apple strategic management case study

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How Apple Is Organized for Innovation

• Joel M. Podolny
• Morten T. Hansen

When Steve Jobs returned to Apple, in 1997, it had a conventional structure for a company of its size and scope. It was divided into business units, each with its own P&L responsibilities. Believing that conventional management had stifled innovation, Jobs laid off the general managers of all the business units (in a single day), put the entire company under one P&L, and combined the disparate functional departments of the business units into one functional organization. Although such a structure is common for small entrepreneurial firms, Apple—remarkably—retains it today, even though the company is nearly 40 times as large in terms of revenue and far more complex than it was in 1997. In this article the authors discuss the innovation benefits and leadership challenges of Apple’s distinctive and ever-evolving organizational model in the belief that it may be useful for other companies competing in rapidly changing environments.

It’s about experts leading experts.

Idea in Brief

The challenge.

Major companies competing in many industries struggle to stay abreast of rapidly changing technologies.

One Major Cause

They are typically organized into business units, each with its own set of functions. Thus the key decision makers—the unit leaders—lack a deep understanding of all the domains that answer to them.

The Apple Model

The company is organized around functions, and expertise aligns with decision rights. Leaders are cross-functionally collaborative and deeply knowledgeable about details.

Apple is well-known for its innovations in hardware, software, and services. Thanks to them, it grew from some 8,000 employees and $7 billion in revenue in 1997, the year Steve Jobs returned, to 137,000 employees and $260 billion in revenue in 2019. Much less well-known are the organizational design and the associated leadership model that have played a crucial role in the company’s innovation success.

• Joel M. Podolny is the dean and vice president of Apple University in Cupertino, California. The former dean of the Yale School of Management, Podolny was a professor at Harvard Business School and the Stanford Graduate School of Business.
• MH Morten T. Hansen is a professor at the University of California, Berkeley, and a faculty member at Apple University, Apple. He is the author of Great at Work and Collaboration and coauthor of Great by Choice . He was named one of the top management thinkers in the world by the Thinkers50 in 2019. MortentHansen

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Apple Five Forces Analysis & Recommendations (Porter’s Model)

This Five Forces analysis gives insights into the external factors influencing Apple’s success. Michael E. Porter’s Five Forces analysis framework is a strategic management tool for evaluating the five forces affecting the business organization: customers, suppliers, substitutes, new entrants, and competitors. This Five Forces analysis of Apple Inc. sheds light on what the company does to ensure industry leadership. Despite the negative effects of external factors in the competitive landscape of the computer software and hardware, consumer electronics, and online services markets, Apple’s mission statement and vision statement are fulfilled through relevant business goals and strategies. Based on this Five Forces analysis, the company addresses competitive forces and external factors through effective leaders, such as Tim Cook. This Five Forces analysis indicates external factors that Apple’s strategic efforts must focus on to keep its leadership in the industry.

Based on the Five Forces analysis model, external factors in Apple’s industry environment point to competitive rivalry or intensity of competition, and the bargaining power of buyers or customers as the primary forces for consideration in the company’s strategic planning. Nonetheless, all five forces influence the company’s business situation, together with the effects of other external factors, such as the industry and market trends identified in the PESTLE/PESTEL analysis of Apple Inc .

Summary: Five Forces Analysis of Apple Inc.

Apple’s generic competitive strategy and intensive growth strategies are partly based on competitive forces in the external business environment. These forces limit or reduce the firm’s market share, revenues, profitability, and business development potential. This Five Forces analysis points to the following strengths or intensities of competitive forces in Apple’s industry environment:

• Competitive rivalry or competition: Strong force
• Bargaining power of buyers or customers: Strong force
• Bargaining power of suppliers: Weak force
• Threat of substitutes or substitution: Weak force
• Threat of new entrants or new entry: Moderate force

Recommendations. Considering the results of this Five Forces analysis, Apple must focus its attention on competitive rivalry and the bargaining power of buyers. This external analysis supports the company’s current position of continuous innovation. Innovation and the business competitive advantages shown in the SWOT analysis of Apple address the five forces in the external environment, although much of the company’s effort is for strengthening its position against competitors and for attracting customers to its products. An applicable course of action is to intensify research and development for innovation to develop novel products that complement iPhones, iPads, and other current products. Apple can also improve its support and resources for software or app developers, to strengthen the company’s ecosystem of hardware, software, and online services against the competitive challenges identified in this Five Forces analysis.

Competitive Rivalry or Competition with Apple (Strong Force)

Apple faces the strong force of competitive rivalry or competition. This component of Porter’s Five Forces analysis model determines the intensity of the influence that competitors have on each other. In Apple’s case, this influence is based on the following external factors:

• High aggressiveness of technology firms (strong force)
• Low differentiation of many products (strong force)
• Low switching cost (strong force)

Competitors’ aggressiveness in innovation and marketing imposes a strong force in the information technology industry environment. In the market for consumer electronics, software, and Internet services, Apple competes with Google (Alphabet) , Microsoft , Samsung, and Sony . In the video-streaming market, Netflix , Disney , Amazon , and Facebook (Meta) compete with Apple TV Plus. This Five Forces analysis also considers other technology firms, such as IBM and Intel , which influence Apple’s competitive environment. Moreover, in terms of product differentiation, products in the market are generally similar in fulfilling specific purposes. For example, many popular apps are available for Android and iOS devices, and cloud storage services from different companies are similar and available to users on different platforms. In this Five Forces analysis of Apple, such a condition creates a strong force by making it easy for customers to switch to other sellers or providers. On the other hand, the low switching cost means that it is easy for customers to switch from Apple to other brands, based on price, function, accessibility, network externalities, and related concerns. The combination of these external factors in this part of the Five Forces analysis leads to tough competitive rivalry that is among the most significant considerations in Apple’s strategic management.

Bargaining Power of Customers/Buyers (Strong Force)

The bargaining power of buyers is strong in affecting Apple’s business. This component of Porter’s Five Forces analysis model determines how buyers’ purchase decisions and related preferences and perceptions impact businesses. In Apple’s case, buyers’ strong power is based on the following external factors:

• Small size of individual buyers (weak force)
• High availability of information to buyers (strong force)

It is easy for customers to change brands, thereby making them powerful in compelling Apple to ensure customer satisfaction. On the other hand, each buyer’s purchase is small compared to the company’s total revenues. In this Five Forces analysis of Apple, such a condition makes customers weak at the individual level. However, the availability of detailed comparative information about competing products’ features empowers buyers to shift from one provider to another. This external factor enables buyers to exert a strong force in the industry, although promotional strategies and tactics in Apple’s marketing mix (4P) can communicate tailored information to persuade customers to buy the company’s products. Thus, this part of the Five Forces analysis shows that Apple must include the bargaining power of buyers or customers as one of the most significant strategic variables in the business.

Bargaining Power of Apple’s Suppliers (Weak Force)

Apple Inc. experiences the weak force or bargaining power of suppliers. This component of the Five Forces analysis model indicates the influence of suppliers in imposing their demands on the company and its competitors. In Apple’s case, suppliers have a weak bargaining power based on the following external factors:

• Moderate to high number of suppliers (weak force)
• Moderate to high overall supply (weak force)
• Large size of some equipment and component manufacturers (strong force)
• High ratio of firm concentration to supplier concentration (weak force)

The global size of its supply chain allows Apple Inc. to access many suppliers around the world. In Porter’s Five Forces analysis context, the resulting high number of suppliers is an external factor that presents only a weak to moderate force against the company. Also, the moderate to high overall supply of inputs, such as semiconductors, makes individual suppliers weak in imposing their demands on Apple. However, some large suppliers, such as OEMs and producers of chips, significantly influence the industry. Nonetheless, in this Five Forces analysis case, the high ratio of firm concentration to supplier concentration limits suppliers’ power and influence in the industry. This external factor reflects the presence of a small number of big companies, like Apple and Samsung, in contrast to a larger number of medium-sized and large suppliers. Thus, this part of the Five Forces analysis shows that the bargaining power of suppliers is a minor issue in developing Apple’s operations management strategies for supply chain management, value chain effectiveness, innovation, and industry leadership.

Threat of Substitutes or Substitution (Weak Force)

The competitive threat of substitution is weak in affecting Apple’s computing technology, consumer electronics, and online services business. This component of the Five Forces analysis framework determines the strength of substitute products in attracting customers. In Apple’s case, substitutes exert a weak force based on the following external factors:

• Moderate to high availability of substitutes (moderate force)
• Low performance of substitutes (weak force)
• Low buyer propensity to substitute (weak force)

Some substitutes for Apple products are readily available in the market. For example, instead of using iPhones, people can use digital cameras to take pictures, and landline telephones to make calls. In this Five Forces analysis of Apple, such an external factor exerts a moderate force in the industry environment. However, these substitutes have low performance because they have limited features. Many customers would rather use Apple products based on convenience and advanced functions. This condition weakens the force of substitution in impacting the company’s business in this Five Forces analysis context. Also, buyers have a low propensity to substitute. For instance, customers would rather use smartphones than go through the hassle of buying and maintaining a digital camera, an analog phone, and other devices. This part of the Five Forces analysis shows that Apple does not need to prioritize the threat of substitution in management decisions for business processes, like marketing, market positioning, and product design and development.

Threat of New Entrants or New Entry against Apple (Moderate Force)

Apple Inc. experiences the moderate force or threat of new entrants. This component of Porter’s Five Forces analysis model indicates the possibility and effect of new competitors entering the market. In Apple’s case, new entrants exert a moderate force based on the following external factors:

• High capital requirements (weak force)
• High cost of brand development (weak force)
• High capacity of some potential new entrants (strong force)

Establishing a business to compete with Apple Inc. requires high capitalization. Also, it is extremely costly to develop a strong brand to compete with large companies, like Apple. These external factors make new entrants weak in this Five Forces analysis case of the IT business. However, there are large firms with the financial capacity to enter the market. For example, Google has already done so through its consumer electronics. Samsung also used to be a new entrant. These examples show that there are large companies that have the potential to directly compete with Apple Inc. in multiple markets. Thus, the overall threat of new entry is moderate. This part of the Five Forces analysis shows that Apple must maintain its competitive advantages through innovation and marketing to remain strong against new entrants’ moderate competitive force.

