Apple Inc. Report
The Purpose of the Report
The report explore strategies adopted by Apple Incorporation to maintain its competitive advantages, capabilities in the market, the benefits of innovation, leadership style to the company and how the firm’s structure and strategic planning helps in the maintenance of the market leadership.
Scope of the Report
The report is about Apple incorporation success, challenges, how it has managed to achieve its visions and missions, how it has maintained market leadership through leadership and innovation, strategic planning and corporate structure.
Limitations of the Report
Apple Inc. report includes an analysis of only secondary data acquired from journals, books and other relevant materials. Therefore, the report is limited to information available in books and journals.
Overview of Apple Incorporation
Apple Inc. has accomplishment in the smartphone industry and the music industry is enormous. The core product includes iPad tablet and iPhone smartphone, iPod portable media players and other services. The sales of these products generate high revenue, which surpasses that of rivals in the sector. For instance in 2017, Apple Inc. revenue generated profit to a tune of $17.9 billion while the revenue increased to $78.4 billion. This is a huge success considering the competition in the phone industry and the economic factors (Terrigno, Eliasson & Kohl, 2017). Besides, the product and service portfolios reveal the effort by the incorporation to respond to customer needs and wants. This is a great achievement because many companies in the market are unable to answer to expected user experience and thus the reason for increased brand loyalty. Concerning management, Apple is vertically integrated, and this makes it in absolute control of four spheres of businesses. This includes hardware, software, service-provider, and retailer, which are integrated into a single entity. This is a success because there is no other rival capable of managing the mentioned areas of the supply chain.
Challenges faced by Apple Incorporation
Apple is the most valuable and profitable brand in the phone industry across the globe. Its brand value recorded increased 27% to $107 billion from 2016. However, there are still challenges affecting the organization in the environment (Carroll and Buchholtz 2014). In the phone industry, there are many organizations that produce range of products that exposes the company to increased rivals in the international markets. For example, there are many established and emerging firms in respective regions and this makes increases the intensity of completion in the industry and for Apple due to its pricing policies. Yoffie & Cusumano, (2015) argue that these competitors wield immense financial muscles and deep experience and the combined forces make it possible for their devices to rival that of Apple. For example, Google produces OS for Samsung and Huawei who are competitors and this makes Apple iPhone vulnerable cheaper Android phones.
Besides, the expanding market share controlled by Android threatens iOS, Apple Music, and iTunes. Android OS is encroaching on iOS because companies such as Samsung, LG, Huawei, and Lenovo use the system that makes it have a wider share compared to iOS. As a result, revenue associated with downloads of apps in Apple Inc. is threatened by downloads made in Google Play. In future, Google Play will become one of the most favorable for developers than iTunes market (Terrigno, Eliasson & Kohl, 2017).
Delivering Apple’s Missions and Visions
Apple’s vision mission and statement form the foundation of its success as one of the companies that make high-quality products across the globe. The mission and visions statements have been the primary determinant of the consumers’ loyalty to the enterprise. Apple ensures that its stated mission and vision statements have to be followed strictly to sustain competitive ability in the market. For instance, the vision statement guides the company’s direction in term of product development and market expansion. It also relates to the mission statement that indicates the strategies to be implemented to maintain its success path (Yoffie & Cusumano, 2015).
Apple has various visions for the market, which it focuses on achieving it in the production of goods and services. The current CEO Tim produced Apple’s vision statement which states that the vision of Apple Inc. includes a constant focus on producing innovative products; embracing simple designs for product, control of primary technologies and participation in markets where they can make a significant contribution, and collaboration and crosspollination of the teams participating in the manufacture of products. According to Abraham (2014), during Steve job times, Apple vision included commitment to bringing the best experience personal computing in the world to various demographics such as students, educators, and consumers through design of innovative software, hardware, and Internet solutions.
Looking at the vision statement during Cook’s era it is evident Apple has a strong emphasis on innovation in the production of products. The vision statement specifies the aspect of simplicity employed by the company, which is evident in the way the firm approaches product development and design (Yoffie & Cusumano, 2015). Besides, Apple is famous for its easy-to-use and user-friendly products, which help, improve daily human activities. For example, the design of iOS and iPhone embodies simplicity, which makes it easy to use apps, communicate, and access the Internet. Apple conducts a rigorous market research to guide the process of decision-making in the application of market strategies and product development. Lastly, there is an aspect of organizational culture that governs the cooperation with its employees’ to being excellence and success to business (Khan, Alam & Alam, 2015).
During Steve Job era, the focus was long-term goals such as improving computers and consumers experiences through research and development. This is essential in meeting the target markets demand. The vision statement is achieved by manufacturing and designing excellent electronic devices for the market and setting quality standards that has been achieved.
