• Posted on December 5, 2022
• Amita

SIB7501-B MSc STRATEGIC MANAGEMENT

 

Question 1

Company Introduction

Apple is an American-based manufacturing giant owing to the greatest market share of 14% globally and has been the leading producer of different electronic gadgets known for their elite design and brand value. This company was earlier co-founded by Steve Wozniak and Steve Jobs and found business success in 1979 by Intel Corporation. The products of Apple company mostly include iPhone, MacBook Pro, Apple Watch, TV, iBook and more in the list. The annual revenue (deferred) of Apple stood at $365.8 Billion. Apple Inc. has its headquarters in Cupertino, California, United States with an employee total of 1,54,000 (Apple.com. 2021).

External Analysis

Pestle analysis

Political	1. Political stability 2. International trade
Economical	1. High purchasing power due to low inflation rate (Worldbank.Org. 2021) 2. Decreasing rate of Gross Domestic Product (GDP) due to Covid-19 negatively impacted the business growth of Apple (Refer to Appendix-1)
Social	1. A huge customer range especially the younger generation 2. Understanding of absolute customer needs
Technological	1. Introduction of 5G services as the first rival in the US 2. Usage of better software drive functions compared to most rival brands
Legal	1. Implementation of Employment Rights and equal pay for equal work in the workplace by influencing the government (Refer to Appendix-2) 2. Strict claiming of it supply chain with a successful retail consensus
Environmental	1. Reduction of e-waste from production chain 2. Production of energy-saving software models

Table 1: Pestle Analysis

(Source: Self-created)

From the above table, it may be stated that political stability may help Apple to grow business in a significant way and this analysis outlines the trends that the market is following, by the change in the continuously changing atmosphere of business ventures.

Although after Covid-19 pandemic, the GDP rate gradually decreased, still high purchasing power due to low inflation rate increased the sales rate of the products. By following government rules and acts, the company may gain successful profit with the help of skilled employees and increase customers’ loyalty through technology.

Porter’s five forces

Forces	Level	Reasons
Competitive rivalry	High	Has a direct rivalry with Google, Samsung, Huawei
Threat of entry	Low	The cost of building a rival company to Apple is enormous at entry level
Threat of substitutes	Low	Almost no close substitutes to Apple products
Buyers’ bargaining power	Low	The price mechanism of Apple does not allow bargaining
Suppliers’ bargaining power	Low	Suppliers of Apple find it non-profitable to sell different brand products than Apple (Hbs.edu. 2021)

Table 2: Porter’s five forces

(Source: Self-created)

The entry of different business market members and the evolution of different cost structures has made Apple consider Porter’s five forces. Porter’s five forces consist of the threat of new entrants, supplier bargaining power, internal competition, threat of substitutes and customer bargaining power.

There needs careful analysis as to which new entry forms may consume a good portion of the market share if Apple’s borders are thin in the kinds of products it manufactures, if the products may be substituted easily. The other things as monitoring customer bargaining power, supplier bargaining power, and rivalry as in core competencies (Anastasiu et al., 2020).

Figure 1: Porter’s Five Forces

(Source: Anastasiu et al., 2020)

Internal Analysis

VRIO analysis

Core Competencies	Valuable	Rare	Inimitable	Organizational support	Implications
Brand reputation	Yes	Yes	No	Yes	Sustainable Competitive Advantage
Research and development	Yes	Yes	No	No	Competitive parity
Innovation	Yes	Yes	Yes	Yes	Sustainable Competitive Advantage
Logistics	Yes	Yes	No	Yes	Temporary competitive advantage
Marketing	Yes	No	Yes	No	Competitive parity

Table 3: VRIO analysis

(Source: Self-created)

Industry Key Success Factors

The factors that help a company achieve much success over the first had rival firms based on several products and design managements, such factors collectively determine the Industry Key Success Factors.

The major factors that determine the success of the company are its Brand name, Innovation, Research and Development, Advertising, Product retail and distribution network, Price, Simplicity of design, Response to demand, Exporting production, Supply Chain Management, and Differentiation. The use of superior software such as Aldus Pagemaker and Laser Printers has made Apple an indisputable reputation (Pooja, 2020).

Blue Ocean Strategy

The strategy that Apple. has been following has changed several times owing to the nature of its business operations. The Blue Ocean Strategy creates and identifies the market space that has been previously not observed, low cost the competing with existing market spaces (Carton, 2020). Following the Blue Ocean strategy has the advantage that it reduces the space for market competition and hence makes the firm able to build its own market boundaries.