• Apple empowers small businesses to grow and serve their customers .
• Apple Inc. – Form 10-K .
• Apple introduces global developer resource for labs, sessions, and workshops .
• Apple scores record 13 Academy Award nominations .
• Jahan, S. A., & Sazu, M. H. (2023). Role of IoTs and analytics in efficient sustainable manufacturing of consumer electronics. International Journal of Computing Sciences Research, 7 , 1337-1350.
• Sforcina, K. (2023). Digitalizing Sustainability: The Five Forces of Digital Transformation . Taylor & Francis.
• U.S. Department of Commerce – International Trade Administration – Software and Information Technology Industry .
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• International Marketing

Apple’s Global Strategy: Simplicity, Innovation, and Adaptability

• January 19, 2024

Table of Contents

Delving into apple’s global strategy, apple’s core values and the simplicity mantra, apple’s global branding strategy, apple’s global marketing strategy, case studies, apple’s global tax strategy.

• The Cornerstones of Apple’s Global Strateg

In the ever-evolving landscape of technology, Apple stands as a beacon of innovation and design, captivating consumers worldwide with its sleek products and user-centric approach. With a global presence spanning over 150 countries and an estimated $383.29 billion in revenue in 2023, according to Statista , Apple’s success is a testament to its astute global strategy , a harmonious blend of differentiation, adaptability, and unwavering commitment to quality.

Apple’s global strategy is rooted in the concept of “differentiation,” a strategic approach that sets it apart from its competitors. By consistently pushing the boundaries of innovation, Apple has carved a niche for itself, offering products that are not only technologically advanced but also aesthetically pleasing and user-friendly . This differentiation has allowed Apple to capture a loyal customer base and establish a strong brand identity across the globe .

Apple’s global strategy has evolved over time, adapting to the changing dynamics of the international market. In its early days, the company focused heavily on innovation, relentlessly pursuing cutting-edge technologies and groundbreaking designs. However, as the company matured, it recognized the importance of customer experience and began placing a greater emphasis on this aspect . Today, Apple’s global strategy is a seamless blend of innovation and customer focus, ensuring that its products and services align with the needs and preferences of consumers worldwide.

At the heart of Apple’s global success lies a set of core values that permeate every aspect of the company’s operations , from product design to marketing campaigns. These values, deeply rooted in the company’s identity, guide Apple’s approach to innovation, customer experience, and global expansion.

• Accessibility: Apple strives to make its products and services accessible to everyone, regardless of their physical or cognitive abilities. This commitment is evident in features like VoiceOver , which provides spoken feedback for visually impaired users, and AssistiveTouch , which allows users with limited mobility to control devices with gestures.
• Educational Support: Apple recognizes the transformative power of technology in education and actively supports initiatives that promote digital literacy and learning. The company’s initiatives include Apple Teacher certification programs, curriculum resources, and educational apps that enhance teaching and learning.
• Carbon Neutrality: Apple is committed to reducing its environmental impact and is working towards becoming carbon neutral by 2030 . The company has implemented numerous initiatives to minimize its carbon footprint, including transitioning to renewable energy sources, designing energy-efficient products, and recycling materials.
• Inclusive Work Environment: Apple is committed to creating a diverse and inclusive workplace where everyone is valued and respected. The company has implemented policies and programs that promote diversity hiring, provide equal opportunities for advancement, and foster a culture of inclusion.
• Privacy: Apple is a staunch advocate for user privacy and believes that individuals should have control over their personal data. The company has implemented robust privacy protections in its products and services, including encryption, data minimization, and transparency.
• Equity and Justice: Apple is committed to promoting equity and justice in its operations and throughout the world. The company supports initiatives that address social and economic inequalities, promotes human rights, and advocates for environmental sustainability.
• Supplier Responsibility: Apple is committed to ensuring that its suppliers adhere to high ethical standards and treat their workers with respect. The company has established stringent supplier codes of conduct and conducts regular audits to monitor compliance.

These core values, collectively, form the foundation of Apple’s global strategy. They guide the company’s product design, marketing campaigns, and customer service interactions , ensuring that Apple delivers products and experiences that are not only technologically advanced but also aligned with its values of simplicity, accessibility, and inclusivity.

Simplicity is a cornerstone of Apple’s design philosophy, evident in the clean aesthetics, intuitive interfaces, and user-friendly features of its products. This emphasis on simplicity has resonated with consumers worldwide , making Apple products accessible to a broad audience and fostering a loyal customer base.

By upholding its core values and embracing simplicity, Apple has not only achieved global success but also established itself as a role model for other companies seeking to build a sustainable and ethical business model.

Apple’s global branding strategy is a delicate balance of standardization and adaptation, ensuring that the company maintains a consistent brand identity while also resonating with consumers in diverse cultures and markets. On the one hand, Apple strives to project a unified brand image, conveying its core values of innovation, simplicity, and elegance across all its products, marketing campaigns, and customer interactions. This standardization helps reinforce Apple’s reputation for quality and consistency, fostering brand loyalty and recognition worldwide.

On the other hand, Apple recognizes the need to adapt its branding to local markets and cultures. This adaptability is evident in the company’s product offerings, marketing messages, and customer support. For instance, Apple has developed localized versions of its products with features and specifications tailored to specific regions . Additionally, the company’s marketing campaigns often incorporate cultural nuances and local references to connect with consumers on a deeper level.

Apple’s ability to balance standardization and adaptation has been a key factor in its global success. By maintaining a consistent brand identity, the company has built a strong foundation of brand recognition and loyalty . However, by adapting to local markets, Apple has been able to cater to the needs and preferences of consumers in different parts of the world, expanding its reach and deepening its customer base.

Examples of Apple’s Standardization

• Unifying Brand Elements: Apple employs a consistent design language across its products, including clean aesthetics, minimalist interfaces, and sleek silhouettes. This consistent visual language helps establish a cohesive brand identity.
• Global Marketing Campaigns: Apple’s marketing campaigns often feature universal themes of innovation, creativity, and personal empowerment, appealing to a global audience.
• Seamless Customer Experience: Apple’s customer support is available in multiple languages, and the company’s online store can be accessed in over 40 countries, ensuring a consistent experience for customers worldwide.

Examples of Apple’s Adaptation

• Localization of Products: Apple offers localized versions of its products, such as the iPhone and iPad, with features and specifications tailored to specific regions. For instance, the iPhone SE 2020 is optimized for Indian consumers with support for two SIM cards and regional cellular bands.
• Culturally Sensitive Marketing: Apple’s marketing campaigns often incorporate cultural nuances and local references to connect with consumers on a deeper level. For example, the company’s “ Shot on iPhone ” campaign features images captured by photographers from around the world, showcasing the diversity of visual storytelling.
• Localized Customer Support: Apple provides customer support in multiple languages and offers localized resources, such as online FAQs and tutorials, tailored to specific regions. The company also partners with local businesses to offer personalized support services.

Apple’s success in balancing standardization and adaptation is a testament to its understanding of the complexities of global branding. By striking this delicate balance, the company has been able to maintain a strong brand identity while also resonating with consumers in diverse markets , solidifying its position as one of the world’s most recognizable brands.

Apple’s global marketing strategy is a multifaceted approach that revolves around four key pillars: wide acceptance, brand value, competitive advantage, and low imitation . These pillars are intertwined, working together to propel Apple’s success in the global marketplace.

Wide Acceptance

Apple’s products have achieved widespread acceptance worldwide, attracting a loyal customer base across diverse demographics and regions . This widespread appeal is attributed to several factors, including:

• Innovative Designs: Apple consistently pushes the boundaries of design, creating products that are both aesthetically pleasing and user-friendly. The company’s sleek, minimalist aesthetic has become synonymous with Apple’s brand identity.
• User-Friendly Interfaces: Apple’s products are renowned for their intuitive interfaces, making them easy to navigate and use for people of all technical backgrounds.
• Effective Marketing Campaigns: Apple’s marketing campaigns are known for their creativity and emotional appeal, resonating with consumers on a personal level. The company often uses storytelling and cultural references to connect with diverse audiences.

Brand Value

Apple has built a strong brand value over the years, characterized by perceptions of quality, innovation, and premium craftsmanship . This brand value has been instrumental in attracting consumers and fostering brand loyalty.

• Reputation for Quality: Apple is consistently rated among the most reliable and durable consumer electronics brands. This reputation for quality has earned the company a loyal following among consumers who value long-lasting products.
• Innovation: Apple is renowned for its pioneering spirit, consistently introducing innovative products that redefine the technological landscape. This focus on innovation has helped maintain Apple’s cutting-edge reputation and attract early adopters.
• Premium Branding: Apple’s products are positioned in the premium segment of the market , commanding higher prices than its competitors. This premium positioning contributes to the company’s brand value and reinforces its image as a luxury brand.

Competitive Advantage

Apple maintains a competitive advantage in the global market through a combination of factors, including:

• Strategic Product Differentiation: Apple differentiates its products from competitors through unique features, design elements, and user experiences. This differentiation strategy has helped the company carve out a distinct niche in the market.
• Focus on Customer Experience: Apple prioritizes customer satisfaction, creating a seamless and personalized experience for its users. This focus on customer experience has helped foster brand loyalty and attract new customers.
• Global Retail Presence: Apple has a strong global retail presence, with over 500 stores in 23 countries, as per Statista . This extensive retail network provides consumers with easy access to Apple products and services.

Low Imitation

Despite facing intense competition from numerous technology giants, Apple has been able to maintain a relatively low level of imitation . This is due to several factors, including:

• Continuous Innovation: Apple’s relentless pursuit of innovation makes it difficult for competitors to replicate its products and services.
• Strengthened Intellectual Property Protection: Apple has a robust intellectual property portfolio, providing legal protection for its innovative designs and technologies.
• Brand Loyalty: Apple’s loyal customer base is less susceptible to imitation, as they are often willing to pay a premium for Apple products due to their brand loyalty and trust in the company.

Apple’s successful global marketing strategy is a testament to its ability to balance innovation, brand value, competitive advantage, and low imitation. By consistently delivering high-quality products, cultivating a strong brand reputation, and prioritizing customer experience, Apple has cemented its position as one of the world’s leading technology companies .

Apple’s remarkable global success is evident in its ability to penetrate and dominate markets as diverse as China and India. These two countries represent two of the world’s most populous and rapidly growing economies, offering significant opportunities for technology companies. Apple’s success in these markets is a testament to its ability to adapt its global strategy to local conditions and preferences .