Apple’s mission statement has been subject to change due to the changing business landscape for years. Therefore, the forces in the market define its purposes in the market. Apple’s current mission under Tim Cook’s leadership Apple designs the best personal computers along with OS X, iLife, iWork and professional software. Apple iPods and iTunes caused digital music revolution, reinvention of mobile phone and defining the future of mobile media and computing devices with iPad (Trinh et al., 2012). Under Steve Jobs leadership Apple’s mission statement showed the company aspirations to make contribution to the society by producing products with an objective of advancing the human capability in the future (Trinh et al., 2012). Analyzing at the mission reveals how Steve Job has a dream of making products which advances human capacity and this was realized by production of digital devices such as iPhone.
Apple has revolutionized the market with products like Macs, iWork, OS X, iLife, iTunes, iPods, iPhone, and iPad (Khan, Alam & Alam, 2015). Apple is charting the way forward to being the market leader in the future by indicating the activities that the management plans to implement such as computing devices and mobile media in the future. The innovation of the current and the next product has been achieved by a continued focus on research and development for various product lines such as mobile devices and mobile computers (Menzel, 2013).
Apple's competitive advantages
Apple competitive advantage in the market is due to its brand, consumers, simplicity, revenue, vertical integration, and product design. According to Terrigno, Eliasson & Kohl (2017), Apple’s brand is the most valuable across the world and continues to get stronger. There are millions of loyal consumers who purchase its product due to high level of innovation, simplicity and a magnificent design heritage. The company generates huge sales revenue, which is used to strengthen its dominance in the market and to reach specific niches. Vertical Integration is very central in designs of Apple products such as semiconductors, software, and services allow the management to have an understanding of the customer experience.
Therefore, vertical integration means no inherent risk of other company taking advantage of technologies because it is not associated with third parties. Further, understanding consumers’ needs and wants makes it easy to provide premium user experience through design considerations and constant innovative features. Further, Apple virtually uses it AppStore and iTunes which makes it expensive to switch to other brands due to fear of losing all the music, purchased applications, and library (Ma, 2016).
In the midst of intense competition in all the sectors, Apple withstands the forces due to superior designs of its products. For example, iPad and iPhone are highly innovative products, which made it gain market advantage over rivals such as Samsung (Purkayastha & Sharma, 2016). Marketing strategies adopted in the market are very superior to the extent that the consumers perceive its products as possessing excellent benefits value than that of the competitors. Therefore, it creates an economic value of the products than the competitors (Dustin, Bharat & Jitendra, 2014). Besides, Apple is making products that produce a halo effect to consumers. Its competitive advantage is due to complementary nature of the product portfolio that makes customers remain with Apple brand instead of buying from other manufacturers with varying user experience and product.
Role Played by Apple Leadership
According to Abraham (2014), leaders play important roles in organization position in the market. Its leadership and other factors have contributed Apple’s position in the market. The focus is former and cofounder of Apple Steve Jobs and the current CEO Tim Cook. Both leaders styles of leadership contribute to Apple market edge due to protected ecosystem, brand loyalty, and supply chain strength. Steve Jobs style of leadership had a tremendous influence on Apple Inc. innovative services to consumers that makes it competitive to date. During his tenure in the helm of the organization, he instilled a corporate culture, which relied on obsessive attention to detail, secrecy, and creativity and this approach defines is products and services and all its activities. The corporate culture now rests on the current CEO role incudes ensuring and improving the culture cultivated by former CEO by rigorously selecting the right employee and further training the Apple way of doing things.
His leadership style is an embodiment of focus, simplicity, and commitment. The element of focus gives Apple Inc. a competitive advantage because the staff concentrates on products that would perform better in the market while ignoring those that drag the company down. The focus includes excellent performance that nears perfection to make user glued to the products. This is instrumental because firm’s performance is affected when management turns the focus to disruptive products. Jobs’ personal attribute reflects simplicity, which helps in eliminating unnecessary features in the products, and incorporate the essence is key to product improvement and better performance in the market (Ma, 2016).
Therefore, Steve's style of simplicity is a source of competitive edge because the software, hardware, packaging, and design show aspects of simplicity that attracts people to buy the products. On the other hand, Tim Cook the current CEO has different leadership styles to that of Jobs. Cook's approach to management stresses on teamwork and transparency within the organization. As CEO, Cook focuses on improving the relationship with consumers, investors, government, and other stakeholders thus making more people interested in investing to the company. Therefore opening the lines of communication with the outside world makes it possible for people inject more capital. This makes the company have a good relationship with government, investors, and consumers as compared to before (Jose, 2014).
Role Played by Innovation
In a competitive environment, it is difficult to understand the difference between varieties of products in the market. The only way of creating such distinctions and ensure sustainable competition in the ability is creativity and innovation (Grant, 2016). As such, the success of Apple is dependent on its innovation's relative advantage evident on the range of products the company produces. In terms of competition, it heightens the level of market acceptance as it is for Apple (Dess, Lumpkin & Eisner, 2014).
