AKattt
Capella University
07/16/2020
Running Head: ORGANIZATION INTERNAL AND EXTERNAL ENVIRONMENT
Introduction
Apple Inc is one of the top tech companies in the world today. The company was founded in 1976 by Ronald Wayne, Steve Wozniak, and Steve Jobs. Today the headquarters of Apple is in California in the United States. The company was established originally to develop and sell personal computers. The company today has shifted to the business of consumer electronics. The company today is in the business of design, development, and sale of various consumer electronics, computer software, and personal computers (Vonk, 2018). Today the company is best known for hardware such as iPhones, iPads, and iPod media players. There are also software solutions such as the iOS and iTunes for media. It also offers cloud services through its iCloud service.
Business Strategy
Apple today has a wide range of competitors such as Google, Samsung, Sony, Dell, IBM, among others, which necessitates a strategy for differentiating itself. The competition has continued to grow today in the world, and the company has been forced to innovate and improve its services continuously. The company has first differentiated itself through cost differentiation. Apple today has ensured that its devices are premium and for select consumers only. The company has worked to make sure that its devices have their own class when compared to those of the competitors. The average cost of an iPhone, for example, is more than 40% compared to another brand with the same features (Gehani, 2016). Apple has also differentiated itself by offering the best experience to the consumer. The company has worked to grow its online and retail stores so that its clients get the best experience from sale to customer support.
Apple, however, has ensured that its distribution strategy is to its stores all over the world, giving the service direct to its consumer. The company has also differentiated itself through innovation. The company is able to charge premium prices because of the innovation and cutting on its cost. The company today offers the client the chance to belong to some form of the executive club when there is the purchase of these products (Gehani, 2016). The differentiation strategy can also be seen in the awards that the company wins in terms of innovation and design. The ability to demand premium prices gives the company exceptional profit margins and increase its revenue. The low-cost strategy which the company has adopted can be seen in the high inventory turnover. The differentiation can also be seen through innovation in research and development. The brand today is associated with a visionary perfectionism and a nonconformist ingenuity. The company has its core products such as the iPhone and the Mac range of computers (Dave, 2018). The company makes its money from the sale of these devices and for multiple purchases, such as those of iTunes and other software solutions that it provides. The company has a vibrant profit proposition that has enabled it to remain at the top of its industry.
Apple today has expanded from the original sale of computers to other devices such as phones, music, and associated devices. Today, it is in the business of consumer electronics with various other hardware solutions, such as smartwatches present. The company owns the product but has third party parties who produce different hardware parts in countries such as China and Japan. These companies are contracted for the production of the devices, and they are not owned by the company. Apple, however, owns the distribution system through both its online and offline stores (Attar, 2018). The company has contracted third parties to carry out various production facilities so as to cut on production costs through investment in countries where labor and raw materials are cheap and readily available.
Apple today has adapted the organizational structure that has a distributed design. The company is able to carry out various values added functions at the headquarters, but there is the outsourcing of manufacturing to various inexpensive sites around the world. The spoke-and-wheel hierarchy, which it has developed today, ensures that there is more autonomy among departments together with efficient collaboration. CEO Tim Cook is at the center while the departments are able to operate independently with a set level of collaboration (Attar, 2018). The upper tiers of the company are diverse and are based on the functions. The upper tiers are to oversee the various tasks while the lower levels are divided as per the features. The company structure goes in line with the corporate strategy as it enables a reduction in the number of distribution centers and suppliers (Vonk, 2018). The corporate strategy, together with the organizational structure, has come to make sure that there is an intense focus to remove the inefficiencies in the supply chain. The company, through these structures, has been able to have more control over the costs that are incurred in the supply chain. The flat organizational structure and the simplification of processes help in increasing efficiency.
Conclusion
Apple today is among the top companies in the tech industry. It has adopted a differentiation strategy in terms of cost, innovation, and distribution. The company also has a corporate structure that is flat to make sure that there is more efficiency and control of the cost. The organizational structure and the differentiation strategy come together to make the company more efficient running with low costs. The low prices and the premium pricing make sure that the company maintains a high-profit level.
References
Gehani, R. R. (2016). Corporate brand value shifting from identity to innovation capability: from Coca-Cola to Apple. Journal of technology management & innovation, 11(3), 11-20.
Dave, J. G. (2018). A CASE STUDY ON MARKETING STRATEGY: APPLE i-Phone. IJRAR-International Journal of Research and Analytical Reviews (IJRAR), 5(4), 106-114.
Attar, T. (2018). APPLE’S NEW APPROACH TO MARKETING AND THE INFLUENCE OF CULTURE IN THE UNITED STATES.
Vonk, L. (2018). Paying attention to waste: Apple’s circular economy. Continuum, 32(6), 745-757.
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