Global Strategy of Apple
With the development of new technologies and innovations in all spheres of life, any organisation or company needs to move forward. All organisations should provide their customers with high-quality services and products that will satisfy their needs and demands. As a result, organisations are faced with such an issue as improvement of their activities and operations. There are many ways of solving this issue, but the most important thing is that they should concern this organisation as well as its weaknesses and strengths. One supposes that strategic planning is necessary for the development of an organisation and its survival at the market as it helps to define the main priorities and time for their realisation (Akkaya 2000).
Apple, Inc is an extremely popular American corporation that sells the latest gadgets, develops personal computers, software and portable devices. Steve Jobs, Ronald Wayne and Steve Wozniak are the founders of this incorporation. In 1976 they gave birth to the development of such a powerful company.
Without doubt, Apple, Inc deals with ups and downs. However, strategic management, international marketing and successful leadership help Apple, Inc to move forward. The highest peak of success was after 2007 with launching of iPod, iPhone and iPad. It is evident that innovations brought success and technological revolution. However, at present Apple remains the most prestigious and fashionable brand.
393 retail stores in 14 countries, occupying the third place after Samsung and Nokia in production of phones prove the development of the global strategy of Apple, Inc. New products like iMac, iPad 4, iPhone 5 and iPad mini prove the future perspectives of this company. A 24% revenue increase shows financial ups that is why it is possible to say that this company is at the peak of success.
Apple, Inc uses innovative product design, easy-to-use software and innovative hardware in order to attract customers from all over the world. Regarding a driving force of this business, one may say that Apple, Inc belongs to the private sector. That is why it can avoid many pressures faced by public companies. The company`s management chose such strategies as dedication to sustainability, the level of customer service, innovation and creation of new technologies (iCar, iTV, iWatch, etc.)
Apple, Inc is interesting for studying as it is a powerful company and is a bright example to be followed. Orientation on the global market, strategic management and leadership benefit this company. Apple, Inc is one of the brightest examples of success and a good lesson for other global companies in relation to strategic management, financial analysis, organisational culture and leadership. The development of Apple, Inc is a well-prepared and properly implemented management strategy.
The objectives of the paper are:
- to reveal the peculiarities of Apple, Inc.
- to analyse the strategies of this company and their importance;
- to make internal and external analyses of Apple, Inc.
Corporate Strategy of Apple, Inc
Corporate strategy consists of four key aspects: strategic management, creation of shareholder value, realisation of potentials of the company and individuals and diversification strategy. Apple’s corporate strategy includes diversification of business, making computer business the dominant one and related constraint diversification.
“Apple, Inc” is a global company specialised in technology. It is a world industrial leader. Speaking about strategic management of “Apple, Inc”, it is necessary to say that the leader and employees of this company devote much attention to it. The strategic plan, leadership, strategic goals and tactics are connected with innovations and implementation of new technologies. Investors, customers, employees, communities and competitors are the main stakeholders. It is evident that the complex activity of stakeholders, collaboration and communication between them belong to the corporate strategy of Apple, Inc (Jeannet, J-P & Hennessey 2001).
Corporate strategy consists of marketing strategy, production strategy, financial strategy and R&D strategy. Marketing strategy of Apple, Inc is based on orientation on the global market development. The company follows a global strategy of creating products interesting for customers from all over the world. The company promotes its products worldwide as a standardised product. Apple, Inc controls its pricing and monitors demand for its products at the international market. It is a good strategy directed at attracting new customers and winning all worldwide markets. Widening the circle of customers means constant income and financial benefits. The main goals of marketing strategy of Apple, Inc are geographic diversity, use of economic growth rates for motivation and stimulation, entry into new markets in order to raise profits and use of globalisation for defense and support (Porter 1985).
Production strategy of Apple, Inc deals with creation of new locations for its products. The company builds capacity with demand and, as a result it has no evident losses but very high profits. Apple, Inc has chosen well-analysed goals and objectives for implementation of its global strategy. Opening of more stores, streamlining and launch of new products are the ways of winning international market (Ferrel 2010).
Financial strategy of Apple, Inc is a positive one and profits are high. For example, in 2012 with profit of $622 billion Apple got the status of the most valuable company. 26.9 million iPhones were sold in 2012. Apple sold 14.0 million iPads. These figures are really exciting and show constant progress of the company. However, Apple, Inc should also take into consideration high prices as the company may scare consumers (Barney, 1991).
R&D strategy of Apple, Inc is well-developed. Apple, Inc uses innovative product design, easy-to-use software and innovative hardware in order to attraction customers from all over the world. One can say that innovation, development and implementation are the key activities of R&D strategy of this company.
