with certain challenges.  However, so as to properly match the dynamics of the organization's business environment, Apple has been fine-tuning its culture ( Backer 2013).

Some of the features that are critical Apple’s organizational culture are top-notch excellence, creativity, innovation, secrecy, and moderate combativeness.  Top-notch excellence mandates Apple to select only the best of the best employees. Managers of the organization have always been firing workers who fail to meet their expectations. In areas such as product design and development, the company puts great emphasis on excellence (Backer 2013).

Apple values creativity and selects employees for their knowledge, skills, and creative abilities.  One qualification to be involved in the product design and development is creative. This feature of the organization’s culture is has helped it to maintain the ability to develop solutions to business requirements and the needs of the company’s customers (Fogliasso & Williams 2014).

By embracing a highly innovative culture, Apple is being accredited across the world as one of the most helpful organizations. Apple trains all its employees and encourages them to innovate by contributing ideas to the company’s product development process.  This organization culture has enabled Apple to succeed in facilitating rapid innovation (Fogliasso & Williams 2014).

Secrecy is another tool that Steve Jobs used to beat the competition, and it has become one major element in Apple’s culture. Through secrecy, the company can minimize theft of intellectual propriety and propriety information.  In Apple’s policies, rules, and employment contact, this organizational culture is reflected. Through this aspect of the organization’s culture, it can protect the business from the negative impact of employee poaching and corporate espionage (Damanpour & Aravind 2012).

Apple also embraces moderate combativeness.  This aspect is associated with Steve Jobs who used a combative leadership approach.  In many cases, he challenged employees to be sure they can execute that tasks assigned to them. The current CEO Rim Cook is, however, is working on changing this culture to a more sociable and less combative one. According to Fogliasso and Williams (2014), due to Cook’s efforts, the current organization culture of Apple is to a moderate degree of combativeness.

 There are several implications of these aspects of Apple’s culture.  Creativity, innovation, and top-notch excellence support the company’s industry leadership. They empower Apple to stand out in the crowded market. These features also enable competitive advantage. In Apple’s rapid innovation processes, both excellence and creativity are exceptionally critical (Fogliasso & Williams 2014).

However, the company’s culture also has some drawbacks.  The culture of secrecy limits rapport among employees. At the same time, the moderate combativeness can limit the morale of some workers.   Schein (2010) says since Apple’s organizational culture is not perfect yet, it means it has room for major improvements. A strong organizational culture is essential for improving a firm’s human resource capabilities.  Nonetheless, it is noticed that the company’s culture has a fairly good link with its strategic objectives and generic strategies, which enables Apple to perform excellently and beat its competitors (O’Regan 2015).

Apple’s organization structure is another important factor contributing to the success of the company. Formal organizational structures have a way of creating growth opportunities for businesses.  At the same time, however, it can impose limits on the performance and development of the organization. Apple uses the traditional hierarchy. However, it has incorporated a few elements from other types of organizational structures into its structure. The success of Apple has linked the effective leadership of Steve Jobs as well as innovation.  However, without the company’s organizational structure, Apple could have failed. The structure ensures support for such effective leadership.  Due to the changing market dynamics, Tim Cook has made certain changes to position the company to continue being competitive (Csaszar 2013).

Apple’s continued ability to innovate rapidly is attributed to its formal organizational structure. The company says that support from its structures has enabled it to create new products such as Apple Watch. One of the major features of Apple’s formal organizational structure that has been essential to the success of this company is a spoke-and-wheel hierarchy.  This particular structure has transformed the way things happen in this organization.  In the past, there was no hierarchy in Apple, and all decisions had to me made in Steve Job’s office.  No one in the office would make major decisions except Jobs himself. Things have, however, changed under Tim Cook’s leadership.  The hierarchy has changed slightly. Presently, some structures allow more collaboration. Software team and hardware teams, for example, can collaborate and make major decisions (Lehman & Haslam 2013).