The technology of Apple has used the Blue Ocean Strategy to be alert and distanced from the major competing firms, without ever entering into the rival zone. The strategy helps the company to develop the market that is unparalleled and completely. The standalone way to reach the maximum number of customers may be a good way for the future endeavours of Apple, which earlier has made the success story for iPods and iPhones.

The company arranges for two different board meetings every week, considering refining the Blue Ocean Strategy and hence working out the idea of developing the different structures of the existing products. Apple hardly considers open market ideas when it arrives at thinking about innovation, on the other hand, it does apply such ideas that the competitors usually do not apply, successfully being in top producer ranking.

Competitive Positioning

Apple has led the world most to the pushover of the world experiencing brand loyalty, where the customers ate driven to buy Apple products mostly due to the brand name and product ensign.

The envision of the company profile has been one of the major objectives that have been the power source for the company products in the coming years. This is the brand strength that Apple has built over the years and the software that is used to manufacture shares similar unique features that push one to buy an Apple product. The enriching experience inculcation in the customer’s mind has been the target objective of Apple for years, in which they have been quite successful (Wang, 2020).

SWOT Analysis

Strengths	Weakness
1. Net revenue and total market share of Apple lies in highly profitable zone 2. Price skimming strategy applied by Apple to increase profit margin	1. Unfavourable impact on sales of Apple products due to weakness of foreign currency 2. Anaemic budget allotment to research and development resulting in underinvesting
Opportunity	Threats
1. Cars being rolled out as the first consumer advantage 2. Customer demand for unique designed models	1. Recession of US economy resulting in lower margin of sales 2. Aggressive marketing of Amazon and Google specially in the smart wearables and voice automated units

Table 4: SWOT analysis

(Source: Self-created)

Strategy Formulation and Evaluation of options

One of the key strategies of Apple is the penetration of the market, where it was defined more as the instrument that measures the amount of product sold compared to the proportionate size of the market buyer’s population.

On average, from the business analyst’s view, the typical market penetration rate has been classified as the range between 2 to 6%, whereas Apple has the market penetration rate based at 19.2%. Most smartphone manufacturers, as does Apple, build the strategy in the Ansoff Matrix mostly to apply the diversification strategy (Loredana, 2017). Her matrix determines the different business sectors strategies that have entered the market with new or existing products (Refer to Appendix-3).

Recommendations

The recommendations are as follows: –

1. Apple should consider reducing the per-unit pricing and deviate it from the premium pricing quotas
2. Apple should consider updating the software stability and security updates to the existing old iPhone models
3. Apple (Apple TV) should consider including innovative ways and attract more shows streaming in various streaming Over the Top (OTT) platforms

Implementation

There are several strategies that Apple should consider implementing to achieve a high-end market output and not lose the giant market share. The implementation has been described in a brief context to Apple’s growth record and the customer, as well as sales service feedback, has been taken to make the implementation more suitable. Increasing the software versions, reducing the inventory of old products, recruiting more experienced and skilled supply chain strategists, awarding and creating open contests to create more unique products. Such other steps that Apple may implement are to design smartwatches that may function at a highly low charge and management of obsolete technical items in the supply chain.

Conclusion

This report has presented the success and growth pattern of Apple in the subsequent years, suggesting the way that Apple may implement to remain in the stronghold of the most successful market growth statistics. The strategy that Apple has applied to remain without competition is the Blue Ocean strategy and the report, it states shows the outline that Apple may follow to achieve a broader definition of success in the revolution of smartphones in the modern era.

Question 2

Introduction

Emergent Strategy has been defined as the strategy that the organization has not set up previously by any board meeting, furthermore, such a strategy has evolved and developed while taking various business decisions. This essay aims to define the emergent strategy of Apple and discusses briefly the functioning of the company in view of the different decisions that have been shaped due to different emergent strategies.

Discussion about the emergent strategy of Apple

Apple is an international company, and observing the net turnover of Apple has redefined the company’s dynamic movement in the current market growth period, where most of its competitors have aligned with the new modernism. There lies a good amount of uncertainty within the company that may lead to the slow progress of the company’s workflow.

Having observed the emergent strategy and understanding the need for such development has formed an environment that is crucial to the company’s management decisions. There are certain points that demand a discussion of emergent strategy, and one of them is the point of logical incrementalism, more specifically, logical incrementalism may be defined as the fusion of strategy implementation and formulation. The strength of this approach has the root of being understood more subtly as the ability to handle complex situations and emphasize more on the decisions of the organization that come from internal sources.

