Strategic Plan, Part 3: Strategic Evaluation and Recommendation for Apple
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apple_environment_scan-2.pptxAPPLE: Environmental Scan
COURSE: STR/581
MAY 8, 2017
INTRODUCTION
Determine how to create value and sustain competitive advantage through environmental scan strategy
Evaluation of Apple’s remote environment
Assessment of the company’s industry environment
Evaluation of the organization’s external operating environment
As we review the Apple, Inc. organization, we will consider how the team can remain successful even in the aftermaths of Steve Jobs death. It is imperative the company conduct an environmental scan and review the different areas involved in such a task. The various areas involved in the environmental scan will consist of determining how Apple can continue creating value and sustain their competitive advantage, an evaluation of the company's isolated environment, an assessment of the industry environment, and an assessment of the organization's external operating environment. Each of which plays a significant role in determining the path the company will follow. As the company begins to work through their environmental scan, they must first obtain data, which will assist in conducting an analysis of the many different areas mentioned above. The data analysis will primarily allow the team to create a SWOT analysis, which will be utilized to help the organization make a decision as to its future direction.
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Environmental scanning strategy
Gathering data relative to:
General Environment
Government, technological, economical etc.
Competitors/industry
Trends, threats, opportunities, etc.
Itself
History—where its been, where it wants to go
Environmental scanning is when an organization or company gathers data about the environment around them, whether it be the world itself, the competitors, the industry, or itself. When a corporation does an environmental scan, they want to know what's going on around them and where they fit and where they want to make their mark and then they can start planning how to do so.
When scanning the general environment, companies will want to take a look at the any of the following data:
Demographics: age, population, income, diversity, etc.
Economic: trading data, interest and inflation rates, budgets, etc.
Political: laws regarding taxes, labor, etc.
Technological: new technologies, innovation of products, etc.
Sociocultural: workforce diversity, workforce culture, and quality, etc.
Global: the global market, major global economic events, etc.
Physical: Environmental resources/consumptions (energy), disaster relief efforts, etc.
Companies will take information that they gather from the general environment and use it to predict future trends within the context to adjust their strategic planning for the patterns.
Industry environmental scanning includes collecting data that will affect the company directly. This data includes how a company competes and responds to changes in the industry. This information includes looking at new businesses entering the sector, power of buyers and suppliers, the threat of products being substituted or replaces, and the intensity of rivalry in the industry. By looking at this information, a company can intentionally plan on its competitive actions and responses (Hitt, Ireland, & Hoskisson, 2015.)
A company must then look within—where they are now, where they would like to be, what are their strengths and what are their weaknesses. By doing this, they will be able to take the information from the rest of the scan and develop a strategy to get where they want to go and how they are going to be able to get there.
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creating value and sustaining competitive advantage
Industry environmental scan
Identifying strategic groups
Competitor analysis
https://image.slidesharecdn.com/applemsft-160411202601/95/apple-vs-microsoft-39-638.jpg?cb=1460406472
When a company is completing an environmental scan, they have the potential to take the data and create value and sustain competitive advantage. A lot of this data will come from the industry environmental scan. The environmental scan includes “analyzing threat of new entrants, rivalry among competing firms, a threat of substitute products, and bargaining power of buyers and suppliers” (Hitt, Ireland, & Hoskisson, 2015).
Strategic groups are companies that are in more competition than others in the industry. For Apple Inc., the competitors can differ in each product. You can see some of Apple's competitors on the chart depending on which product sector. It is important to look at the other companies in an enterprise's strategic groups to understand the team's competitiveness and be able to make decisions about pricing decisions, distribution channels, marketing, product quality, etc.
Competitor analysis is the direct investigation into a company's competitors. In this report, a company will look at their competitor's current strategy, future objectives, and determine their strengths and weaknesses.
Apple has strategically planned to create a very strategic branding plan. This has allowed Apple to build perception of value through the brand itself, no matter what product a consumer is purchasing. This has allowed Apple to continue to keep prices high and not lose customers. Apple has continuously used environmental strategies to position themselves in a sustainable and competitive advantage. For example, they have strategically released products before or around the same time that competitors have released the newest versions of their products. Apple will need to continue to analyze the industry and the trends they see to continue to create value and have a competitive advantage. For example, it may come to the point that consumers are not willing to pay higher prices for Apple products even with perceived value due to other environmental trends such as the economy, which Apple will need to adjust accordingly. By looking at the industry and the external environment and creating the strategy and adjust, therefore, Apple will be able to continue to create value and sustain competitive advantage.
