CONTEMPORARY MANAGEMENT TECHNIQUE

Organization Description

Apple Inc. (Apple) is a multinational technology company based in Cupertino, California. Apple specializes in the design, development, and sale of electronics such as mobile devices, music players, and computers. They also sell digital content and application through online platforms such as the App Store. Apple also provides different accessories, services, and support options. A few of their products include Apple TV, iPhone, Apple Card, AirPods, AppleCare, and iCloud. Apple sells its product through retail stores and third parties such as resellers and wholesalers. Their product can be found in numerous retailers which include AT&T, Walmart, GameStop, and more. A portion of Apple’s success can be attributed to its hierarchical structure. This authoritative strategy allows Apple opportunity to growth however, it can also limit Apple’s ability to create. At Apple, they follow a traditional chain of command. Overall, Apple’s success can be linked to its innovative technology and founder Steve Jobs. Moreover, their authoritative strategy help supports the progression of their technology. Recently, Tim Cook, CEO of Apple has implemented a few changes to their authoritative strategy to meet the demands of the industry.

Balance Scorecard

Financial perspective

· Profitability

· Profitability can be measured by earning from operations and trend

· Sales

· Sales can be measured by cash flow, asset turnover, and inventory turnover

· Market value

· Market value can be measured by the share price

· Market share

· Market share can be measured by comparing revenue to total industry revenue

Customer perspective

· Customer satisfaction

· Customer satisfaction can be measured by the number of customer complaints, customer reviews and surveys, and the number of returning customers.

· Marketing/promotion

· Marketing can be measured by the number of new customers and revenue generated.

· Quality

· Quality can be measured by customer complaints, use of Apple Care, use of Apple Support.

· Accessibility

· Accessibility can be measured by the number of retailers and the number of countries in each product is available.

Internal process perspective

· Quality

· Quality can be measured by the number of detects, number of unusable parts,

· Productivity

· Productivity can be measured by labor efficiency, machine efficiency, and the number of unusable parts due to errors.

Learning and growth

· Innovation

· Innovation can be measured by the number of software changes, production launches, and employee skills.

· Employee commitment

· Employee commitment can be measured by employee turnover, employee complaints, and employee questionnaires.

A discussion of the CSFs chosen for the organization/segment – Why were these particular factors selected? Why are they important in accessing the success of the company?

A balanced scorecard (BSC) is an important tool utilized by several companies, including Apple, to revolutionize and enhance company performance. The BSC defined by Blocher et al., (2021) is a “comprehensive performance measurement tool that reflects the measures critical for the success of the firm’s strategy and thereby provides a means for aligning the performance measurement in the firm to the firm’s strategy.” (p. 50) Through BSC, firms can establish and recognize critical success factors (CSFs) which will help managers within the firm make strategic decisions that align with company goals. BSC is also a framework to achieve CSFs and any desired organizational changes (Blocher et al., 2021).

Apple’s BSC above can be used to achieve long-term success. A few CSFs mentioned include market share, quality, innovation, marketing, and employee commitment. Each of the CSFs was chosen to promote the long-term success of Apple. Market share is a CSF because it is a key indicator of Apple’s competitiveness within their industry. By adding this CSF to Apple’s BSC, Apple can establish a goal to increase their market share and measure through this strategic tool. An increase in market share contributes to the overall success of apple by allowing them to compare revenue with other companies within the same industry.

Another CSF is quality. Quality plays a significant role in both the customer perspective and the internal process perspective. According to Kaswengi & Lambey-Checchin, (2019) product quality has a direct relationship with customer satisfaction, making it a CSF for many organizations. By establishing quality as CSF, Apple can use its BSC to measure the effectiveness of total quality management. This will allow Apple to limit product defects, wasted materials, and complaints. Moreover, excellent product quality increases customer retention and attracts new customers Chaudary et al., (2014).

