Mission
Bring in the best computing solutions to its customers through its hardware and software capabilities.
Competitive Rivalry: Microsoft, Dell, HP, Intel were the main players in the industry. They all were engaged in acquisitions and creating new products, improving efficiency, increasing competition and diversifying their product lines.
Core Value of the company
Apple was focused towards innovation and bringing in the best in the market before its competitors. They targeted the needs of both the lower end consumers to the professionals.
Porters value Chain
Apple had a strong hold on technology, research and development and the design of its products. Unlike other companies it did not rely on outsourcing and believed in-house design and manufacturing with the best available resources. Its employees are dedicated, creative, and passionate about their work and are highly talented and smart (Don et al, 2010). There is a culture of perfection and the employees feel a pride of being associated with the Apple team and this enhances their motivation, production and innovative abilities.
Differentiation strategy
After Steve came back to the company it has been able to come up with a unique line of products. Apple has been able to incorporate technology before its competitors, example the production of iTunes and iPhone created historical sales by revolutionizing the industry. The iMac and iBook was a huge success and paved the way for Apples future successful performances. The iPod was another hit in the consumer electronic industry (Mossberg, 2006).
Inside-out Strategy approach
Apple possessed the resources and capabilities to produce new products after going through own potential and then market. In this way the products produced by the company were distinct and gained consumer preference. Example the iMac offered all the solutions at a competitive price (Sylvie and John, 2005).
Competitive advantage
The integration of the hardware and the operating a system at the same time helped it outclass its competitors. They worked in synergy through collaboration of all the products and make a system like the iTunes music store for the IPod and then there was constant up gradation of the products (Nick, 2006).
Alliances lead to increased core competencies
It became partners with the best companies in the industry in order to utilize their facilities such as Warner brothers and Sony BMG for the iTunes and Google for the iPhone enhance its core competencies (Martin, 2010). Also it took over other music software, video creation and microprocessor companies such as Best Buy for direct retailing of its products. These partnerships made the company much stronger (David and Gary, 2004).
Strategic leadership
Leaders have the ability to turnaround the organizations and this is what Apple experienced when Steve Job joined it again. He was one of the greatest entrepreneurs who had clear vision and the power to get the best out of everything he did (O’Neal, 2008). His criticism and tight control of the organization and discipline made the company much more competitive. He took the right decisions at the right time and engaged everyone into the Apple experience. He came as a savior to the company at the time when it needed it the most. He restructured the board of directors and gave it a new vision. The company heavily relied on Job’s leadership for its strategic management (Kohl, 2010).
There was no one factor that led towards the success that Apple has gained today. Despite the rough time the company had to undergo, it was able to exploit the market opportunities and this is what lead to the turnaround of Apple Inc. Apple got off track from its initial core value and lost its essence, however later it bounced back with the initial zeal of innovation it was able to conquer the PC industry by making one of the greatest contributions to the industry (Lee, 2003).
Question 2:
- Making use of module tools and theory, analyze the structure, evolution, and challenges of Apple’s competitive landscape in the PC industry as described in the case study. What is Apple’s position in this industry and what are Apple’s competitive advantages? Assess the impact of the external environment upon Apple’s strategic development.
Answer:
The PC industry in general is highly competitive with companies having access to huge capitals, labor and technology along with world class research and development facilities, as a result of which every now and forth there is a new development that takes place. The case describes Apple as one of the biggest names in the industry. However, the following will help to analyze its external environment (Lee, 1996).
The Broad environment
Apple has little or no control over these factors in the external environment, however indirectly they have an impact on the company (Weber, 2005).
Challenges faced by Apple
Towards the end of 1980s and early 1990s Apple was seen struggling with market share and profitability. It was driven aside by competitors due to the production of better and innovative products. Apple changed leadership wasn’t strong enough to cope up with the changing environment in the PC industry. However later Steve Job did a miraculous job by placing the company again on the top. After acing the computers Apple also entered the entertainment and mobile phones industry. However competitors were coming up with alternate products and imitating the existing ones and gives cheaper options to the consumers such as online music stores. Also the demand for IPods is seen to be falling in the developed countries because consumers have the same features in the iPhone. Apple therefore has to come up alternate strategies to overcome this issue, over that the company is concerned about Steve’s health as it will directly impact the future of Apple as he is the man behind the success and strategic management of the company (Wing, 2000).
Competitive Advantage
Apple has proved itself as the pioneer of new product development and creativity in the industry. It has earned the top rank of being one of the most innovative companies due to its continuous commitment towards creating new designs and solutions to consumers needs. One of the biggest competitive advantages it is of being the innovator and being the first one to bring in a unique product in the market (Marion, 1984). It has a mass appeal as its target market is both the lower end consumers and professional businesses. Its competitive advantage is its brand value, high quality skilled labor force, Steve Jobs leadership, its successful and efficient supply chain, creative vision that is ingrained in the organizational culture of the company. Apple has able to gain cost advantage through its process technologies and designs and economies of scale as it sells the products all over the world. It has been able to differentiate much easily because its products are close to the consumer (Cynthia, 2004).
The external environment if not directly but indirectly affects the company. The company has to be very cautious in its strategic management because the competition is high and any wrong decision can make them lose a large market share as consumers can easily switch to competitors who play an important role in the operating environment (Meyer et al, 2009). They need to maintain good relations with the suppliers and partners. Moreover, the intense external environment gives a stronger vision to the company to be more creative, dynamic and unique in their business model (Grant, 2010). Steve Jobs is a man with a creative master mind and therefore so far he has kept the entire dominant decision making in his own control as he understands the internal and external environment very well. His strategies are focused towards consumers convenience and providing them with easy to use products which at the same time gives them quality, style and satisfaction.
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