Strategic changes in Apple
Strategic changes in Apple
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Introduction
Apple is an American based Company dealing with designing and manufacturing of electronics and software. Apple products include pod, iPhone and Macintosh computers, Pro line laptops, desktops among other products. Apple founded by Steve Jobs in 1976 was originally name Apple computer Inc. but dropped the word Computer and has been known as Apple Inc. The company has expanded and currently has over 3500 employees across the globe and had sales, not less than 32 million as at September 2009. As stated by Earnshawon 2009, the biggest boost that the company has enjoyed was witnessed when the company sold 6.9 Million iPhones in the first quarter of 2008.
Why is change needed and is change happening
As a result of the increase in business dynamics, technology and an enhanced pressure on Apple to diversify its operations and capture a greater market share, a change is needed. Business diversities and technology have greater significance on the marketing of Apple products especially when referring to electronics (Bigelow and Crittenden, 2003). Since the formation of Apple other various companies manufacturing and selling electronics has emerged. The companies have flooded the market and hence a reduction in Apple’s market share and thus the need for change (Jay, 2001). The company feels immerse pressure to ensure that it redesigns its operations and specifically marketing strategies to gain bigger market share. A change in marketing is required to help Apple emphasis on strategies that can help them improve their positioning in various market segments (Maurer, 2009). Through change, the company opts to build its reputation and create awareness in all their targeted market segments.
The change in the company will be helpful in gaining prominence in the market. Apple has faced various challenges in terms of marketing and market share and so the urgent need for its change in marketing strategies. The company needs change to merge the expertise team of managers with the weight on Apple’s operative structure to foster an enhanced growth and financial gain (Benner, 2001).
Apple’s main stakeholders and their expectations
The company has partnered with various companies for example, Intel which it partners with in the form of Intel based Mac computers as from 2006. The company shows strong cultures in the way it enhances performance internally, and these cultures relate to corporate affairs in the company. As the company expanded and produced quality products, the consumers and stakeholder accepted Apple’s products (Wright & Crimp, 2002).
Presently, the company stakeholders are as many as non-stakeholders. Among the stakeholders of Apple are Lenders, employees, manufacturers, Software developers, Customers, Suppliers and Music industry. The greatest expectations of the stakeholder have been to get value form the company. The company ins trying to fulfill its customers’ objectives increased the stakeholder’s value by 48% over six months in 2012.
The company further announced that it would issue a quarterly dividend in 2012. It is essential to value stakeholders since they give what the company needs. This refers to the products required in the market as well as services. Identifying Apple’s stakeholders are essential as it assists the company recognize the stakeholder’s value proposition (Lawley, 2007). The most identifiable Apple’s stakeholders are its consumers. Apple’s consumers include the buyers of its iPods, notebooks and McIntosh computers. The other stakeholder is the local community whose propositions are to be in tandem to the inputs they have placed in the company. The consumer’s expectations have been to get value for their money.
The reasons for the change
The Apple’s macro environment is affected by various factors. It is necessary to understand these factors, and how they impact on the operations and performance of Apple. One of the factors is political which may influence taxation on the company. However, this is an external factor and the company has no control over. The increase in taxation leads to reduction in profit margin of Apple (Marr, 2006).
The economic environment connects to the extent of economic growth either a decrease or increase. The American economy has improved, and this greatly affects the performance of Apple. Economic factors affect the quantity of goods and services available for use to consumers and so it has an impact on the company’s customer base (Marr, 2006, pp. 50).
Industry analysis of Apple
The strengths of the apple company include the huge profits that have arisen from the sales of the iPods, Macintosh computers and its notebooks. This has raised a considerable amount of money to the tune of 320 million dollars (Philip, 2009). The brand of a company is the most distinguishing factor in its identity and so the need for improved marketing strategies. Apple is branded as the most established and healthy IT organizations in the world. This relates to economic and social environment. The strengths of Apple distinguish it from other firms and its big customer base.
The weakness that is associated with Apple Company is its faulty screens that crumble under pressure. However, efforts have been made to correct this anomaly and compensation issued to the affected customers. A change is necessarily in the company’s manufacture process to improve their brand. Early iPods had faulty batteries (Derrick, 2007). The company charges less for its music, and this is perceived as a commercial weakness in its part as it gives in to music producers. The broken relationship between Apple and IBM has confused Apples consumers as it was said that they were about to switch to Intel (Steffens and Ventures, 2009). These relates to the stakeholders as at January 2002. The opportunities that are available to Apple are numerous as it develops its ITunes and music players into a mobile phone format. The high product substitution of electronic products in the market is critical for the technological environment (Benner, 2001).
Identification of gaps from the analysis’s framework of analysis looks at the threat of substitute products. This directly affects consumers of Apple’s products and services, as alternatives to their products are made available especially by Intel and IBM (Coulson, 2006). The aspects of Porters framework that is evident in Apple include the buyer’s likelihood of settling for the substitute products, other companies offering products similar to the iPod and other products at a cheaper price have altered the consumer base of Apple. The threat of entry of new competitors into the market pioneered by Apple has been an issue the management and stakeholders have considered; this will decrease the profitability of Apple (John, 2006). Porter’s framework looks at this aspect in detail and Apple Company has responded to this in a number of ways (Steffens & Ventures, 2009).