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evaluation of the company’s remote environment
Political Remote Factors
Improve free trade policies
Stable politics in developed countries
Economical Remote Factors
Rapid Growth in developing countries
Stable economies of developed countries
Apple works continuously to review their remote environment to see where there are additional opportunities and threats within the industry. PESTEL/PESTLE discussed Apple's remote analysis for 2017 multiple opportunities as well as threats were brought to light. Each occurred within a particular arena for the organization. Those different areas included political, economics, sociological status, technological, ecological, and legal factors. All except for the statutory factors offered opportunities for growth for Apple, while the regulatory elements brought threats. As Apple continues to work through the global market without Steve Jobs, they have many opportunities ahead.
The political remote factors opportunities included "improving free trade policies and having stable politics within the developed countries" (Lombardo, J., 2017). These political factors can increase the competition within the market, however, as the policies and politics improve the trading within the different countries will improve which will ultimately increase Apple's presence in the global market.
Another unknown factor Apple will have opportunities to expand their global presence includes "rapid growth in developing countries and stable economies of developed countries" (Lombardo, J., 2017). These are based the remote economic factors that are currently within the industry. However, to increase their market share within these countries, the company will have to move with both quickness and accuracy as the competitors will make the same choices and move into these same countries.
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evaluation of the company’s remote environment
Sociological/Ecological Remote Factors
Sociological
Increased use of mobile access
Increased use of Social Media
Ecological
Business sustainability trend
Product energy efficiency trend
Labor Rights trend
Technological/Legal Remote Factors
Technological
Cloud computing trend
Technological integration
Growing apps Market
Legal
Increasing Privacy regulations
Increasing telecommunication regulations
As the company continues to go through the above remote factors, there are several others which offer additional opportunities for the enterprise. The next one involves the social/sociological status of the different countries where they conduct business. The company reviews the various opportunities available they strive to meet the needs/desires of the communities. The social environments include "rising use of mobile access and social media" (Lombardo, J., 2017). This opportunity will continue to allow Apple to remain viable within a world of great technological organizations and creativity.
As organizations increase their technical strategies within their operations, this will provide more significant opportunities for Apple as well. These unknown technical factors include "Cloud computing trend, technological integration, and growing Apps market" (Lombardo, J., 2017). Each will maintain its facet within the market, but each can provide growth. Security has become essential to all organizations and while the cloud allows for people to access their data from any location the security of this type of environment can be disconcerting.
As Apple continues to work on the many opportunities above, there are still more, and these are the unknown ecological factors and are needed to assist companies with "business stability trends, product energy efficiency trend, and labor rights trends" (Lombardo, J., 2017). As organizations strive to maintain a green environment, Apple has worked hard to offer recycling options, turning in cell phones and other devices to help the ecological environment. The more Apple can contribute to lessening our technological footprint around the globe the moving earth friendly the company becomes.
The unknown legal factors are the section the company should be most concerned with as these may be beyond the companies control. The statutory factors are threats to the Apple as the governments of the different countries create their ideas of "increasing privacy regulations and increasing telecommunication regulations" (Lombardo, J., 2017). As the world becomes more linked electronically and more mobile devices are utilized rules form an integral part of the market and impact the ROI.
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assessment of the company’s industry environment
Products
Customer base
Apple is a part of the computer industry. The production of equipment is made up of many different products and brands. Apple is one of the top brands of computer products. The industry is more than the hardware or device itself; it is also the software and operating systems. Apple is known for their technology. Apple has their operating systems that are not compatible with any other computer system. They are known for IPod, IPad. iPhone, and personal computers. Apple is used more in the art businesses and schools. Most of the workforce uses Microsoft based operating systems, not Apple products.
The customer base is global. Most people in this day and age use a personal computer system. “Some customers are loyal to Apple products while others are loyal to Microsoft base products for their personal use” (Valueline, 2017).
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assessment of the company’s industry environment
Industry Growth
The computer industry is a growth industry. Businesses and governments have long been converting and utilizing computer and electronic communications for many years to be more efficient, save money and improve efficiency. The rise of the Internet, home computers, and staying connected with friends and family has become a need as opposed to wanting. “The market will continue to grow. Businesses have to store and manage an increasing amount of data because of regulatory requirements and competitive needs. Too, whereas in the past, the data stored was primarily words and numbers, which take up relatively little storage space, now more capacity-hungry audio and video material is being computerized and stored” (Valueline , 2017). The industry is slightly recession-resistant. “Many computer products and services can save businesses time and money. Of course, these companies are not resistant to economic declines, since users can delay buying a new computer. Also if employees are laid off, less new machines are needed. Spending on computing equipment usually holds up relatively well in the early months of a downturn, probably as already budgeted money is spent. Equally, the industry's income progress often pauses coming out of recession, likely as businesses hold off making commitments for new systems until they are sure things are again on an upturn” (Valueline , 2017).