Apple, Inc has been always run by charismatic leaders, that`s why it is successful. Steve Jobs was the founder of the company, and this was his charisma and intelligence that made the company revolutionary and innovative one. Tim Cook continued to be a good leader. Indeed, it is evident that a good leadership is a must for the development. Charismatic leaders of Apple, Inc had a great impact on the corporate strategy.
For Apple, Inc, the customer perspective is the most crucial one. Customers take a prominent place, and their number defines the profit and future perspectives. The number of customers defines the level of business. This perspective places customers at the leading position.
Specifically, the company should organise this process in such a way that all its products are sold. To sell goods to customers is not the easiest task, since it also involves a lot of activities before the actual selling. It is essential to create such a marketing policy that will find ways to satisfy customers` requirements.
For Apple, Inc. customers are the users of its gadgets. Apple should provide its customers with qualitative products and successful return policy as there are many complaints about the return policy. New products and services will benefit the company and increase the number of customers. Apple should reduce prices on its services as high prices discourage customers. Apple should work on improving the quality of its products and services, as high quality products and services will be competitive in the market.
Business Strategy of Apple, Inc
Apple’s Business Strategy is based on differentiation strategy, high quality, innovation, strong graphic performance with great design, brand loyalty, etc. Apple, Inc develops a variety of gadgets and adapts them to the international market. The company continues to offer qualitative and innovative tools. Integration at the global market is a new way of development.
Information about Apple, Inc, as well as about its gadgets, is available via direct mailings, Internet, and in person. This aspect is aimed at satisfying different customers’ needs and at attracting more consumers from different countries.
Apple, Inc brings the best gadgets to different customers (students, businesses, and government agencies, educators, etc.). It means that the company takes into consideration its target market. Its business strategy is based on its unique ability to develop and design its own hardware, operating systems, services, application software, etc. One may make a conclusion that the company does not copy its competitors` products, since the company tries to be unique and original. Its continual investment in development and research is the key to constant success.
At present, there are companies specialising in new technologies and gadgets that is why Apple, Inc has many competitors. Windows, Android, Blackberry, Sony, Dell, HP, Toshiba, Acer, Asus, Samsung, Nokia are the main competitors of Apple, Inc. All these companies are among the most recognisable companies that offer quite similar services and products. Without doubt, consumers choose a product which is not very expensive and comfortable at the same time and satisfies his/her demands.
Analysing Apple, Inc one can say that it is the most competitive company. While all the companies mentioned above can be considered competitors, none of them offers such products as iWatch, iCar or iTV (Porter 1979).
According to Porter, one can analyse the activity of Apple, Inc taking into consideration inbound logistics, outbound logistics, operations, marketing and sales, services, firm infrastructure, Human Resource Management, technology development and procurement.
Asia manufactures hardware products for Apple, Inc. Asia is the primary outsourcing partner of Apple, Inc. OEM partners delegate the raw materials. Apple, Inc also implements automated receiving systems. It is evident that Apple, Inc collaborates with many manufacturers of the world.
Variety of direct and indirect distribution channels are used by Apple. These are retail stores, direct sales force, cellular network carriers, wholesalers, retailers, resellers, etc. In spite of the well-developed distribution system, Apple continues to develop it. Economical packaging also makes Apple different from other brands. Its packaging design is unique and original.
Apple products are free of BFRs and harmful chemicals. The company does not use elemental bromine and chlorine in production of its products. Apple uses the aluminum enclosure for products which is highly recyclable.
Marketing and Sales
Financial strategy of Apple, Inc is a positive one and it brings high profits. For example, in 2012 with $622 billion profit Apple got the status of the most valuable company. 26.9 million iPhones were sold in 2012. Apple sold 14.0 million iPads. These figures are really exciting and show the company`s progress.
Marketing strategy of Apple, Inc is characterised by global strategy and actions, management vision, strategic intent, economic integration and satisfaction of the market needs.
The target market of Apple, Inc is consumers of all ages. However, the most active users are teenagers and young people who like new gadgets. Apple, Inc is also popular among those, who prefer Apple brand. These are people, who spend too much time working and use Apple technologies that make their life more comfortable. The consumers of Apple technologies are active, successful, single or married, raising children or with no children. The average Apple customer tends to live in Eastern Europe or in the United States. However, its future goal is to target consumers in India and China. Apple, Inc does everything in order to satisfy customers' needs (Porter 1979).
High-quality services and knowledgeable sales people of Apple, Inc are the indicators of good Human Resource Management. Innovative products and technologies are the results of good performance and knowledge management. Its own operation systems, hardware, application software and services prove Apple's originality.