China has become Apple’s second-largest market , with over 190 million active iPhones in use as of 2023 ( Statista , 2023). Apple’s success in China can be attributed to several factors, including:

• Pricing Strategy: Apple has adopted a tiered pricing strategy in China, offering a wider range of products at lower price points to cater to a broader range of consumers.
• Distribution Channels: Apple has established a strong network of authorized resellers and retail stores in China, making its products readily available to consumers across the country.
• Partnerships with Local Businesses: Apple has partnered with Chinese telecommunications companies, e-commerce platforms, and content providers to expand its reach and customer base.
• Localization: Apple has made sure to localize its products , marketing campaigns, and customer support for the Chinese market, ensuring that they resonate with local consumers.

Despite facing challenges such as piracy and counterfeiting, Apple has successfully established itself as a premium brand in China . The company’s commitment to innovation, design, and customer experience has resonated with Chinese consumers, who are increasingly embracing technology.

India is another key market for Apple, with a growing middle class and increasing smartphone penetration. Apple’s strategy in India has focused on tailoring its products and services to the specific needs and preferences of Indian consumers .

• Price Sensitivity: Apple has introduced more affordable iPhone models in India, such as the iPhone SE, to attract price-conscious consumers.
• Online Sales: Apple has heavily invested in its online presence in India, making it easier for consumers to purchase its products online.
• Partnerships with Local Businesses: Apple has partnered with Indian e-commerce platforms, mobile carriers, and banks to expand its distribution reach and payment options.
• Localization: Apple’s localization strategy for the Indian market has included the adaptation of its products, marketing campaigns, and customer support, including the development of Hindi-language versions of its software.

Apple’s success in India has been gradual but steady. The company has faced challenges such as competition from local smartphone brands and a lack of brand recognition in rural areas. However, Apple’s commitment to innovation and adaptation has helped it gain traction in this emerging market .

Apple’s global success has been accompanied by scrutiny over its tax practices, particularly its use of a subsidiary company in Ireland to minimize its global tax liability. This strategy, known as “ Double Irish with a Dutch Sandwich ,” has allowed Apple to shift profits offshore, effectively reducing its tax payments in the United States and other countries .

While Apple has defended its tax strategy, arguing that it complies with all applicable laws, it has faced criticism from governments, tax experts, and consumer advocacy groups . Critics argue that Apple’s tax practices amount to corporate tax avoidance, depriving governments of revenue that could be used for public services.

Advantages of Apple’s Tax Strategy

Apple’s tax strategy has several potential advantages for the company, including:

• Reduced Tax Burden: By shifting profits offshore, Apple can effectively reduce its tax payments, which can boost its profitability and financial returns to shareholders.
• Increased Competitiveness: Lowering tax costs can give Apple a competitive advantage over other companies, allowing it to invest more in research and development, marketing, and product development.
• Enhanced Shareholder Value: By reducing its tax burden and increasing profitability, Apple can improve its financial performance and boost shareholder value.

Disadvantages of Apple’s Tax Strategy

Apple’s tax strategy has also been criticized for several potential disadvantages, including:

• Public Image Concerns: Apple’s tax practices have tarnished its public image, raising concerns about corporate social responsibility and ethical behavior.
• Legal Challenges: Governments and tax authorities around the world have been investigating Apple’s tax strategy, and the company faces potential legal challenges that could lead to fines and penalties.
• Political Fallout: Apple’s tax practices have created political tensions, with some countries considering imposing stricter tax laws to prevent multinational corporations from shifting profits offshore.

A Balancing Act

Apple’s global tax strategy has been a source of controversy, highlighting the delicate balance between corporate profitability and societal responsibility . While the company may benefit financially from its tax practices, it also faces reputational risks and potential legal repercussions. Apple must carefully navigate this complex landscape to maintain its global success while addressing concerns about its ethical conduct.

The Cornerstones of Apple’s Global Strategy

Apple’s journey to becoming one of the world’s most recognizable and successful companies is a testament to its ability to balance simplicity, innovation, and adaptability. From its early days as a niche computer manufacturer to its current status as a global technology powerhouse, Apple has consistently demonstrated its knack for understanding and meeting the evolving needs of consumers worldwide .

Apple’s core values, particularly its emphasis on simplicity, have permeated every aspect of its business. The company’s products are renowned for their user-friendly interfaces and intuitive designs , making them accessible to a wide range of users, regardless of their technical expertise. This commitment to simplicity extends to Apple’s marketing campaigns, which often use storytelling and emotional appeals to resonate with consumers on a personal level.

Apple’s unwavering focus on innovation has been another driving force behind its global success. The company has consistently pushed the boundaries of technology, introducing groundbreaking products that have transformed the way people interact with the digital world . From the revolutionary iPhone to the sleek AirPods, Apple has consistently redefined the standards for innovation in the technology industry.

Alongside innovation and simplicity, Apple has also demonstrated remarkable adaptability in its global expansion . The company has successfully tailored its products, marketing strategies, and customer support to suit the unique needs and preferences of different cultures. This adaptability has been crucial in Apple’s ability to penetrate and dominate markets as diverse as China and India, where local competitors pose significant challenges.

Apple’s approach to globalization is not without its critics. The company’s tax strategy, which has been the subject of intense scrutiny, has raised concerns about corporate social responsibility and ethical behavior. As Apple continues to expand its global footprint, it will need to address these concerns and demonstrate its commitment to operating responsibly and ethically in all the markets it serves.

Looking to the future, Apple faces a number of challenges and opportunities. The company will need to continue to innovate and adapt to the ever-changing technological landscape . It will also need to navigate the complexities of global markets, ensuring that its products and services remain relevant and appealing to consumers worldwide.

Apple’s journey to global success is a compelling case study in how a company can build a strong brand and establish a lasting presence in the international arena. By embracing simplicity, innovation, and adaptability, Apple has demonstrated that it has the vision and resilience to continue to thrive in an increasingly competitive and interconnected world .

As Apple embarks on the next chapter of its global journey, it remains to be seen how the company will navigate the evolving landscape of technology, consumerism, and globalization. However, one thing is certain: Apple’s commitment to innovation and its ability to understand the needs of consumers worldwide will continue to be key drivers of its success in the years to come.

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Apple Strategic Management: Planning and Management Process — Apple Company Essay

Introduction, description and analysis of the sector of industry, pestel analysis, vision, mission and objectives, swot analysis for apple inc., strategy diamond analysis: apple company, business strategy, apple management strategy, competitive advantage, vrine model: apple, value chain-cage distance framework, bcg matrix analysis, recommendations, reference list.

In every organization, there is a need to have an effective strategic management plan. In the contemporary world, the need for an effective strategic management plan has significantly increased due to the increased level of competition in the market. The contemporary business world has been characterized by a very high level of competition, which has increased the need for effective strategic management processes.

Strategic management can be viewed as the process through which an organization formulates and implements critical decisions, which plays a pivotal role in determining the performance of an organization. The ability of an organization to meet its long-term goals is determined by its strategic management processes.

Through strategic management, an organization can easily achieve both its long-term and short-term goals. Most of the top-performing companies in the global market usually have the most effective strategic management practices. Apple Inc has well-developed effective strategic management practices. This has helped the company to retain a high level of performance.

Apple Inc has managed to offer unique products in the market, a fact that has enabled the company to win a significant proportion of the market share. For instance, the company has managed to provide high-quality products when compared to its competitors.

It has also managed to develop a good relationship with its customers, a fact that has enabled the company to attract and retain a large number of customers. Apple Inc also consults high-performing companies while seeking outsourcing services. In the process, the company has managed to retain a significantly high level of performance.

Apple Inc has utilized its available resources maximally, a situation which has also contributed to its success. For instance, the company has highly productive and experienced personnel that have significantly contributed to the company’s high level of performance.

The company also has adequate financial resources, which have supported perpetual research activities. Continued research has enabled the organization to maintain a high level of innovation. Through these priorities, Apple Inc has managed to develop a good reputation for quality products hence attracting many customers.

In the recent past, the market has drastically changed. More competitors are entering the industry, a thing that has resulted in risky price wars. In order to resolve this problem, Apple Inc has decided to expand its market so as to increase its level of sales.

Apple Inc was founded in 1976 in Santa Clara, California. The establishment of the company was the contribution of Steven Jobs and Steve Wozniak. The two were led by the passion for developing a computer that was more user-friendly than the existing computers.

A couple of years after its establishment, the company recorded a drastic increase in the level of its sales. In 1984, the company made a major step when it unveiled the Macintosh computer, which earned the company great recognition. Since then, the company has been engaged in innovations and development, which has helped it introduce quality products in the market.

Apple is a multinational corporation with operations in a number of countries all over the world. The company is centered in the United States, and it is involved in the manufacture as well as marketing of computers. The company has been in the industry for a long period where it has produced a wide range of computers.

The company is involved in the production of products such as iPods, iPhones, and Macintosh computers. The company is also involved in the production of other products like iPads. For instance, the company introduced a unique ipad2 which has recorded a recommendable performance in the market. Ipad2 has several features that make it unique from others, especially those provided by its competitors. It is very thin, and therefore it is more portable than the other products.

This attracts a significant number of customers because most people do not like carrying gorgeous electronic devices. This product also has batteries that can last for more than ten hours. In other words, Apple has managed to introduce into the market high-quality products hence winning a significant number of customers.

The history of Apple Inc can be traced back to 1976 when the company started in California. Since its establishment, the company has concentrated on computers. However, the company has done significant work in the entire electronic industry.

In connection to this, the company decided to omit the word computer in its name to Apple Inc, that more describes its achievements not only in the computer world but also in the entire electronic industry (Malhotra 2007). The company has a total of about 37,000 employees. The company maintains good working conditions for its employees while giving adequate attention to their motivation. This has helped in employee retention hence retaining competent and experienced personnel.

In the recent past, Apple has been widely known for its digital entertainment devices, which are widely used all over the world. It has introduced a wide range of entertainment devices, which have recorded a high level of performance.

The PC industry is characterized by a large number of players who operates in the industry. Apple Inc is one of the oldest players in the industry. Since its entry, many other companies have entered into the industry. This has affected Apple’s market share significantly since they intensify the level of competition in the industry. For instance, the market share for Apple fell by 8% in 1983.

In the recent past, there have been negotiations requiring Apple to license the Mac OS. For instance, Microsoft and Bill Gates insisted that Apple should license Mac OS in the late 1970s. However, Apple failed to license it. As a result, Microsoft developed its operating system.

In every organization, it is important to carry out the PESTEL analysis in order to make critical organizational decisions. This analysis is of great importance to Apple Inc. For instance, this analysis enables the company to understand Political, Economic, Social, Technical, Environment, and Legislative factors which may have a significant impact on the organization’s activities.