It may sound crude, but Apple has in a number of times tried to block the entry of competitors into the field by imposing imaginary barriers. The barriers may include patent and rights through colluding with authorities. New entrants to the market also have to consider other factors such as economies of product differences, brand equity, capital requirements, absolute cost advantages, learning curve advantages, expected retaliation by incumbents and government policies (Marr, 2006, pp. 47-49). The intensity of competitive rivalry in Apple and other Companies has led to growth of the industry in innovation and marketing. This has made Apple come up with a variety of new services including the down loading of music into iPods for its users.
The management of change and model used by Apple
Comparing the model employed by Apple in strategizing its operations and with other strategy models needs the analysis of various aspects and how they impact on the overall performance of the company (Kurtz, 2008). The model employed by Apple necessitates vision, mission and objectives upon which decisions are formulated. The company has all the three aforementioned aspects in its structure as it is essential to draw comparisons when making decisions.
The model that has been used by the company in managing their change is the Resource based View strategy model. The model establishes the company’s monetary sources and capability of funding its operations. As argued by Steffen Steffens & Ventures 2009, the model further establishes Apple’s property, plants and equipment which have been accomplished.
The model makes Apple attain control over its resources. The company has achieved the control of its intellectual properties, and this has boosted its innovation. The model has effects on the competitive advantage of the company. The resources that are easily accessed the company are unique. This is since the materials are considered hard to copy. The model employed has assisted the company gain a better competitive advantage over its competitors (Asce & Otoyo, 2003).
The other strategy that has been employed by Apple is Stakeholders View model. The model takes a critical examination of the groups both inside and outside the company that have shown interest in decisions made by the management. The model has assisted the company in improving its strategic management and further assisted in stakeholder’s analysis (Steffens & Ventures, 2009, pp. 47-57). The stakeholder view model further entails identifying and evaluation of their needs, requirements and gauging their contributions to the success of the company. It is essential for Apple to evaluate the effects of their actions on stakeholders (Steffens, 2009).
Apple has tried maintaining a good connection with its stakeholders through improving communication and customer care (Ramanathon & Hegstad, 2000). The company also needs to motivate the stakeholders for the benefit of the company. The good relationship between the stakeholders and the company has enhanced co-operations and thus reduced risks. As a result of the smooth cooperation between the company and its stakeholders, the company has been able to gain competitive advantage (Lawley, 2007).
Practices to be used to facilitate change
With an increase in globalization and development of global trends, international companies play a vital role in shaping business dynamics within local environments (Pearce & Robinson, 2009). International businesses are responsible for nearly 60% of global trade volume which implies that their performance may affect national economies and influence global economic trends (Armstrong, 2006). It is imperative on individual businesses and researchers to come up with strategies through which local and international businesses can strategize their operations such that they aid improvement of global economic conditions and their profitability and so the business plan (Hubbard et al. 2008).
Globalization of markets can easily benefit both the rich and the poor alike. However, the amalgamation of the world economy is outpacing the growth and development of a healthy global policy (Armstrong, 2006). Markets of International level offer a varied range of opportunities for firms that have products together with services which are in high demand (Thompson & Gamble, 2008). The newness, the nature of attractiveness, cultural adaptation as well as the suitable marketing strategies that are being put into practice by Newell Rubbermaid can assist a great deal. To be able to assess the potentiality of the market, a firm will seek to identify the summative demand for a given product and be able to relate it with the introduction of the product and its distribution. The growth in terms of the population provides a coarse estimate of the anticipated future market potentials. This also applies to consumption patterns (Armstrong, 2006).
In order to ensure that the venture keeps track of the competitive force and extent of competition in the market, the business shall establish a strong and positive link with sales representatives (Philip, 2009). Many suppliers will also be identified, and their contacts kept as an integral part of the business records which must be updated from time to time (Hubbard et al. 2008).
The entrepreneurs will work to ensure that there is an establishment of several key partnerships with various industry experts. This will ensure long-term success of the business venture (Thompson & Gamble, 2008). The venture will have a cordial relationship with professional advisors in matters relating to taxes, financial and accounting matters (Armstrong, 2006).
It is essential to identify a suitable place for marketing Apple products other than just in USA. The place can be described as the strategy that ensures distribution of the Apple products to the marketplace. In regard to this strategy, the marketing manager or sales manager must identify the best channels of distribution that can be used to get the product to the prospect market or target customers (Wright and Crimp, 2002). In this area, the marketing manager must choose the channel members, and should look at areas like market coverage, logistics as well as the levels of service. Wrong decisions in this marketing mix item might cause delays among other inconvenience that may work well against the objective of the marketer. If the channel of distribution is too long while the market is not as vast, this might also cause additional costs to the consumer.