Apple, Inc is characterised by such tangible resources as retail locations, well-fortified global supply chain, tailored hardware and software system and massive technical patents. Indeed, all its competitors have such resources as well, that is why Apple cannot consider all these tangible resources as its weapon against its competitors. The main weapon of Apple against its competitors is intangible resources: Steve Jobs’ vision, patents, talented software development team, industrial design capability and relations with original equipment manufacturers. These resources are difficult to be won, but Apple has coped with this.
Without doubt, such factors as country-of-origin, as well as foreign and domestic predispositions have also an impact on the development of the business. To my opinion, the country-of-origin aspect of Apple, Inc will create a positive image. Apple, Inc was founded in the USA. As to the foreign aspect, it is necessary to say that the company has its headquarters in Europe, Africa and the Middle East.
The product strategy of Apple, Inc is to offer the innovative technologies. The distribution strategy is to transfer from regional and local markets to the international one. The promotional strategy concerns communication with consumers to find out their tastes. It also includes collaboration with competitors in order to know their marketing strategies.
Strengths of Apple, Inc
- Provision of a Broad Range of Products. Apple, Inc provides a wide variety of new technologies and gadgets (iPhone, iPad, iPod, iWatch, iTV). It is popular with consumers and meets their demands, as the organisation employs an individual approach to every consumer.
- Accessibility of Prices. Apple, Inc offers a great variety of gadgets at different prices. Of course, exclusive products and the latest ones are expensive.
- A Large Number of Professionals. Apple, Inc employs only professional workers to provide its consumers with high-quality services and to produce new technologies. The company employs labour force from all over the world.
- Leadership and Good Marketing. Without doubt, leadership is an important quality for any organisation. Apple, Inc is characterised by successful leadership, strategic management, and marketing.
- Strong Brand Image and Customer Loyalty.
Weaknesses of Apple, Inc
- Expensiveness. The products of Apple, Inc are not very cheap and sometimes consumers pay only for the brand. One may even say that the company`s products are expensive. The demand for the products of Apple may decrease, because of their expensiveness. It is unreasonable to purchase expensive gadgets, while there are cheaper substitutes.
- Product and Service Quality. The clients of Apple, Inc may complain about the quality of products and services. It means that Apple should take care of its reputation and satisfy all needs of its clients. The quality of the core product level and services always provokes debates and criticism.
- Numerous Customer Complaints. Clients can complain about workers being rude, low level of service, and expensiveness. Thus, the company should find ways of dealing with these problems.
Apple General Environment is influenced by global, demographic, political, economic, socio-cultural and technological factors. Apple, Inc may deal with such an issue as additional production costs in China as wages in China begin to increase. Another global problem with which Apple, Inc may face is government laws regarding environmental concerns.
Apple, Inc may face such demographic issues as decreasing consumer buying power and aging population. These issues can cause a decrease in profits, sales and demand for its products. Political issues of Apple, Inc are connected with battle of Apple against Samsung over patents and desire of Apple to mitigate American taxes. Economic issues of Apple, Inc are connected with the recent decrease in sales.
Socio-cultural issues of Apple, Inc are connected with consumers’ environmental concerns and new devices created by other companies which are outdating Apple’s products. Technological issues are connected with rapid changes in technology; as many Apple's products are becoming obsolete.
The industry environment of Apple is influenced by the power of suppliers, power of buyers, threat of substitutes, threat of new entrants and competitive rivalry. As to power of suppliers, Apple, Inc is completely dependent on a few chip designers and Intel is the dominant one. Apple, Inc should look for other suppliers in order to be competitive and not to spend too a lot of money on them.
As to power of buyers, Apple, Inc is completely dependent on high demand and technology. Varying needs of consumers make Apple innovate and develop. Threat of substitutes also makes Apple, Inc be on the alert. Many other companies produce smart phones with the same functions, that`s why Apple is afraid to lose its consumers. Threat of new entrants is another dilemma and to solve it Apple needs to use many resources, to develop brand, etc. Competitive rivalry is a constant issue, but from the other side it is a driving force that stimulates a company to develop.
Opportunities of Apple, Inc
- Development of New Products and Services. Apple, Inc has a valuable opportunity to develop new products and services that will be advantageous and innovative;
- Global Market Development. This strategy is aimed at diversifying markets involving changes and innovations.
- Widening of the Circle of Consumers. This aspect is aimed at satisfying different customers’ needs; for example, to attract different consumers from different countries with different tastes. This shows globalisation of marketing and a possibility to attract customers from all over the world.
- Geographic diversity. This marketing strategy takes into consideration peculiarities of climate, space, and topography.
- Use of economic growth rates for motivation and stimulation. This framework intends to raise the level of marketing of Apple, Inc to a high degree (Subhash 1996).