The objective of this approach is to lay an eye on the fact that the innovation is widely being carried out in the organization, and such innovation does not deplete the resources of the company. There are different teams who look after the individual work goals and monitor the specific work functioning that has been the main venture of the company.

Most of the Apple customers are familiar with the products that Apple markets, although are not so much familiar with the TV sets and Set-top boxes that have been one of the major outputs of Apple. In past decades the market for TV and satellite TVs has undergone a widespread change, and such change has been followed up by Apple, and there lies the constant increase of monitoring the product and services that the organization has been selling and marketing. In the way of logical incrementation, the existing knowledge and skills of the organization get to be broader and explore more options that the organization has allowed being adopted.

Apple has always considered forming a grand plan to develop a stricter plan that will allow the sales department to explore markets that have less competition. Following the principles of logical incrementation, Apple has been conscious that the lower working departments are extremely important and that the flow of decisions should be affected from the lower segment too.

The prescribed structure for Apple was to adopt a vertical structure of management, where the managers would find at ease to inspect and monitor the business strategies with respect to the external threats such as the presence of the different business units that lack precision. In respect to this, the allocation of resources may be discussed where the headquarters often determine the number of resources that one section may have. It has the emergent strategy following up, where the sales of most of the products of Apple have not been particularly in line with such a strategy.

However, Emergent Strategy differs widely from the mechanism of the deliberate strategy, where one may think that the two are inclusive of each other, on the other hand, which in real may not be the case (James, 2018). Emergent strategy focuses more on the strategic learning of the organization and exercises a more deliberative control on the direction and orders coming from top headquarters. Emergent strategy serves as the transformative lens that may lead to the simplification of the complex structure of the management, which brings out the clear advantage that the organization may easily function (Singh, 2021).

The learning of different business modules has been on the intent that the organization’s working with the free flow of decisions rather than being bound by a singular central decision. Developing emergency strategy lies in the fact that the organization determines the procedure of adopting the strategy at the exact phase of business booms and losses. Apple has been more inclined on emergent strategy thus, as it has gained substantially from the agility of such methodical strategy devices. Emergent strategy has been viewed mostly as the response that is quite adaptable to the change in the business organization, where it aligns to suit the complex business environments (Keeys, 2017).

Apple sometimes gets into severe strategic issues that lead to the outright criticism of the company, thereby having the emergent strategy formed which is independent of the different managerial decisions from the upper level. The catalytic cessation of the emergent strategy has been looked at in more detail, where Apple while building most of its parent products faces a choice and trade-off between the different strategic decisions.

The top-down planned strategic method in the forms has been mostly emergent, or most simply put they may be said are oriented towards the achievement of the next target goal (Sinha, 2019). Apple has the challenges to face in a market that needs a more refined setting of the strategic guidance, across the different units and different layers of management. The nature and health of the wire of communication may be better understood by following the framework of emergent strategy (Austin et al., 2021).

In addition to the strategy that develops more from the live interaction with the market, emergent strategy has been looked after as the most sought-after business development strategy as it contains the required emergence that a tough situation may need to handle.

There occur various problems in estimating the realistic estimates of the amount of budget that Apple may hold for, and such estimates clearly contain the error of it not being aligned with the market finance. Emergent strategies have made it easier to put the actual picture of the market condition with the business condition and set a more definitive management goal.

Apple nearly lost the mark of selling the product of Apple wearables to Google smart wearables, where the former has made some strategic issues in setting the bottleneck price at a large spectrum. Apple watches, however, have the advantage over its inclusion of monitoring the heart rates, whereby the clinical approach has been taken in consideration which most other tech giants have ignored (Turakhia et al., 2019).

Although the idea of emergent strategy may be said to be aligned with the idea of intended strategy, still it lacks the core definition where the emergent strategy has the most relevance in the world of business. Apple later moved to the development of new cars, where it has been led to the figuring of the realistic estimate of the budget to create the main design.

Apple wants to diversify in new different products and such diversification lacked the emergent planning on a wider note. The environment of the organization needs to be more stable and be built on the execution of the different organizational approaches, where the unpredictable situation may cause definitive oversized problems.