Social analysis is of great importance to Apple Inc, especially in the current contemporary competitive market. In order to interact with its customers adequately, Apple Inc has opened its own retail stores in different places around the world. Through their outlets, they provide repair services and collect the views of the customers at the same time. In the process, the company manages to improve the quality of services to its customers.

Through environmental analysis, Apple has managed to understand its market networks. For instance, the company manages to understand the costs of locating its stores in various places. The company locates its stores in places where it minimizes costs and maximizes sales at the same time.

This has helped the company in maximizing its profits. Environment analysis also helps Apple understand public opinion regarding its products. This information plays a pivotal role in future innovation plans. This is because innovations should be directed toward the satisfaction of consumer needs.

Over the past, Apple has recorded a recommendable performance through invention and reinventions. The company is committed to providing the best computing experience to users, including educators, creative professionals, students, and other consumers worldwide (Brainmass 2004). The company has managed to realize this by providing high-quality software, hardware, and internet offerings.

Apple is determined to maintain a secure and quality environment, safety, and health for its customers, employees, and the entire community all over the globe. The company emphasized the need to maintain a friendly environment for the current as well as the future generation. In order to achieve this, the company has integrated all these aspects into its management practices to facilitate realizing its vision.

Competitors

As already noted, the contemporary market for PC has become more saturated. This has increased the level of competition in the industry. There are several negative consequences associated with a high level of competition. For instance, increased competition may result in price wars. This may threaten the performance of an organization.

Apple’s main competitors include Hewlett-Packard, Dell, and IBM. Since Apple is involved in the production of a wide range of products, it also faces competition from Microsoft in a range of areas in the personal computer software industry (Malhotra 2007). The computer market has been characterized by a high level of technological development both in software and software advancement.

Therefore, there is stiff competition faced by each of the manufacturers. Failure to innovate would mean a complete exit from the industry because consumers are seeking computers that are up-to-date with technological advancement. Through this management, Apple managed to revive its activities.

The company later continued with value creation in the organization, which led to significant growth. Apple has a group of experienced and competent engineers who have played a major role in innovations and the development of new ideas. Under Job’s management, the organization has managed to utilize these resources in order in the most useful ways.

The company also has several retail stores which are operating in different parts of the world. This is another important resource that has helped in advertising as well as distributing the company’s products. Through its stores, Apple has managed to collect information from consumers about their views on the product.

This information plays a pivotal role in directing future innovations. It would be an organization’s wish to produce goods and services that satisfy their needs. This information is therefore necessary for maximizing the level of consumer satisfaction.

Through its stores, the company has managed to develop a good image and brand, providing quality service to the customers. Over the past, many companies have failed in their effort to distribute their products through their own stores, but Apple has recorded a very good level of performance. Therefore, retail shops are a valuable resource to Apple since not many organizations have managed to realize this.

Resources & Capabilities

Apple has a wide range of research, both tangible and intangible. In order for any organization to maintain a high level of performance in the market, there is a need for adequate resources to facilitate the process of meeting various goals.

One of the major company’s resources is based on its ability to maintain a high level of innovation. Apple Inc has managed to maintain a high level of innovation in its products. This has been facilitated by its ability to conduct intensive research.

As a result, the company has managed to provide products that are up to date with technological development. This has been realized through teamwork, which has encouraged the exchange of ideas among the employees. This has significantly contributed to the company’s ability to win and retain its customers.

Apple has well-developed networks and relationships in its operations. For instance, the company has a very good relationship with OEM partners. This has provided the company with an opportunity to outsource some of its manufacturing processes. As a result, the company has managed to produce high-quality products. The company has also managed to reduce its operational costs.

One of the most valuable resources to the Apple Company is Steve Jobs. Steve has recorded a recommendable level of performance at Apple under his management. The company recorded a drastic improvement soon after he started managing the organization. For instance, when he discovered that the failure of the organization was a result of the leaders during the period, he sacked them and made various adjustments.

Every organization has its own strengths and weaknesses. Similarly, Apple Inc has several strengths and weaknesses. The company has a number of strengths that have significantly contributed to its success. On the other hand, its weakness undermines its effort to retain its high-level performance.

The company has enjoyed a stable line of products which is easy to use. Over the recent past, the company has integrated its operations with Microsoft products, and others have helped the company in developing a wide customer base. The company has managed to retain a high level of innovation.

This has enabled it to introduce high-quality products with more features. For instance, the company introduced ipad2 early this year. The ipad2 has come with a wide range of features that have attracted a wide range of customers. In addition, this product (iPad2) has a long-life battery that can last for ten hours. This is a major improvement since most of the similar products have low battery life.

Apple Inc has also enjoyed financial stability. The company has adequate cash reserves, a fact which has helped the company in funding activities like research which fosters innovation.

The company has also managed to retain a high level of innovation. This has been realized through continuous research and development. The management has realized the need for research to maintain continued innovation and development in its product.

Therefore, a significant amount of funds is allocated to the research operations. Research processes have also enabled the company to improve the quality of its products with time. This has helped to increase the level of customer satisfaction.

Apple Inc has already developed a strong brand. This has developed a strong relationship with its customers hence forming a stable customer base. The company’s products have a good reputation throughout the world. It is, therefore, even easier to market its products in the global market.

In other words, a strong brand name has increased efficiency and reduced operational costs in the company. It costs a lot in terms of financial and time resources for an organization to build such a strong brand. Therefore, this provides a great opportunity for the company.

In every organization, the working personnel plays an important role in determining the performance of an organization. Some leaders can dip an organization into failure, while others can promote success. Steve is one of the most important leaders who have been of great importance to Apple.

Before he joined the company, Apple experienced hard financial situations which threatened its existence in the increasingly competitive market (Malhotra 2007). The company was also characterized by a low level of innovation before Steve joined the management. However, soon after joining the company, he made drastic changes that led to changes in operations that encouraged innovation and fostered new ideas.

Despite of wide range of strengths associated with Apple Inc, the company has some weaknesses. These weaknesses have tended to threaten the company’s efforts to achieve its goals and realize its missions.

Apple Company has been one of the strongest players in the United States market. Over the past, the market has been faced with tight economic difficulties. The saturation of the US PC market has even made things worse. The company is therefore forced to spend a lot of cash at the expense of increasing market pressures without strategic innovation integration.

Opportunities

Apple has several opportunities which form room for further improvements. For instance, the company has the opportunity to develop its music player and iTunes into mobile phone format (Datamonitor 2006). This provides a great opportunity for the company as it will help in expansion.

Another opportunity for the company lies in the wide range of its wireless products. The demand for wireless products is expected to increase in the future. Therefore, the company will be able to increase its sales in the future. The market will expand, and the company will be able to increase the number of its customers. Apple has positioned itself with the necessary resources in order to benefit from this growth (Datamonitor 2006).

For instance, the company has managed to come up with a wireless technology known as Airport. Through this technology, users can create computer networks and enjoy the internet without necessarily having cables (Datamonitor 2006). Through the Airport technology, users can access a high rate speed at a radius of 150 feet from where the airport base is located. This opportunity will provide a good base for the company’s growth.

In March 2006, Apple’s market share in the US for MP3 players increased to 78% from 71% in December 2005 (Datamonitor 2006). However, the company’s performance in the international market remained relatively lower. The company is planning to penetrate further in the international as well as the domestic market. This will help in increasing the company’s market share.

Apple Inc Company has been faced with several threats in its effort to expand its market share. One of the major threats that face the organization is strong competition. The company is faced with a very high level of competition in all its fields of production, ranging from software to hardware, among other products. The industry is also characterized by a very high level of innovation which has led to the introduction of new products in the market with performance, price, and feature competition.

This competition has resulted in price wars. Some of Apple’s competitors have significantly lowered the prices of their products in an attempt to increase their market share. As a result, Apple’s financial status may continue to deteriorate since the level of competition is continuously rising. This leads to a reduction in the profit margins.

Another threat facing Apple Inc company is the slowdown in the Eurozone economy. This may be accompanied by a high level of unemployment. As a result, the level of spending falls because disposable household income is relatively low. A household bubble that may burst at any time also poses a big danger to the economy. These economic uncertainties affect the level of spending negatively, a thing that has led to a significant cut down in information technology products.

In the contemporary world, every organization has its own strategies aimed at realizing its individual goals. However, the most important things to consider are the effectiveness of these strategies. An organization may implement strategies that may be of little importance in a given situation. Therefore there is a need for preparations in order to have effective policies.

Policy diamond contains various facets, which include Arenas, Vehicles, Differentiators, Staging, and Economic logic. The facet arena implies that the strategy must match the market arena. For instance, Apple Inc locates its stores in the areas where its customers are located.

This helps the organization in maximizing its sales by utilizing the available opportunities while minimizing its costs. Differentiators are unique features of the firm. In this case, Apple has managed to manufacture both software and hardware. This differentiates the company from other companies. Through these differentiators, Apple is able to achieve positive performance (economic logic).

Vehicles, on the other hand, help an organization in applying its strategy to reach its destination. Apple has been using internal development to realize its goals. The company has intensified research which has helped maintain continuous innovation. Research helps in the generation of new ideas and therefore promotes innovation.

As already noted, Apple Inc has recorded a commendable performance over the past. An effective business strategy that the company has applied has to a greater extent, contributed to its success. Most of the successful companies have managed to develop and execute effective business strategy. This can clearly be described through the strategic positioning model.

It has been revealed that the main problem which Apple faces is competition. In order to overcome this problem, there is a need for the company to have an effective strategic positioning. Through this strategy, Apple has managed to position itself among other organizations in such a way that it has managed to stand out from many.

Apple’s strategic target is in a broad industry and characterized by broad differentiation. Apple has managed to differentiate its product through innovation. This has been the main factor that has promoted the company’s success over the past. A good example is when Apple dominated the PDA market when it introduced Newton in 1993.

Later, the company introduced into the market iMac, which was a device that was easy to use. These were just some of the innovations which the company has developed. Through the strategy of the product differentiation, Apple has managed to reduce threats that are posed by a high level of competition. Although differentiation comes along with a cost, this cost acts as an entry barrier to other companies.

In its effort to maximize its performance and profitability, Apple has applied a diversified strategy in its production operation. Apple Inc is involved in the production of both hardware and software. The company has managed to apply its wide range of competence to manufacture software and hardware that are compatible to maximize the performance of its products. The company also has resources that are necessary for the production of both software and hardware.