Threat of Apple, Inc
High Competition. Apple, Inc competes with other companies for being the first one, as many new ones appear. Windows, Android, Blackberry, Sony, Dell, HP, Toshiba, Acer, Asus, Samsung, Nokia are the main competitors of Apple, Inc. All these companies are among the most recognisable companies that offer quite similar services and products.
Concluding, it is worth saying that Apple, Inc optimises its strengths with the help of corporate and business strategies. It takes into consideration its weaknesses and always looks for the ways of struggling with them. Corporate and business strategies help to realise its opportunities and reduce the probability of threats.
Evaluation of Strategy
According to Richard Rumelt, there are four criteria use for strategy evaluation: consistency, consonance, feasibility, and advantage. Criterion of consistency demands consistent policies and goals. As to Apple, Inc this criterion is well-developed. Its goals, strategic management and leadership are consistent. Organisational conflicts, managerial disorders are not typical for Apple. Marketing and management strategies of Apple, Inc are consistent. SWOT analysis has shown that Apple, Inc has many strengths and opportunities, so inconsistence is not about it (Rumelt 1980).
Another criterion of strategy evaluation is consonance. Consonance demands an examination of sets of trends necessary for the development. Positive reactions at the external environment prove the presence of consonance in the company. As to Apple, Inc there is such a criterion as consonance in its business strategy. Apple represents an adaptive response to its external environment. Global, demographic, political, economic, sociocultural, and technological influence the development of Apple and the company takes into consideration issues connected with these factors.
Feasibility is another criterion of strategy evaluation. This criterion demands to solve problems and create available resources. As to Apple's strategy, it is characterised by feasibility. The company does not try to do something which is not possible. The physical, human, and financial resources of the company are successful, and they are the main components of feasibility. The financial resources of Apple are in enough quantity for further development. It seems that there is not anything impossible for Apple. Everything is feasible for the company with its marketing, management, leadership, creativity, innovations and resources.
Advantage is another criterion of evaluation strategy. It demands creation of competitive advantage of activity. As to Apple, Inc advantage is a typical feature for the company. The company is superior in its position, skills and resources. As to position of Apple at the market it is a leading and competitive company. Its innovations and moving forward make its rivals struggle for being as much successful as Apple. Apple is motivation for the development. In spite of this some internal and external issues Apple remains the most powerful one (Rumelt 1980).
“Apple, Inc” is a global company specialised in technology. It is the world industrial leader. Speaking about strategic management of “Apple, Inc”, it is necessary to say that the leader and employees of this company are devoted to the company. The strategic plan, leadership, strategic goals and tactics are connected with the innovations and implementation of new technologies. Investors, customers, employees, communities and competitors are the main stakeholders. It is evident that the complex activity of stakeholders, collaboration and communication between them belong to the corporate strategy of Apple, Inc.
Corporate and business strategies are at the high level that is why the company is successful. Internal and external analyses have shown that there are some issues but they can be solved because of consistency, consonance, feasibility and advantage of Apple's strategy.
It is evident that Apple, Inc collaborates with many manufacturers of the world. Asia is a primary outsourcing partner of Apple, Inc. OEM partners delegate the raw materials. A wide variety of direct and indirect distribution channels are used by Apple. Apple products are free of BFRs and harmful chemicals. Marketing strategy of Apple, Inc is characterised by global strategy and actions, management vision, strategic intent, economic integration and satisfaction of market needs.
As a result, such strategies for success of Apple, Inc can be recommended:
- Product strategy. Apple, Inc should develop a variety of products and adapt to the international market. The company should continue to offer innovative technologies.
- The distribution strategy. Apple, Inc should transfer from regional and local markets to the international one. Integration at the global market is a new way of development. At present, Apple, Inc wants to win the markets of India and China.
- The promotional strategy. This aspect is aimed at satisfying different customers’ needs and at attracting different consumers from different countries. This proves marketing globalisation and a possibility to attract customers from all over the world;
- Prising strategy should also be taken into consideration, as both very high and very low prices may scare consumers.
It is worth saying that Apple, Inc optimises its strengths with the help of corporate and business strategies. It takes into consideration its weaknesses and always looks for the ways of struggling with them. Corporate and business strategies help to realise its opportunities and reduce the probability of threats.
This paper reveals the peculiarities of the strategies of Apple, Inc. This paper shows marketing possibilities and competitiveness of Apple, Inc. This paper is aimed at presenting a description of Apple, Inc, its marketing weaknesses and strengths.
This paper proves that for being more profitable Apple, Inc should look for new locations and new consumers and the most important to innovate and develop.
This paper shows the peculiarities of corporate and business strategies of Apple, Inc, external and internal issues of the company.