In addition, the firm’s products are unique and come with elegant a style, which improves the brand rating, loyalty, and creates a positive impression in the consumer's mind (Dess, Lumpkin & Eisner, 2014). The Research and development team demonstrates unique elements of innovativeness due to its design, integrated external consumer's needs, and the internal technology capacity. As a result, Apple produces fantastic products that connect to the consumers while compared to that of competitors like Samsung. This is complemented by quality services to the consumers that embrace open communication and solving problems (Rothaermel, 2015). According to Grant (2016), Apple packaging is excellent and communicates the need for value to consumers, aesthetic, excitement, and brilliance. Such design communicates value for the money and improves the loyalty to the brand, which makes it hard for buyers to switch products.
Achieving Market Leadership
The term market leadership is defined as the position of a firm in the industry. The aspect is represented with the size of market share held by the company and the margin of revenue generated from the sales of a particular goods and services. Besides, the volume of goods moved in the market can measure a market leader (Goetsch & Davis, 2014). According to John & Shetty, (2014) Steve Jobs, one of the founders of Apple, views the following as necessary for the company to take leadership of the enterprise. The firm must have and control related technology in the market, implement better technologies, create a category for a product and then make the product standard to be above the industry standard.
Apple’s Strategic Planning
Apple’s strategic planning makes it one of the market leaders in the industry. Development & Experimentation of products is a process that ensures rigorous tested to near perfection before it being delivered to the market. Besides, its development and testing are veiled in secrecy, and therefore no company can discover what the company intends to release to the market (Goetsch & Davis, 2014). This makes it impossible for rivals to guess the next move in the market. Such elements ensure production of high-quality products that than of the rivals and one that meets the consumers need (Rothaermel, 2015). On the other hand, its strategic planning emphasizes on the Shared Value, and this means the employees work toward creating value for the company and the customers (Barney & Hesterly, 2015). Therefore, it empowers the customers through quality products and improved experience. Besides, the Idea Sourcing & Design of Innovation does not only look to resolve particular customer needs but to promote consumer interaction and improve customer’s experience. These actions and moves by the management make the company one of the best enterprises in the industry (Hill, Jones & Schilling, 2014).
Apple’s Organizational Structure
Apple’s organizational structure contributes significantly to its market leadership and successful innovation. It has also enabled the creation of opportunities to ensure constant market growth (Hill, Jones & Schilling, 2014). Apple organization structure is collaborative designed to bring the involved parties together, boost long-term relationship, and achieve a common goal. In addition, the structure supports Apple work environment and bring cooperation between individual while enhancing teamwork. For example, in such environment, the professionals function as one unit to achieve set organizational goals. This is paramount in the enabling collaboration of different workers who are talented. Further, it helps in generating more innovative ideas by employees (Lussier & Achua, 2015).
This makes the production very efficient because the workers determination enables them to overcome hurdles and work for long hours. The management only selects only the best in terms of skills and creativity, innovativeness and this lead to improved design and product development process. To this end, the organization remains as one of the innovative and valuable companies in the world helping it maintain the market leadership (Dess, Lumpkin & Eisner, 2014). The operations and the continuity of the organizations is enabled by different leadership in the organization such as chief operating officer, marketing chief, marketing communication VP, and hardware technologies chief. These are essential leaders which drives the Apple’s innovation and sustain its competitive ability.
According to Jose (2014), Apple’s organizational culture is one of the factors that supports its success in the market and that of its products. This is because the corporate culture determines the capabilities of instilling changes in the organization such as bringing new policies and strategies. In Apple incorporation case, the co-founder Steve Jobs brought the culture which required all the workers are trained and developed to its culture which is essential in facilitating rapid innovation. Such innovation can be seen in products like the Apple Watch, iPhone and iPad. The following are the characteristics contained in the culture. During his tenure, Steve Jobs cultivated the culture of top-notch excellence, creativity, innovation, secrecy and moderate combativeness. Some advantages and benefits accompany the characteristic. For instance, the combination of these enables the organizational culture that plays a role in supporting the firm to be ahead in the industry and maintain the competitive advantages.
On the other hand, the current CEO Tim Cook brought the culture of excellent management, transparency which helps Apple improve the relationship with government, investors, and employees through communication. He further strengthened the existing culture by ensuring the best of employees are chosen and passing them through an orientation process where they learn the values of Apple and how decisions are made in the organization.
In future, the scale of competition will be very high and detrimental to organization’s market share. As such, the management should focus on making products of high quality and deliver the same to the market with lesser prices. This is one way of sustaining its competitive ability because it will meet the market need for mobile phones, computers, and music. Further, the organization structure should be structured in a way that the Human Resources training employees to handle intellectually challenging tasks in the future and greatly rewarding employees who initiates innovative ideas for the company. Such moves not only improve the skills but also significantly improve the loyalty to the business for efficient performance.
To continuously meet consumers’ demand the company should expand the product portfolio and further bring new products into the mix. For instance, the Apple can improve its range of products to iwasher, ioven, Ifridge and perhaps links all these home-based equipment into a single system where the users can control and monitor all by the use of their ipad or iphone. Such move will intensify competition to a level where other thinks it is humanly impossible. There is also need to expand into new markets in future by targeting different demographics that is not in their consideration now. These includes expanding to a new marker such as India, Kenya where many are low-income earners and make quality products which the can afford to purchase.
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