Apple Inc is also involved in the production of various computers. These include iPhones, Pad, Macintosh, and Apple TV, among others (Baxter 2010). This has helped the company to make maximum use of its available resources. For instance, the company is able to distribute its resources in various businesses hence saving on costs.

Each of the company’s business is focused on a number of product types. For instance, notebooks and desktops are two kinds of products under Macintosh. Through such a strategy, the company minimizes costs because various product lines can share resources. The products may also supplement each other. This strategy has significantly helped the company in maximizing returns.

In the contemporary world, where the level of competition is extremely high, the need for a high competitive advantage has increased. Organizations with a high level of competitive advantage are mostly the top-performing in their respective industries.

Apple success can, to some extent, be attributed to its competitive advantage. For instance, the company has managed to retain a high level of performance while other companies face hard times. Apple has remained unstoppable while its competitors face difficult times.

Since its development, Apple has managed to differentiate its products. This is unlike its competitors, who are now struggling to differentiate their products. The company has managed to develop both software and hardware. This combination has improved the quality of their products because they can manage to develop the software which is most compatible with its hardware.

The company is led by the principle that an organization that is serious about coming up with effective software must also be serious about developing effective hardware (Bajarin 2009). This is because in case one of these is not effective, then the resultant performance will be poor.

Therefore, in order to satisfy the needs of their customers, Apple Inc has managed to manufacture both the software and the hardware. This strategy has significantly enabled Apple Inc to maximize the value of its software. This strategy has also helped the company to win a significant proportion of the market share.

For instance, the company has managed to make high-performing software known as iLife (Bajarin 2009). This software is the best of the software used in creating music, DVDs, and movies, among other functions.

In other words, Apple Inc has managed to handle successfully the production of both software and hardware. Many companies deal with either software or hardware. This combination is demanding, and therefore most of these companies are forced to specialize in either production of software or hardware.

This has undermined the value of their products since they have to rely on products from other organizations for compatibility. For instance, a company specializing in the production of hardware will rely on software from another organization. Therefore, it is a great opportunity for Apple to handle the production of both.

Another Apple’s competitive advantage lies in its retail strategy. The company has come up with a strategy of coming up with its own retail stores. However, their idea to come up with their own retail stores was received with a lot of pessimism since many companies had tried and failed in this strategy before.

Contrary to this conception, Apple did very well after launching its own retail stores. The main reason why Apple retail stores were successful was that the company managed to identify the factors which contributed to the failure of many companies that attempted to open their own retail stores.

The main reason why these companies failed was because of improper identification of the best location or even lack of priority. Apple managed to make perfect decisions in both cases. This has helped the company reduce its operational costs, a thing that has helped in increasing its profitability.

Apple has emphasized the need for good services for its customers. It has been extremely careful about how people buy its products. Apple authorized small shops where it ensured that they provided all Apple products and accessories. In addition, these outlets provide repair and support for the customers.

By recognizing the need for quality service for its customers, Apple Inc has managed to maintain quality service for its customers throughout its market network. Close interaction with its retail shops has also enabled the company to build close relationships with its customers, a priority that most organizations in the industry have not managed to access. Previous research has indicated that most of the company’s customers prefer buying from the company’s stores (Bajarin 2009). This can be attributed to the quality services offered by these stores.

Through these arrangements, Apple Inc has managed to maintain an effective support strategy. By provision of repair services and support to the customers, it generates even more sales. For instance, the customers can shop for other products in the store as they wait for their repair to be completed.

This interaction has also enabled the company to have direct conversations with its customer as well as their potential customers. This provides good information to the company for future decisions. For instance, the products may be modified depending on the needs of the customers.

The VRINE model gives an analysis of Valuable, rare, inimitable, or non-substitutable resources that an organization has. The ability of an organization to access such kinds of resources or products contributes to developing its competitive advantage.

Apple has managed to differentiate its products through innovations. By maintaining continuous innovations in its products, Apple has managed to offer unique products in the market. This has helped the company in attracting and retaining a large number of customers.

Through research and development, Apple has managed to acquire patents. This protects the organization’s contributions from imitation. Therefore, exploitation of such resources is restricted and therefore offers a great opportunity for the company.

However, the industry has been faced with a very high level of competition, a factor that has forced the company to improve its products to retain its customers. Apple has also managed to provide both software and hardware. This provides a good opportunity for the organization because it can be able to develop the best compatible software for their hardware.

Apple has a very successful value chain which has been characterized by a high level of achievement. Apple Inc distributes its market all over the world. Therefore, the company distributes its products to people from diverse cultural, geographical, administrative, and economic backgrounds.

This can be viewed in terms of cultural, administrative, geographic, and economic distance framework (CAGE distance framework). CAGE distance framework helps in identifying and assessing the impact of distance on various industries (Ghemawat 2001).

For instance, the European economy is different from the American economy. The economic condition can significantly affect the performance of a product in respective markets. For instance, the economic downturn in the Euro region in 2005 led to unemployment and other economic uncertainties, which led to cutting down on spending on electronics. This situation posed a major problem to Apple since the company’s level of sales fell significantly.

The BCG matrix has been used by several organizations in their effort to realize their goals. The chart is mostly used to assist large organizations like Apple Inc in making critical decisions on how to allocate their financial resources accordingly. The BCG matrix is very helpful to Apple Inc because it helps the organization in allocating resources in the best way. As already noted, Apple is involved in a number of businesses. For instance, it produces both software and hardware, which is not the case with many organizations.

Through the BCG matrix, an organization categorizes its business into units. These include stars, cash cows, question marks, and dogs. On categorizing their business units, the business would then move its finance from cash cows to stars and question marks that have higher growth rates. For instance, Apple’s new products, like iPad2, have a high level of demand. Therefore, more money should be allocated to its production.

From the discussion above, it is clear that Apple Inc has recorded a commendable performance in the computer industry. The company has managed to provide quality services to its customers to a level that the majority of organizations have not managed to achieve. The company has also managed to maintain continuous innovation. This has helped it to differentiate its products.

However, the high level of competition in the industry has subjected the company to a big risk. The cost of production has also increased which has posed a threat to its financial stability. Therefore, there is a need for the company to consider coming up with necessary measures to eliminate these threats.

To start with, there is a need for the company to consider production costs. This can be achieved by considering the application of the most efficient methods of production, which minimizes their costs. For instance, the company may consider relocating some of its production functions to regions where it can access cheap labor.

It is also advisable for the company to consider formulating an effective knowledge management strategy. Knowledge management will help the company in improving the performance of its employees. When employees’ productivity is high, the company will be able to reduce its average cost per unit of production.

This strategy will help in reducing the total production costs effectively. Knowledge management will also help in maintaining continuous innovation hence attracting more customers. It is also advisable for the company to consider intensifying its research activities. Research is the major key to innovation.

Another way through which the company can overcome this problem is by increasing the number of its retail stores to allow its customers to access their products easily. This will also help in advertising the company’s products. By so doing, Apple Inc will manage to expand its market share despite the high level of competition. All these strategies will help Apple Inc in overcoming threats posed by increasing levels of competition and increasing costs.

Bajarin, B. 2009. Apple’s Competitive Advantage . Web.

Baxter, K. 2010. Apple’s Mobile Future: Corporate and Business Strategy . Web.

Brainmass. 2004. Apple Computer Inc . Web.

Ghemawat, P. 2001. Distance Still Matters: The Hard reality of Global Expansion . Web.

Malhotra, H. 2007. Apple’s Success Is a Lesson in Corporate Strategy . Epoch times Washington, D. C. staff. Special Edition-August 2007.

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Bibliography

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Rebuilding Trust: Apple Crisis Management Case Study

Crisis management is an essential skill for any business, as even the most successful companies can find themselves in challenging situations that threaten their reputation and bottom line. 

One such case that garnered significant attention and scrutiny is the Apple crisis. 

Apple, the tech giant known for its innovation and loyal customer base, faced a crisis that put its brand and reputation at risk. 

In this blog post, we will delve into the Apple crisis management case study, exploring the challenges faced by the company, the strategies implemented to navigate the crisis, and the lessons learned from their experience. 

By examining Apple’s crisis management approach, we can gain valuable insights into the importance of proactive crisis management and its impact on businesses in today’s hyper-connected world.

Let’s dive in and learn more 

Overview of Apple’s history and brand image

Apple, founded in 1976 by Steve Jobs, Steve Wozniak, and Ronald Wayne, has emerged as one of the most influential and valuable companies in the world. The company’s journey began with the creation of the Apple I, a personal computer that laid the foundation for their future success.

Over the years, Apple revolutionized various industries, introducing groundbreaking products such as the Macintosh, iPod, iPhone, iPad, and Apple Watch.

One of the key factors contributing to Apple’s success is its unwavering commitment to innovation. The company’s ability to anticipate and meet consumer needs with cutting-edge technology has consistently set it apart from its competitors. Apple’s products are renowned for their sleek designs, user-friendly interfaces, and seamless integration across its ecosystem.

Beyond its products, Apple has cultivated a distinctive brand image that resonates with consumers worldwide. The company’s brand is synonymous with excellence, creativity, and a forward-thinking mindset. Apple’s marketing campaigns, such as the famous “Think Different” slogan, have fostered a sense of aspiration and uniqueness among its customers.

Furthermore, Apple has successfully built a loyal and passionate community around its products. The Apple ecosystem encourages users to remain within the brand’s ecosystem, promoting customer retention and brand loyalty. This devotion is evident in the enthusiastic anticipation and high demand for new Apple product launches.

Explanation of the crisis situation faced by Apple

Apple, a company known for its strong brand image and customer loyalty, faced a significant crisis that posed a considerable challenge to its reputation. The crisis situation arose when reports and allegations surfaced regarding unethical labor practices in Apple’s supply chain.

These reports highlighted issues such as poor working conditions, excessive overtime, child labor, and inadequate safety measures in some of the factories producing Apple products.

The crisis was exacerbated by extensive media coverage and the viral spread of information through social media platforms. News outlets, consumer advocacy groups, and concerned individuals amplified the allegations, putting pressure on Apple to address the situation swiftly and transparently.

The crisis not only raised ethical concerns but also posed a threat to Apple’s brand image. The company’s reputation for innovation, quality, and customer satisfaction was at risk of being tarnished by association with these labor controversies.

Apple was faced with the challenge of not only addressing the immediate issues within its supply chain but also effectively managing the perception of its commitment to social responsibility and ethical business practices.