Innovation is another CSF for Apple. Apple is known for its innovative product lines. The company is always trying to create value for its customers through innovative products. Over the years, Apple has introduced several innovative products such as the iPod, iPhone, iTunes, and more. Focusing on innovation strategies will allow Apple to get customers excited about a new product, create a competitive advantage, and adds additional products to their portfolio (Bowonder et al., 2010). Moreover, innovation can promote the growth of other CSFs such as marketing, customer satisfaction, and market share. The fourth CSF mentioned is marketing. Apple has had many successful marketing campaigns. Due to their innovative product and marketing about is one of the largest technology companies in the world. As time goes on it is critical that Apple continue to grow in both innovation and marketing to keep its competitive edge and maintain a strong brand name. Marketing is a key component to the success of Apple because it will allow them to retain and attract customers.

Lastly, employee commitment is a CSF for Apple. Employee commitment is important to the success of Apple because it brings added value to the organization. According to the Society of Human Resource Management, employee commitment can help an organization achieve its mission, execute business strategies, and generate results. (p. 28) Ultimately, all CSFs with a BSC are extremely important to the success of an organization. Organizations have several options available to identify and resolve internal process problems that can improve their financial success. The BSC allows organizations to gather and investigate data from four key areas: learning and growth, internal process, customers, and finance. By combining the information into the BSC. Companies can save time, money, and resources to improve their financial position in the market.

An evaluation of the organization/segment to determine if it is achieving each of the CSFs. Analyze each CSF and use data from the measures indicated in the Balanced Scorecard as support for the conclusions.

Recently, Apple’s announced its financial results for its fourth quarter (Q4) which ended September 25, 2021. Apple posted a Q4 revenue record of $83.4 Billion which was higher compared to the previous period (Apple Newsroom, 2021). Despite the COVID-19 pandemic, Apple has continued to grow in revenue being up 29% year over year. In addition, this year Apple has seen an all-time high in services and Mac revenue (Apple Newsroom, 2021). Apple shares have also reached an all-time recently at $161.02 per share, over a 30% increase year to date. Apple has been able to achieve CSFs such as profitability, sales, and market value due to the excellent financial performance of all its product lines. According to Haslam et al. (2013), Apple had been able to improve its financial performance through increased profitability and achievement of revenue targets.

Over the years, Apple has opened several storefronts throughout the world allowing Apple to open retail and distribution networks. The company uses the outlets in selling its products. The increase in the number of networks has expanded the market share and ensured that its customers could access the products promoting CSF, accessibility. Moreover, the increased number of networks enhances the distribution of products and makes adding to the product line easier. Apple can increase the range of their products through the opening of different product lines which will enable management to diversify their risk and monitor the income of each product. Apple has recently seen a few benefits from this approach. Luca Maestri, Apple CFO, States “Our record September quarter results capped off a remarkable fiscal year of strong double-digit growth, during which we set new revenue records in all of our geographic segments and product categories in spite of continued uncertainty in the macro-environment.” This approach also allows Apple to focus on meeting the needs of its customers. Apple’s products are differentiated by elegant, user-friendly design. According to Lee et al., (2017), the user-friendly design ensures that the features of each product are beneficial to any user.

Apple has also seen an improvement in its internal business processes through the increased production quality of its products. Apple utilizes developmental tools to increase the education and productivity of their employee. For example, Apple has a campus at their headquarter in California to promote research on CSFs. In addition, Apple provides employees with different training programs such as the supplier employee education and development program to increase the skill of its workers. Through these developmental tools, Apple was able to create innovative products like the iPod, iPhone, and iTunes. These innovative products have allowed Apple to meet and exceed customer expectations, promote customer satisfaction, and attract new customers. The combination of these factors has allowed Apple to achieve further success. CFO, Luca Maestri found that “The combination of our record sales performance, unmatched customer loyalty, and strength of our ecosystem drove our active installed base of devices to a new all-time high.” Each category of Apple’s BSC plays a vital role in the continued success of Apple.

References