Assignment 4
Running head: WEEK 6 ASSIGNMENT 2 1
WEEK 6 ASSIGMENT 2 6
Week 6 Assignment 2
Sherri Coleman
Strayer University
BUS499 Business Administration Capstone
Dr. Keller
November 10, 2018
Week 6 Assignment 2
The success Apple has had over the years is primarily based on the company’s ability to use its strengths to overcome its threats and weakness. Apple’s strong brand image remains the organization’s strongest threat that has kept it moving through the years (Nwogugu, 2015). Secondly, the rapid innovation process and a consistently high-profit margin are also strengths of the organization. On the other hand, Apple’s biggest weaknesses include the high prices of their commodities, small distribution network and excess dependence on high-end markets for their goods.
General Environment
One segment of Apple environment that affect the company most is technology. Technological changes happen on a daily bases in the industry where Apple operates. With globalization, technology innovation is even faster due to resource sharing and product improvement. Apple and other companies in the industry must adjust effectively by adopting new technology as it emerges for them to remain relevant (Payne, 2017). Apple can only remain effective and profitable if it offers unique advanced technology products in the market.
Another significant element in the Apple environment is politics and legal sector. With advancement in technology and increasing threats to the government, there is a rise in the need for regulation to control the technology industry (Nwogugu, 2015). New laws are made concerning such issues as privacy, artificial intelligence, and cybercrime. These affect Apple and other organization in the technology sector making them keep vigilant of any changes in this segment of the environment.
Five Forces of Competition
Forces of Competition
Item 1
The most important sources of competition for Apple today is Samsung. The South Korea based company has demonstrated the capacity to provide Apple with the competition. This company has given competitive smartphones in the market that are likely to outdo iPhones. Further, the growth of the company has denied Apple markets in Africa Asia and South America even among high-end users of smart gadgets (Payne, 2017). Secondly, Google is a chief competitor for Apple on multiple fronts all over the world. One area where Google has seen Apple’s market shrink was through the unveiling by Motorola, its subsidiary, of Moto X that has given ample competition to Apple’s iPhone. At the software front, Google’s Google Drive cloud service is a significant competitor for iCloud. Google also unveiled its wearable technology products before Apple (Payne, 2017). Moreover, Google products are affordable and diversified to target both high and low-end markets.
Item 2
Addressing the Forces
Apple is set to face a great deal of competition from both Google and Samsung as they encroach its market while still holding their ground. Differentiation has been Apple primary method of dealing with competition. Differentiation involves setting apart the quality of a company from other regardless of the impact this has on price (D. Banker, Mashruwala & Tripathy, 2014). By providing quality products, Apple can be able to maintain its market in the high-end market. The companies should use it brand quality to create differentiated models of products acceptable to the existing market. Differentiation should also be through quality customer service. Secondly, there is a need for an adjustment of business at Apple to include a new line of low priced products. This strategy is meant for the acquisition of new market segments for the organization that takes into account low-end users of technology products. This will improve the company’s market share in the midst of competition.
Evaluation
Future Improvements
The company’s policy of exclusivity creates these three challenges which turn out to be weaknesses for the company (Payne, 2017). Also, the strong control of product distribution contributes to the limited nature of the company’s distribution network. To overcome the limitation, Apple needs to expand its distribution network by reducing their control of the distribution process to allow more distributors to participate. Also, the company can reduce the focus of the high-end market which is composed of the minority by developing new product lines that are affordable to low and middle-end markets. The multinational will use its strong organization brand to market their products in among low-end consumers.
External Threats
China is the greatest threat to Apple today and in the near future. The country presents a challenge to Apple in both the Market and the capacity to produce. While China is the production center for Apple products, Android use in Smartphones still dominates the country with more than 1.4 billion people. Moreover, the government has even pledged to create its own processor for smartphones to eliminate Apple and Android (Grimes & Sun, 2016). For this reason, Apple CEO has paid a number of unsuccessful visit to China in a bid to promote products. Also, Apple’s engagement with Chinese manufacturers who exploit workers by giving poor working conditions has tainted the Tech giant’s name. With documentaries showing how Apple makers suffer through harsh conditions to make products, many consumers all over the world feel a tinge of betrayal and loss of ethics in using Apple products (Grimes & Sun, 2016). Unless Apple can show efforts to improve the problems of Chinese workers in manufacturing the high-end products, there will never be a good reception of these gadgets among highly ethical society. If more documentaries are produced showing the harsh realities of making Apple products, the company is bound to lose big in terms of market share, revenue, and possible legal suits.