The singular problem that Apple faces is it is not aligned with the customer-driven demands, where the mass may demand a particular style that has been overlooked by Apple. Apple builds premium market products, where the building of such items needs a lot of organizational working and method approach towards the careful study of the firm’s products.

In this aspect, although Apple has been vocal about the reduction of e-waste in its contents, it has faced lots of criticisms regarding the same by showing strict inefficiency. The emergent planning has arrived in Apple mostly to fix the erroneous developments that Apple has been carrying on with several of its components because the manufacturing of the products is never done in mass quantities.

The smart wear of Google, called Google Android wear, has been rounding up for quite a time now, which was overtaken by Apple’s wearable since the notifications of Google’s Android Wear have been facing serious blockage. Apple used the price differentiated method where the price was set at a high margin only due to the variations that the company has customized.

The customers were not quite glad about the innovation, as the need for several different innovative patterns was suggested by Apple fans which was not taken into immediate consideration by Apple, losing the customers to Google Android wearable. The different functional aspect of the products designed by Apple has been quite active about the inclusion of various other manufacturing details that has attracted the customer to a large degree.

The lack of a strong planning had made the need for emergent planning to rise in the company, whereas earlier in the picture several dissatisfactions have risen regarding the sluggish performance by the watch and the repetitive changing of the battery. The greatest shortcomings of all these features have been understood and analysed by Apple only after the consideration of a worthy emergent plan.

In the context of Apple conquering the car market, it needs more reconsideration about the segment of car industry, as the already existing giant rival companies as Tesla or Toyota may make things go completely different. Without the adoption of a good emergent plan structure, the company may never be able to rise as a good runner in the car market.

Conclusion

It may be concluded from the above essay that the discussion has been about the different methods of strategic management of the Apple company. The historical brief of the company, an external analysis of the company where the possible threats and opportunities have been defined.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

References

Anastasiu, L., Gavriş, O. and Maier, D., 2020. Is human capital ready for change? A strategic approach adapting Porter’s five forces to human resources. Sustainability, 12(6), p.2300.

Apple.com. 2021. S2.Q4cdn.Com. https://s2.q4cdn.com/470004039/files/doc_financials/2020/ar/_10-K-2020-(As-Filed).pdf.

Austin, J., Blakeslee, A., Fleischer, C. and Modey, C., 2021. Building a Community Literacy Network to Address Literacy Inequities: An Emergent Strategy Approach. Community Literacy Journal, 15(1), p.8.

Carton, G., 2020. How assemblages change when theories become performative: The case of the Blue Ocean strategy. Organization Studies, 41(10), pp.1417-1439.

Hbs.edu. 2021. Apple’s Future: Apple Watch, Apple TV, and/or Apple Car? – Case – Faculty & Research – Harvard Business School. [online] Available at: <https://www.hbs.edu/faculty/Pages/item.aspx?num=49343> [Accessed 17 December 2021].

James, M., 2018. Emergent Strategy. The international encyclopedia of strategic communication, pp.1-10.

Keeys, L.A., Huemann, M. and Turner, J.R., 2017. Strategic Issue Management in emergent strategy formation in projects.

Loredana, E.M., 2017. The use of Ansoff matrix in the field of business. Annals-Economy Series, 2, pp.141-149.

Pooja, B.C., 2020. An Organization Study Report Of Apple Inc (Doctoral dissertation, CMR Institute of Technology. Bangalore).

Singh, A., 2021. the spirituality of adrienne maree brown’s Emergent Strategy: an exploration.

Sinha, S., 2019. The emergent-strategy process of initiating organizational ambidexterity. Journal of Strategy and Management.

Turakhia, M.P., Desai, M., Hedlin, H., Rajmane, A., Talati, N., Ferris, T., Desai, S., Nag, D., Patel, M., Kowey, P. and Rumsfeld, J.S., 2019. Rationale and design of a large-scale, app-based study to identify cardiac arrhythmias using a smartwatch: The Apple Heart Study. American heart journal, 207, pp.66-75.

Wang, H.H., 2020. Competitive Strategies of Smartphone Industry During the Transition to 5G-A Case Study of APPLE and SAMSUNG.

Worldbank.Org. 2021. “Inflation, Consumer Prices (Annual %) – United States | Data”. 2021. Data.Worldbank.Org. https://data.worldbank.org/indicator/FP.CPI.TOTL.ZG?locations=US.

 

 

 

 

 

 

 

 

 

 

 

 

 

Appendices

Appendix-1

 

Appendix-2

Appendix-3