Factors that led to the crisis

The crisis faced by Apple regarding unethical labor practices in its supply chain was influenced by several factors that contributed to the emergence and escalation of the issue.

• Globalized Supply Chain: Apple’s success as a global technology leader relies on a vast and complex supply chain spread across various countries. The company sources components and assembles its products through a network of suppliers and subcontractors worldwide. The extensive reach of this supply chain increases the difficulty of monitoring and ensuring ethical practices at every stage.
• Outsourcing and Cost Pressures: To remain competitive, companies like Apple often outsource production to regions with lower labor costs. This outsourcing, while driving efficiency and cost savings, can sometimes lead to compromised labor standards. Suppliers under cost pressures may resort to exploitative practices such as excessive working hours, low wages, and poor working conditions to meet demand and maintain profitability.
• Lack of Supply Chain Transparency: Managing a complex supply chain poses challenges in terms of visibility and transparency. Apple, like many other companies, faced difficulties in monitoring and enforcing labor standards across its entire supply chain. The lack of transparency made it challenging to identify and address ethical issues promptly, allowing problems to persist and potentially escalate.
• Limited Supplier Oversight: Despite Apple’s efforts to implement supplier codes of conduct and auditing processes, the sheer number of suppliers and subcontractors involved made it challenging to maintain stringent oversight. This resulted in instances where unethical labor practices went undetected or were inadequately addressed.
• Social Media and Activism: The rise of social media platforms and increased activism empowered consumers, workers, and advocacy groups to expose and publicize the labor issues within Apple’s supply chain. The widespread dissemination of information and the ability for individuals to amplify their concerns quickly led to significant reputational risks for the company.

Impact of the crisis on Apple’s brand and reputation

The following are key impacts of the crisis on Apple’s brand and reputation:

• Brand Perception : The crisis undermined Apple’s carefully cultivated brand image. The allegations of unethical labor practices tarnished the perception of Apple as a company that prioritizes the well-being of its workers and upholds high ethical standards. The negative media coverage and public scrutiny eroded trust and raised doubts about the authenticity of Apple’s commitment to responsible business practices.
• Consumer Trust: Apple’s loyal customer base, which had been drawn to the company for its innovative products and perceived values, was confronted with allegations of worker exploitation. This eroded the trust and loyalty that customers had placed in Apple. Concerned consumers started questioning the ethics behind their purchasing decisions and may have become hesitant to support the brand.
• Investor Confidence: The crisis had implications for investor confidence in Apple. The negative publicity and potential ethical implications affected the perception of Apple’s risk management practices and corporate governance. Investors may have raised concerns about the company’s ability to effectively manage supply chain risks and protect its brand value, leading to potential impacts on the company’s stock price and shareholder sentiment.
• Reputational Damage: The crisis resulted in significant reputational damage for Apple. The labor controversies received widespread media attention, leading to negative headlines and public discourse about the company’s ethical standards. This damage extended beyond Apple’s core customer base, reaching a broader audience and potentially influencing perceptions of the brand among potential customers and stakeholders.
• Competitive Disadvantage: The crisis also created a potential competitive disadvantage for Apple. Competitors in the technology industry could capitalize on the negative publicity and position themselves as more socially responsible alternatives. Apple’s reputation for innovation and quality alone might not be sufficient to counterbalance the ethical concerns raised by the crisis.

Apple’s Crisis Management Strategy 

Following are key aspects of Apple crisis management strategy:

Immediate response to the crisis

When faced with the crisis of unethical labor practices in its supply chain, Apple swiftly initiated an immediate response to address the situation. The company recognized the gravity of the allegations and understood the importance of proactive crisis management.

The following are key aspects of Apple’s immediate response strategy:

• Acknowledgment and Investigation: Apple promptly acknowledged the allegations and expressed its commitment to investigating the issues thoroughly. The company recognized the need for transparency and took responsibility for addressing the labor concerns within its supply chain.
• Supplier Audits: Apple conducted comprehensive audits of its suppliers to assess the working conditions, labor practices, and adherence to ethical standards. These audits aimed to identify non-compliant suppliers and gather detailed information to formulate appropriate corrective actions.
• Collaboration with Suppliers: Apple worked closely with its suppliers to address the identified issues and enforce compliance with ethical labor standards. The company engaged in open dialogue, sharing its expectations and implementing measures to improve working conditions and protect workers’ rights.
• Supplier Code of Conduct: Apple reinforced its supplier code of conduct, which outlines the expectations and requirements for ethical labor practices. The company communicated the code clearly to all suppliers and emphasized the importance of compliance. Non-compliant suppliers were urged to make necessary improvements or face consequences.

Initial actions taken by Apple to address the crisis

During the initial stages of the crisis, Apple took several immediate actions to address the labor concerns and mitigate the negative impact. These actions demonstrated the company’s commitment to resolving the issues and improving working conditions within its supply chain.

The following are some of the key initial actions taken by Apple:

• Supplier Engagement and Remediation: Apple actively engaged with its suppliers to address the identified labor issues. The company worked collaboratively with suppliers to develop and implement remediation plans that focused on improving working conditions, ensuring fair wages, and eliminating unethical labor practices. This approach emphasized corrective actions rather than simply severing ties with non-compliant suppliers.
• Worker Empowerment Programs: Apple recognized the importance of empowering workers and ensuring their well-being. The company implemented programs to educate workers about their rights, provide channels for reporting grievances, and establish mechanisms for feedback and improvement. These initiatives aimed to empower workers and create an environment where their voices were heard.
• Enhanced Supply Chain Transparency: Apple took steps to improve supply chain transparency, making information about its suppliers more readily available. The company published annual reports that detailed its supplier responsibility initiatives, audits, and progress made in addressing labor concerns. This transparency aimed to build trust among stakeholders and hold Apple accountable for its actions.
• Collaboration with Industry Peers: Apple actively collaborated with other industry leaders and stakeholders to address the systemic challenges within the technology supply chain. By partnering with organizations and sharing best practices, Apple sought to drive industry-wide improvements in labor practices and create a more sustainable and ethical supply chain.

Crisis containment and damage control

In addition to the immediate response, Apple implemented crisis containment and damage control measures to limit the negative repercussions of the labor crisis. The company recognized the importance of effectively managing the situation to protect its brand and reputation.

The following are key actions taken by Apple for crisis containment and damage control:

• Clear Communication: Apple developed a comprehensive communication strategy to address the crisis. The company proactively communicated with stakeholders, including customers, employees, investors, and the public, to provide updates on the progress made in resolving the labor issues. Transparent and timely communication aimed to rebuild trust and maintain transparency throughout the crisis.
• Public Statements and Apologies: Apple’s top executives issued public statements acknowledging the gravity of the situation and expressing apologies for any harm caused. The company took responsibility for the issues within its supply chain and emphasized its commitment to remediation and preventing similar incidents in the future. Public apologies were crucial in demonstrating accountability and a willingness to learn from the crisis.
• Continuous Improvement and Reporting: Apple emphasized continuous improvement by regularly reporting on its progress in addressing the labor crisis. The company shared annual reports, sustainability updates, and supplier responsibility progress reports to showcase the strides made in improving working conditions and upholding ethical practices. Transparent reporting aimed to rebuild trust and demonstrate Apple’s ongoing commitment to accountability.

05 lessons learned from Apple Crisis Management Case Study

These lessons learned from Apple crisis management case study can serve as valuable takeaways for other organizations facing similar challenges. 

Let’s discuss each of these:

Proactive auditing and monitoring

Apple learned the importance of proactive auditing and monitoring of its supply chain to identify and address potential issues. Regular audits and inspections help ensure compliance with ethical standards and allow for early intervention and remediation.

Transparent communication

The crisis highlighted the significance of transparent communication with stakeholders. Apple realized that timely and honest communication about the crisis, its causes, and the steps taken to address it was essential for rebuilding trust and maintaining transparency.

Supplier collaboration and support

Apple recognized the need for collaboration and support with its suppliers. The company learned that working closely with suppliers, providing resources, guidance, and training, helps improve ethical practices and strengthens the overall supply chain.

Long-term commitment

Apple understood the importance of a long-term commitment to addressing the crisis and preventing future incidents. The company recognized that sustainable change requires ongoing efforts, continuous improvement, and a steadfast commitment to ethical practices and responsible business conduct.

External validation and partnerships

The crisis highlighted the value of external validation and partnerships. Apple sought certifications and accreditations from recognized third-party organizations to provide independent verification of its efforts. Collaborating with industry peers, NGOs, and advocacy groups allowed Apple to gain insights, share best practices, and drive collective change.

Final Words 

Apple crisis management case study provides valuable insights into how a company can navigate and recover from a crisis while minimizing the negative impact on its brand and reputation. The labor crisis presented Apple with significant challenges, but the company responded with a comprehensive and strategic approach.

Ultimately, Apple crisis management case study highlights the significance of a holistic approach that goes beyond immediate crisis response. By taking responsibility, implementing meaningful actions, and fostering a culture of responsible business conduct, a company can rebuild trust, enhance its reputation, and position itself as a leader in ethical practices and sustainability

About The Author

Tahir Abbas

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Table of Contents

Apple target audience , marketing strategy of apple, 5 key takeaways from apple marketing strategy, a case study on apple marketing strategy.

Breaking through with several inventions in the world of technology, Apple Inc. has been carving infinite milestones ever since its inception. Even though its innovations speak for themselves, this highly-valued giant corporation has invested heavily in its marketing team to soar high up as a tech maestro. Apple Inc. realized the role of brand marketing in the success of a venture from the start as a crucial way to connect with its target audience. This brand's marketing is so vigorously carried out and well-thought that it is often an inspiration and a place of research for marketing professionals. Here we bring you a well-curated case study on Apple's marketing strategy, the key takeaways to learn from this venture, and how to incorporate the same in your business and marketing strategies. 

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To understand its key strategies for marketing Apple products, let's first understand what Apple's target audience is like. Apple's target audience consists of middle-class and upper-class users who can pay higher for products that provide them with an incredible user experience. This means that these users have a higher disposable income and are willing to pay more for as high-priced products as Apple's. 

Let's take a look at Apple's target audience with this comprehensive analysis sourced from Business Research Methodology's report on Apple Segmentation :

Besides this primary classification, Apple also explicitly targets professionals working in specialized software like music, video, photography and all kinds of design careers. These working professionals prefer Adobe’s Final Cut, Photoshop and related editing software which work well with Macbooks and IPads than other operating systems. 