Threats and Opportunities
Strengths and Weaknesses
Strategy
The success Apple has had over the years is primarily based on the company’s ability to use its strengths to overcome its threats and weakness. Apple’s strong brand image remains the organization’s strongest threat that has kept it moving through the years (Nwogugu, 2015). Secondly, the rapid innovation process and a consistently high-profit margin are also strengths of the organization. On the other hand, Apple’s biggest weaknesses include the high prices of their commodities, small distribution network and excess dependence on high-end markets for their goods.
The company’s policy of exclusivity creates these three challenges which turn out to be weaknesses for the company (Payne, 2017). Also, the strong control of product distribution contributes to the limited nature of the company’s distribution network. To overcome the limitation, Apple needs to expand its distribution network by reducing their control of the distribution process to allow more distributors to participate. Also, the company can reduce the focus of the high-end market which is composed of the minority by developing new product lines that are affordable to low and middle-end markets. The multinational will use its strong organization brand to market their products in among low-end consumers.
Resources, Capabilities, and Core Competencies
The most important tangible resources at Apple have been the organization’s workforce starting from the CEO to other members of the Apple working community (Payne, 2017). These resources have ensured the continuity of a culture of innovation at the company. The organization’s financial resources which are more than a trillion dollar is also a valuable tangible resource for Apple. For this, Apple is the most valuable publicly traded company in the world. Finally, physical resources including more than 350 retail stores stationed all across the world are important tangible resources for Apple (Nwogugu, 2015).
The most important intangible resource at Apple is the influence the company received from one of its founder, Steve Jobs. The innovative, managerial and other capabilities of Jobs have steered the company to great lengths. The experience at the retail stores at Apple is also an intangible resource that has customers line for Apple products (Rubenstein & Schubert, 2017). Apple’s brand and quality reputation also stand out as a critical resource.
The ability of the company to develop products needed by the customer is a critical capability of Apple. Apple integrates all the companies’ aspects including research, marketing, advertising, and development is a way no other company does. This unique features such as App store acting as a revenue-generating product and marketing tool is a capability for Apple. There are three notable core competencies at Apple (Rubenstein & Schubert, 2017). These include quality customer service at Apple stores and online, quality of product design and the effective hardware/software integration.
Value Chain
Greatest Opportunity
Technology innovation remains Apple most important threat which promises to drive the company through the next phase of growth. As an organization with a strong base for the development of new technology, Apple could use the future predicted growth in technology for its advantage. (Amankwah-Amoah & Durugbo, 2016) predicts that technology use is bound to grow in both a number of users and number of products. First, Apple could move into media and computer spaces that it has not served adequately. The most successful company is one that will provide a multitude of services under one roof or brand in the near future (Bernal‐Conesa, de Nieves Nieto & Briones‐Peñalver, 2017). The new version of Apple TV and other measures will allow Apple to take advantage of the high development in the Web.
References
Amankwah-Amoah, J., & Durugbo, C. (2016). The rise and fall of technology companies: The evolutional phase model of ST-Ericsson's dissolution. Technological Forecasting and Social Change, 102, 21-33.
Bernal‐Conesa, J. A., de Nieves Nieto, C., & Briones‐Peñalver, A. J. (2017). CSR strategy in technology companies: its influence on performance, competitiveness and sustainability. Corporate Social Responsibility and Environmental Management, 24(2), 96-107.
D. Banker, R., Mashruwala, R., & Tripathy, A. (2014). Does a differentiation strategy lead to more sustainable financial performance than a cost leadership strategy?. Management Decision, 52(5), 872-896.
Grimes, S., & Sun, Y. (2016). China’s evolving role in Apple’s global value chain. Area Development and Policy, 1(1), 94-112.
Nwogugu, M. C. (2015). The Case of Apple, Inc., and Fintech: Managerial Psychology, Corporate Governance, and Business Processes.
Payne, B. (2017). Brand Positioning and its Usefulness for Brand Management: the Case of Apple Inc. Newcastle Business School Student Journal, 1(1), 51-57.
Rubenstein, C. D., & Schubert, C. F. (2017). Student and faculty perceptions of iPad integration in a prelicensure program. Nurse Educator, 42(2), 85-90.