The company’s vice presidents have more independence than before. During job’s time, the autonomy of leaders was unheard of, and this indicates that there are many changes in the company structure. The current structure is less stiff than in the past. However, Tim Cook has retained the element of spoke-and-wheel hierarchy where he is still at the center of all operations (Marengo & Pasquali 2012).

Another organizational structure in Apple is functional-based grouping.  By looking at the company’s upper tier, one notices that it has function-based grouping.  This grouping was derived from the functional type of formal organizational structure.  Tim Cook is the overall and below him are senior vice presidents. For example, one of the senior vice presidents is responsible for industrial design, for marketing, and another for retail. Through this structure, Apple is able to address business needs in terms of functions (Marengo & Pasquali 2012).

The last feature of Apple’s organizational structure is product-based grouping.  The product-based grouping element is evident mainly in the company’s lower tier.  This structure has been borrowed from the divisional type of organizational structures.  There are several vice presidents below the senior vice presidents. These vice presidents are responsible for different outputs or products.  One is iOS apps, another for iPad, and yet another for consumer apps. The advantage of adopting this element in Apple’s formal structure is that it enables the company to address specific products and their specific components (Marengo & Pasquali 2012).

There are some implications for using Apple’s organizational structure. To begin with, this structure enables the company to have strong control over its activities.  According to Marengo and Pasquali (2012).With a stable hierarchy, the company is better placed to take control of everything that goes on within it. Apple ensures that Tim Cook and his senior leaders control all organizational processes efficiently.

On the other hand, Apple’s organization structure presents limited flexibility.  It has the weakness of low flexibility.  The problem with hierarchy is often to prevent lower levels to flexibly respond to a variety of business needs as well market demands. However, the current CEO has already made changes to this system by increasing collaboration among almost all parts of the company. That, however, does not guarantee that the structure will support rapid changes.  Apple’s organizational structure shows that Apples still requires all processes to go through the CEO Tim Cook and the senior vice presidents.

Recommendations and Conclusion

Apple’s strategic dimensions show that the company is on track to success. However, it needs to do certain things to remain competitive for a long time. Apple uses broad differentiations generic strategy, and that has made it stand out in the market. The strategy is well aligned with the organization’s strategies objectives such as the need to develop innovative products continuously and ensure broad market reach. The company should improve the application of its generic business strategy. To do this, it should aggressively penetrate markets, particularly in emerging economies where Apple still has a limited market reach. Besides, for the generic strategy to be effective, the company needs to emphasize on market development. Emphasis on both market penetration and market development is necessary to be able to improve the company’s resilience against its competitors.

Apple’s organizational culture is also critical to its success. The combination of creativity, innovation, and top-notch excellence supports it to stand out in the market. For its innovative processes to be successful, Apple has to make the used use of these characteristics of human resource empowerment. However, the company needs to make to consider reducing the level of secrecy and combativeness as they are responsible for negative effects such as limiting the morale of some employees.

Apple’s organizational structure is also responsible for the success of the company.  The hierarchy in the company’s structure supports strong control over all organizational processes. On the other hand, it brings about limited flexibility. Since the company’s structure does not support rapid changes as the CEO and VPs and the key decision makers, the company should consider devolving power to lower tiers to make decision making much easier.

The strategic dimensions of Apple make it clear that there are linkages and consistencies within these dimensions.  The broad generic strategy compels the company to innovate continuously and penetrate into new markets. The company cultures also create the right environment for innovation.  The combination creativity, innovation, and top-notch excellence are essential for the company to be innovative.  At the same time, Apple’s organizational structure also makes it easier to create innovative products. The hierarchy in Apple’s structure supports strong control over all organizational processes, which is critical for the success of innovative processes. While these strategic dimensions have certain weaknesses that Apple should work on as already outlined above, in this section, they are fairly well interlinked and consistent with the company’s strategic objectives. The success of Apple is attributed to the efficiency of the strategic dimensions.

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