Even better, business professionals prefer Apple products such as iPods and Macbooks for their day-to-day work. Products like iPads and Macbooks are lighter and portable, so they are often selected by students (upper-class), educational institutions and teaching. 

Now coming to the marketing strategy of Apple, it is a combination of well-designed products with the right user experience, promotional campaigns, distribution, and pricing. Let’s take a look at all these features of Apple marketing strategy in detail:

Focus on Finer User Experience

Apple’s branding strategy is based on its stylish, more straightforward and lush products that focus on providing a user interface that is very simple to use and learn. They are lighter, easy to carry as well as durable. This minimal look and user experience makes it a perfect sell to its target audience, which comes from the middle to upper class.

Suave Yet Simple Advertising

Storytelling is such an essential part of every Apple ad as well as a marketing campaign. Often these ads focus on minimal design as well as high-quality images. They are either blended with music or a simple story. Apple consciously ensures that its advertising and marketing don’t use too much jargon or filler language in its ads. Instead, it shines a light on the product to let it speak for itself without showing what the price is like or using complicated words for its features.

Targeting the Right Markets

Apple is excellent at tapping into its target audiences like a genuine tech witch who knows their aspirations, preferences and pain points! Its market research is always on-point and crystal clear in its products, curation, and features. 

Here are the major critical takeaways from Apple Marketing Strategy:

• Tapping into your target markets and audience is the key to curating and selling user experiences that value the preferences of its people. 
• With simplicity and finesse in design, the right products with minimal designs and features can create a perfect impact for your brand.
• Incorporating emotion in your advertising and marketing can also help you connect with your audience better. 
• Don’t exaggerate the copy and conceptualizing of your advertising and marketing campaigns and prefer the “less is more” approach. Create shorter yet emotional and empathetic ads to captivate your target audience.
• When you create an international brand value through quality and minimal, sophisticated design, you don’t need to compete in terms of price. Instead, your price will set you apart for your user experience and design features.

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Dr John Sullivan Talent Management Thought Leadership

Talent management lessons from apple: a case study of the world’s most valuable firm (part 1 of 4).

September 12, 2011

This past August Apple became the most valuable corporation in the world based on market capitalization, surpassing every firm in the technology industry and every other industry! As a consumer products company, its prolonged growth spurt is even more amazing because it has continued through economic times when consumers are reluctant to spend what little they have. Considering that Apple was near bankruptcy in 1997, its story is both extraordinary and noteworthy.

The extraordinary valuation is not a result of 30+ years of stellar performance. Apple has failed at many things. Its success isn’t the result of access to special equipment, manufacturing capability, or a great location, but rather superior leadership, access to great talent, and unusual talent management approaches.

Almost everyone in business is aware of Apple’s amazing product success and the extraordinary leadership of Steve Jobs. Some authors have described the firm’s approach to HR, but few have analyzed the firm close enough to identify  why the approaches work. Visits to the headquarters and interviews with HR leaders convinced me that there are lessons to be learned from this company. After two decades of researching and analyzing Apple’s approach to talent management, I have compiled a list of the key differentiators.

Apple Talent Management Approaches to Emulate

This three-part case study covers the many talent management factors that contributed to Apple’s extraordinary success in workforce productivity and innovation. It does not focus on the many important things that Steve Jobs did at Apple, because such things are not easily copied by others. It also focuses primarily on the approaches used within Apple’s corporate facilities versus those of Apple’s retail operations.

Agility Allows for Innovation into Completely New Areas

Many firms develop the capability to dominate their industry. Procter & Gamble, Intel, and Toyota are excellent examples. Apple is in a different league, however, because it has demonstrated the ability to shift into and dominate completely new industries every few years. For most of its history, Apple was a computer company (and its name used to be Apple Computer), but in the last decade Apple tackled the music industry with the iPod device and iTunes distribution channel. Next Apple conquered and dominated the smartphone industry with the iPhone and “App Store.” Most recently Apple challenged the PC as we know it and is in the process of disrupting the publishing industry. This ability to successfully shift from one industry to another in a few short years is known as agility. In my book, even wildly successful firms like Google, Facebook, Toyota, or Procter & Gamble can’t come close to matching Apple’s agility track record.

A great deal of Apple’s agility comes from the direction and vision of its senior leadership and its corporate culture, which reinforces the need to get ready for “the next big thing.” While Apple looks for agility in talent, the real key to Apple’s agility occurs post onboarding. At Apple, there is a cultural expectation that after succeeding in one task, you will immediately move on to something completely different. You know that you will have to retool and learn quickly. The expectation of radical change eliminates resistance and sends a message that employees can’t rest on their laurels. That means that they must mentally prepare for (and even look forward to) the next extraordinary challenge, even though you will get almost no “career path” help in determining which is the next best challenge for you. Apple employees work in numerous disconnected team silos, competing against one another with little or no foresight into the purpose or intended use date of their work.

The rapidly shifting work load means than an employee bored with their work won’t be for long because the work and the focus will change, a major attraction factor that brings in recruits desiring the challenge of radical change. Looking at the big picture, Apple’s ability to move into and dominate completely unrelated industries is only possible because of its extraordinary talent, the way that it manages it, and its approach to building an image that attracts the new skills needed to successfully move into completely new product areas.

A “Lean” Talent Management Approach Contributes to Extraordinary Productivity

Most firms strive to have a productive workforce. One of the best ways to measure workforce productivity is revenue per employee. Apple produces what can only be considered extraordinary revenue per employee; $2 million. A second measure of workforce productivity is profit per employee: nearly $478,000 for Apple (unbelievable considering it has a retail workforce).

If you are familiar with the concept of lean management, then you’ll understand the prime drivers for Apple’s extraordinary employee productivity. For years, the leadership of Apple has followed the philosophy that having less is more, meaning that by purposely understaffing and operating with reduced funding, you can make the team more productive and innovative.

Innovation at most firms is expensive because you must pay for a lot of trial and error. The lean approach, however, can improve innovation because with everything being tried, there simply isn’t enough time or money for major misses and re-do’s. “Unrealistic deadlines” at Apple mean that you have to get project problems solved early on, because there isn’t time to redo things over and over. Being lean forces the team to be more cohesive. Even providing a lean schedule forces everyone to be productive because they know there is no room for slippage. At Apple, the lean approach means that even with its huge cash resources, every employee must adopt the mentality of leanness. If you understand the lean concept and its advantages, you shouldn’t be surprised that numerous innovations have been developed in “garages,” the ultimate lean environment.

Build and Reinforce a Performance Culture

Any business analysis of Apple will reveal its laser focus on producing industry-leading results. While some feel the performance emphasis comes solely from Steve Jobs, the “performance culture” is continually reinforced by operational processes and practices. For example, having stock as a primary motivator forces employees to focus on the performance of the company and its stock. The rewards and recognition programs at Apple don’t include a component for effort or trying — only final results. Rather than celebrating numerous product milestones, only the final product unveiling is worthy of a major celebration.

A performance culture requires significant differentiation based on performance, and it’s clear that in this culture, the top performers and those who are working on mission-critical products are treated significantly differently. In fact, current and former employees frequently complained about the special treatment given to those designated as the “top 100 most important employees.”

Treating top performers differently may cause some employees to be disgruntled, but treating all employees exactly the same will frustrate your high-impact top performers and cause them to leave. Functions receive different funding also, based on their potential impact. Overhead functions that don’t directly produce product (i.e. HR) are often underfunded compared to product producing functions like engineering and product design.

Although there is certainly politics at Apple (where marketing seems to rule), having a degree from a prestigious school or past success on other products won’t get you far in the highly competitive culture at Apple. Jobs has no degree at all. The internal competition is fierce (even though they don’t know what other teams are doing) to develop or contribute to the most-talked about feature for the next WOW product.

Rather Than a Work/Life Balance, Emphasize the Work

Numerous HR functions proudly and prominently push work/life balance. Like them, Apple is proud of its long-established culture. You won’t find the term “balance” anywhere on the career site; instead, Apple makes it clear it is looking for extremely hard-working and committed individuals. On the website, for example, it proudly states: “ This isn’t your cushy corporate nine-to-fiver .” It reinforces the “hard work” message several times, including “ Making it all happen can be hard work. And you could probably find an easier job someplace else. But that’s not the point, is it ?

And: “ We also have a shared obsession with getting every last detail right. So leave your neckties, bring your ideas .”

If you don’t care about getting every precise detail perfect, great work, and a lot of it, Apple makes it crystal clear that this is not the place for you.

Next week: Part 2 — more talent management approaches to copy and learn from.

Talent Management Lessons From Apple … A Case Study of the World’s Most Valuable Firm (Part 2 of 4)

In Part 2 of this case study on Apple’s talent management practices, I look at its approach to innovation, compensation, and benefits, careerpathing, and online recruitment (its career site). Some approaches discussed are unique to sub-factions within Apple, as would be expected in any organization of significant size. It’s also quite rare for organizations that design, manufacture, and sell through direct retail to have consistent approaches across all units.

Talent Management Lessons To Learn and Copy (continued)

You should not be surprised to learn that the firm that made the term “think different” a brand uses talent management approaches that are well outside the norm. In addition to  the lessons presented in Part 1 , some approaches other firms can learn from Apple include:

Career paths reduce self-reliance and cross-pollination  — in most organizations, HR helps to speed up employee career progression. The underlying premise is that retention rates will increase if career progression is made easy. The Apple approach is quite different; it wants employees to take full responsibility for their career movement. The concept of having employees “own their career” began years ago when Kevin Sullivan was the VP of HR. Apple doesn’t fully support career path help because it doesn’t want its employees to develop a “sense of entitlement” and think that they have a right to continuous promotion.

Apple believes career paths weaken employee self-reliance and indirectly decrease cross-departmental collaboration and learning. Absent a career path, employees actively seek out information about jobs in other functions and business units. In a company where creativity and innovation are king, you don’t want anything reducing your employee’s curiosity and the cross-pollination between diverse functions and units. Automatically moving employees up to the next functional job may also severely narrow the range of internal movement within the organization, which could reduce the level of diverse thinking in some groups.

Create and manage a culture of innovation  — most firms have a culture with a singular focus on one attribute like performance, quality, customer service, or cost-containment. Apple is unique in that it has two dominant cultural attributes that exist side-by-side. The first (discussed in part one) is “performance,” with the second being “innovation”; the latter may actually be the strongest of the two. The dual emphasis works at Apple because the firm operates in the consumer technology field, where there is a universal expectation for “disruptive” performance.

