Evaluate Apples strategies Essay
Apple is among America’s most admired companies today but this has not always been the case. Using module theory and case evidence, critically evaluate Apple’s strategies since 1990. Explain why Apple has been through difficult times and what made the “Apple turnaround” possible. Answer: The global PC market has always been highly competitive with constant growth and modernization with players such as IBM, Dell, HP and Compaq creating tough competing grounds; therefore creativity and innovation has always been at the heart of Apple Inc.
Ever since its formation in 1976, Apple has been able to survive and grow through its brilliance, quality, experience and brand strategies which had helped it reach the mark of one the most innovative companies of the world today (Lee, 1996). Company failure However it has experienced successes and failures both over the period of time. Apple has struggled during the period of 1985-1997.
This was due to the absence of strong leadership and the role of key executives who failed to come up with effective strategies as a result of which costs rose, consumer appeal and market share fell as competitors were able to produce better products at efficient prices, the company was making huge losses during
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The Outside-in Approach to strategy An analysis of the external environment gives an insight of the market situation of Apple and would help in the Outside-in approach to strategy. This strategy responds to changing market trends and consumer tastes based on the systematic analysis of the competitive environment (De Wit and Meyer). Apple also made use of that is by exploring the market it came up with a much better, easier and advance computing solutions. One of the ways to do this is through Michael Porters competitive forces as applied below (Burnes, 2009)
PORTER’S 5 FORCES OF APPLE INC
Intra-Industry Rivalry IBM, Dell, HP, Compaq 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).