According to Marr 2006, pricing still remains a challenging task in the sports market. The marketing manager should ensure that while making the pricing decisions, he takes into account the profit margin of business and the pricing response other competitors are likely to elicit. Sutton and Stern 2007 advice that the marketing manager should be aware of pricing that may have an immense impact on the ability of the sales staff to make any sales of the product. The price is visible, and any changes effected on it can be communicated with ease hence impacting on the consumer perceptions (Wrenn et al., 2007). Where the market is characterized by an elastic demand, the marketing manager may use price as a very effective tool. Nevertheless, the marketing manager must be aware that price is ever close to the consumer’s mind, and any tinkering with it may be harmful (Shank 2001).
Promotion is one area that the modern marketer has to consider and is very essential in providing a chance to dwell on the salient features of the product. In this area, decisions made include those with respect to communicating and selling to prospective consumers. Given that these costs can be large in as compared to the product price, the marketing manager must carry out a break-even analysis whenever he is faced with the task of making promotion decisions. Thus, one significant thing for the marketer in relation to the promotion decisions is that it is helpful in establishing the value of a customer to facilitate determination of whether more customers are worth the cost of obtaining them (Benner, 2001). Promotion must be made part of marketing strategy by first establishing the wants and needs of the customers so that when carrying out promotional events like advertising, media types, special events and public relations. The main aim is to satisfy an already identified want or need of the consumer (Shank 2001). In the modern business environment, companies and business entities spend huge amounts of money on advertising and public relations. This is because they have become very sensitive items and well recognized. Given the huge costs, the marketer must establish whether he has a long-term or short-term objective. These huge expenses mostly benefit businesses that have long-term goals.
Synthesis of findings into overall recommendations
There is a need for the Apple Company to secure its future in the business world thus the formation of a future focus strategy. There is the need to establish a strategic architecture which basically ensures that the customer satisfaction is achieved in the view of providing the necessary requirements (Duncan & Tarcy, 2000, pp. 22-27).
Indicators provide information to the company on the progress of its products to the market. Financial indicators need to be properly structured in order to show the effects of the economic status in the United States on the purchase and usage of Apple’s company’s products (Jay, 2001). Social indicators show the levels of acceptability of Apples product among a certain social group be it in terms of age, financial capability and level of education (Kurtz, 2008). In emerging markets especially in Asia and Africa, it is noted that the use of the Apple products is common among the educated and financially empowered. This fact can make Apple improve its usage among all social groups as they can offer cheaper products for the lower market. Indicators need to be properly established as they offer guidance to the Company (Asce & Otoyo, 2003).
Marketing is a tool that ensures that people especially the consumers are familiarized with a product. Apple Company has arm twisted a number of agencies by providing them with lower rates of pay especially in ensuring that trade shows are successful. Decisions made at the executive level cannot be challenged, as much as they may not be favorable to the growth of the company, this has made life difficult, and this is a typical method of playing hard ball with the management of the company (Wrenn, et al. 2007). Personal discipline is a key to the performance of an industry; Apple plays hardball with its workers through its strict ethics and cultures that do not give room to the development of personnel through corrections. In the event of 3 disciplinary hitches, an individual is dismissed from service. The company has played hard ball with its suppliers, personnel and competitors. This strategy has led to growth of the Company’s consumer base.
Conclusion
Based on the SWOT analysis of Apple, the managers should effectively take advantage of the loopholes that the firm has been unable to fill. Specific strategies and action plans will assist in fully capitalizing on Apple’s weak points. On Apple’s product range and features weakness, managers need to engage in is ensuring that the company adopts better technology in marketing its products. Furthermore, managers should mobilize resources from my organization to ensure that the company offers the range of products and services offered by Apple. To ensure the achievement of this goal, managers should continually identify the potential new business areas that would improve the profitability of the company from the current levels.
Furthermore, the managers should effectively take advantage of the opportunities that Apple has let go unnoticed. To counter the threat of existing free website, an incentive program that will make the company’s services more attractive than both Apple and the free sites will be developed. Managers should push for a policy in which the people using my company’s software to download items will be given a 25% discount on all music downloads. There should be free image download for up to three months upon the date of subscription and most importantly a guaranteed free security from internet enhanced viruses which adversely. This will increase the attractiveness of the company’s software to the potential customers. Managers also ought to ensure that the relationship with Company’s technological service providers is based on trust and sincerity. These two virtues will go a long way in building long-term working relationship between the two parties and allowing further inventions resulting from the partnership. This will be achieved through the organization of social forums between the employees of the partnering firms so as to allow the nurturing of social involvement such as basic friendships.
In short, the company should use the available information on Apple’s SWOT analysis to its advantage. It will capitalize on Apples weaknesses on product range and features to build a wide range of products than Apple and improve on features of its software compared to those of Apple’s products. In addition, the company counters threat of free websites through incentives; fund the research function to foster innovations and aim at building a strong relationship with the technology support providers so as to enhance stability in service provision.
References
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