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EVALUATION OF THE external operating environment
Top Competitors:
Microsoft
Amazon
Samsung
As a company that produces many different types of products and services, Apple has a long list of competitors. However, not all of them operate at the same level or offer the same amount of threat. For example, Microsoft is their primary competitor in the personal computer industry, Google and Amazon are their top competitors in the content, or "app" market, and Samsung is their first smartphone and tablet competitor. Other companies, like LG and Nokia, also produce smartphones and tablets, but don't offer the same level of threat as Samsung. Recently, issues with a Samsung tablet resulted in negative press for Samsung, which helped Apple's sales in Q4 2017 (Hanlon, 2016). Apple has long been at the top of the tech industry, but the industry itself is always involving. The biggest threat to Apple today comes not from technology, but from the development of content. Companies like Google and Amazon are trying to create better smartphone apps with more user-friendly features, hoping to beat Apple to the punch (Gurdus, 2017).
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EVALUATION OF THE external operating environment
One Step Ahead:
Apple strives to stay at the top of the “chip market.”
First to Market
Financially-viable investments
For years, Apple has remained one step ahead of its competitors. Several factors help Apple accomplish this. First, they focus on using the top of the market computer chips in their products. The chips inside Apple products dictate how quickly the processor can run, and how much data it can store at once. By investing in third party companies who produce the best chips available, such as Taiwan Semiconductor Manufacturing Company, Apple ensures its products have the processing power consumers demand (Eassa, 2017). Also, Apple strives to be first to market with several key product innovations. The iPhone was one of the first smartphones, and its touch screen technology was leaps ahead of competitors. The manufacturing technique Apple uses to construct its laptops is a trade secret; one its competitors struggle to duplicate (Widjaya, 2016). Another key to Apple's success is its investment in only financially viable products and services. For example, Google's Project Loon and Google Fiber are very bold concepts. If successful, they could result in massive profits for Google. Apple chooses to investment its money into products that, while innovative, are still relatively easy to research and develop (Widjaya, 2016).
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Conclusion
Trust
Future predictions
Strategic Planning
Competitive Actions
Strengths
Weaknesses
Opportunities
Threats
In conclusion, Apple is an organization that clearly has identified the use of environmental scanning to achieve advantages and continue to be the leader in the industry, even now that Steve Jobs is no longer the head of Apple due to unforeseen circumstances.
According to "3 Crucial Behaviors Steve Jobs Instilled In His Best Employees" (2017),
Know what you’re focusing on all the time
Make Sacrifices that matter
Don’t Let Vanity get in the way.” (para. 3, 6, 9), those are the wise words Steve Jobs instilled in his best employees, this is why his vision and mission continue, his employees knew best.
Apple focuses on not only being the best but the leader in the Smartphone, desktop, iPod (music), etc. in the industry and market.
Apple continues to utilize information received to strengthen their strategic planning as the improved technology advancements are developed, and Apple continues to be the leader. Apple has strategic plans that help with the direction of their future to continue to be the leader.
Consumers continue to trust and believe in products produced by Apple; therefore this reinforces their stable business, company, branding, due to enhancing, stimulating, unique, new products with a focus.
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REFERENCES
Eassa, A. (2017, April 27). Apple Inc. Likely to Stay Ahead of Competition in Chip Manufacturing Tech. Retrieved May 05, 2017, from https://www.fool.com/investing/2017/04/21/apple-inc-likely-to-stay-ahead-of-competition-in-c.aspx
Gurdus, E. (2017, February 14). Apple is following the rest of the tech world into content wars. Retrieved May 05, 2017, from
http://www.cnbc.com/2017/02/14/as-apple-stock-hits-new-highs-competitors-chase-content.html
Hanlon, P. (2016, October 15). Apple's Biggest Brand Competitor Just Blew Up. Retrieved May 05, 2017, from https://www.forbes.com/sites/patrickhanlon/2016/10/11/apples-biggest-brand-competitor-just-blew-up/#24e59af82ffd
Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2015). Strategic management: competitiveness & globalization; concepts. Stamford, CT: Cengage Learning.
Lombardo, J. (2017, January 29). Apple Inc. PESTEL/PESTLE Analysis & Recommendations. Retrieved from Business Management: http://panmore.com/apple-inc-pestel-pestle-analysis-recommendations
Mary Martino Follow. (2016, April 11). Apple vs Microsoft. Retrieved May 08, 2017, from https://www.slideshare.net/MaryMartino1/apple-vs- microsoft-60775734
Valueline. (2017). Retrieved from
http://www.valueline.com/Stocks/Industries/Industry_Overview__Computer_and_Peripherals.aspx#.WQ5SNFKZN8c
Widjaya, I. (2016, January 15). How Does Apple Stay Ahead of the Game Without Investing Extensively on R&D? Retrieved May 05, 2017, from http://www.noobpreneur.com/2016/01/15/how-does-apple-stay-ahead-of-the-game-without-investing- extensively-on-rd/3 Crucial Behaviors Steve Jobs Instilled in His Best Employees. (2017). Retrieved from https://www.themuse.com/advice/3-crucial-behaviors-steve-jobs-instilled-in-his-best-employees
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