Producing $2 million-plus in revenue per employee certainly establishes Apple as a performer, but it is its industry-dominating product innovation that differentiates it from competitors like HP, Sony, Microsoft, and IBM. Three factors drive the innovation attribute, including the expectation of continuous innovation, extreme secrecy within the product development process, and continuous brainstorming/challenge meetings (even at play just days before a product launch).

“I expect a pony”

Apple’s culture of innovation is unique because the goal is to produce a “pony, not a real horse but instead something so desirable that everyone wants it and considers it ‘gorgeous.’” Simple evolution doesn’t cut it — only extraordinary industry-leading innovation that results in WOW products does. To accomplish that, Apple doesn’t do what most consumers assume it does. Instead of developing completely new industry technologies, Apple takes existing technologies and then bundles numerous small developments on top to produce what appears to the public as giant step forward. It takes a powerful culture and group of managers to delay taking great work public faster, but Apple knows that numerous small releases don’t produce the same media and consumer buzz.

The expectation of innovation permeates the culture

The expectation of innovation is driven by Apple’s history of innovation, its leaders (who forbid the use of “that’s not possible”), and the peer pressure among employees to be among the contributors to the final product that the customer sees. In order to generate this expectation of innovation, it doesn’t rely on posters or motivational slogans (although they have those too …  around here, changing the world just comes with the job description ). Instead, every communication, process, product launch event, and even advertising slogans ( Think Different, Imagine the Possibilities, Here’s to the crazy ones. The misfits. The rebels. Etc. ) make it crystal-clear that innovation is at the heart of Apple’s success. Innovation has driven Apple’s past and current successes, and it will continue to drive future success. After walking in the door of the corporate offices in Cupertino, California, you can literally “feel” the expectation to innovate.

Secrecy drives internal competition

The second critical driver of innovation is the product development process. This innovation process is unique in that it doesn’t rely on a formal “ideation” type model; instead, it has been described as an “iteration” process energized by peer competition and Apple’s famous siloed/secret approach to teams. Apple does many things using small development teams, as many firms do, but doesn’t rely on a single team to design each product element. Multiple teams may be assigned to the same area (or they may accidentally wander into the same area). The approach has been called 10 to 3 to 1 because 10 teams may work on a product area independently. When work is ready for review a formal peer review, it will whittle 10 mockups to three and eventually down to one. It is an approach that is unique to Apple. Outsiders may consider it expensive and slow, but they can’t argue it isn’t effective.

Apple is well known for its obsession with secrecy in order to heighten the impact during a product release. Secrecy is also the most unique element in its innovation process. In order to maintain secrecy, development and design teams are intentionally siloed. As a result of these communication barriers, team leaders may not be initially aware of how many teams they’re competing against and what those other teams are working on. The level of open collaboration that you might find at other firms like Google is not possible under this process, but neither is early-stage groupthink. Once possible feature solutions move forward to peer review, the organization benefits from broader scope best-practice sharing and collaboration. While it may seem counterintuitive, Apple has turned “team silos” that would be a negative factor at most firms into a positive force.

Paired design meetings force free-thinking to continue until the end of the design

Another element of the design and innovation process is the holding of weekly “paired design meetings.” Every design team is expected to hold two meetings each week. The first is a traditional production meeting where small refinements are discussed and made. The second is a “go crazy” meeting, in which everyone brainstorms and uses free-thinking to scope out parameters. Most organizations stop these brainstorming meetings once the design parameters are clear, but Apple continues them long into the development cycle to guarantee that completely new ideas will constantly raise the innovation bar.

The talent management lessons to learn in the area of innovation include the concept that intense competition may produce innovation faster than any formal ideation process. In addition, peer vetting of ideas, delaying collaboration until toward the end of the development process, and requiring the continuous use of brainstorming processes may result in bolder innovations and higher levels of risk-taking.

Tying economic rewards to overall company success can reduce selfish behavior  – You won’t find anyone who will publicly argue that Apple pays well with regard to base compensation. Economic rewards at Apple are significant, but largely tied to the company’s valuation. The primary monetary motivator at Apple is “the opportunity for wealth creation” as a result of stock ownership. Most employees at Apple get periodic stock grants to reward their contribution. By putting the focus on the stock, they send every employee a clear message that individual accomplishments are important only if they directly contribute to the overall success of the company. This approach, coupled with the firm’s famous “product focus,” keeps everyone focused on product success rather than individual results and individual rewards. Individual rewards are provided based on performance and consist of stock grants and cash bonuses up to 30% of base salary. Apple’s retail employees also have stock opportunities. They are paid on an hourly basis and do not receive a sales commission.

Benefits and even pay play a secondary role in recruiting and retention — at Apple, the primary long-term attraction and retention factors are stock growth and exciting work. Because of the importance of these two factors, its message on benefits is clear. If you’re doing the best work of your life and having a major impact on the world, do you really need sushi in the cafeteria? (It has that also.) Although most talent competitors to Apple spend huge amounts of money on benefits, Apple’s offerings are spartan when compared to Google, Facebook, and Microsoft. While Apple’s health plan is well-funded, and it has good food and an on-campus gym, neither the food nor the gym is free. One perk that does excite potential applicants (especially in retail) is the employee discount on Apple products which is given to every employee. These discounts further support and reinforce Apple’s companywide emphasis on the product.

Your corporate jobs website should boldly inspire  — because the primary goal of most corporate career/jobs websites is simply to provide company and job information to potential candidates, most corporate job pages are chock-full full of information. Apple’s website is lean on information but strong on inspiration. As a result, after exploring the site, the potential applicant comes away inspired rather than with a pile of information about the company.

There are two categories of inspirational messages on the site, and each one is bold. The first group of corporate messages makes it clear that Apple is “anti-corporate.” In fact, the first bold headline you see is “ corporate jobs, without the corporate part .” They also highlight what they are proud  not  to have including  endless meetings, being bureaucratic, having executive perks and managers wearing suits . Instead they boldly tell you “ don’t expect business as usual .”

The second category of inspiration on the website concentrates on openness, innovation, and changing the world. Key phrases include “ open minds, collaboration, and of course innovation .” You will also find the phrase “ there’s plenty of open space — and open minds ” (obviously perfect sentence structure isn’t a high priority either). Finally, they promise to “ give you a license to change the world ” and “ be inspired .”

Its focus on inspiration is so strong that for a tech firm, there is a surprising  lack of technology-speak on the page . You will not find blogs, videos, or any mention of Apple’s availability on Twitter or Facebook easily. When it comes to mobile access, the site will render fine on the latest smartphones, but receives a 1.51/5.0 with regard to meeting mobile standards. If you visit the site, you might even find links that don’t work and features that load very slowly. What you will find is inspiration — loads of it.

I’ll leave you with this introductory statement from its career site:

“There’s the typical job. Punch in, push paper, punch out, repeat. Then there’s a career at Apple. Where you’re encouraged to defy routine. To explore the far reaches of the possible. To travel uncharted paths. And to be a part of something far bigger than yourself. Because around here, changing the world just comes with the job description.”

Next week,  Part 3:  Employer branding, recruiting, retention, and other talent management approaches to copy and learn from.

Talent Management Lessons From Apple… A Case Study of the World’s Most Valuable Firm (Part 3 of 4)

Want to impress your CEO? Few CEOs wouldn’t mind having the innovation track record of Apple, so there is probably no quicker way to become an “instant hero” then by learning how Apple’s talent management practices have contributed to its success and applying those practices relevant to your organization. In this installment of the case study, we’ll look at internal branding, employer branding, and recruiting.

Internal Brand Encourages Fighting the Status Quo

Steve Jobs and the management team at Apple have worked tirelessly to build a unique internal brand image at Apple that positions employees (at least mentally) as revolutionaries and rebels. Many years ago the organization influenced this internal brand by challenging employees to think how much more exciting it would be to be a pirate, rather than someone who followed the formal protocol of the regular Navy. It even flew a pirate flag over its corporate headquarters. The tradition of being revolutionaries is upheld even today with many supportive slogans including “Part career, part revolution.”

Apple is well known for using T-shirts, parties, and celebrations to build cohesion and to reinforce the internal brand as a ragtag group of revolutionaries. By getting employees to view their role as attacking the status quo, it helps to spur continuous and disruptive innovation. It has been successful in maintaining that internal brand image despite the fact that the top-down approach and intense secrecy run counter to its hatred of bureaucracy and all things “too corporate.” The external image further supports the internal brand.

You Can Have a Strong External Employer Brand Without an Employer Branding Program

Many among us dream of working at Apple, but unlike Google and Facebook, it’s pretty difficult to find out what it’s actually like to work there. A quick search on the Internet reveals that apart from a few alumni, most who have roamed the halls are pretty tight-lipped about their experience. While that silence is probably largely driven by Apple’s widespread use and vigilantly enforced non-disclosure agreements, even the corporation itself is relatively mum. You won’t find a great deal of employment advertising or find the Apple name on any one of a dozen or more best-company-to-work-for lists covering the technology sector, even though competitors like Google, Microsoft, and Intel are regularly listed.

Despite the silence, most would agree that Apple has a great “employer brand image”; Universum ranks Apple No. 10 among global engineering companies. The lesson to be learned is simple: use management practices that support your desired brand and elaborate brand management work will be unnecessary. Get your potential applicants to admire your firm for who and what the firm does by being the admirable firm.

Your Product Brand Should Serve Double-duty as Your Employer Brand

Instead of spending millions on building an employer brand, Apple lets its product brand do all the talking. Apple works hard on building and maintaining its product brand, which is ranked as  the #1 global brand  according to BrandZ ranking. Although product brand messages are intended primarily for customers, the messaging which emphasizes innovation and thinking differently also hasa major impact on potential applicants and employees. The logic is that if your organization lives up to its product promises, then it is natural to expect that the company’s jobs would also live up to the firm’s brand promise. In their minds, potential applicants make the connection between great products and a great place to work. In addition, because Apple’s products are talked about by everyone, there is a lot of brand association power lauded on those who work at Apple.

This public awareness and admiration can, coupled with a strong employee referral program, make generating a high volume of quality applicants easy. That same attention and curiosity will also enhance a firm’s retention rates because your employees will realize that the public sees them as collectively changing the world. Having employees believe that they are likely doing “the best work of their lives” is a powerful situation that most companies can’t easily mimic.

Being a Most-admired Firm May Be Enough

Apple does receive some notoriety in the press as the world’s  “most admired firm.”  In fact, Apple has been No. 1 for four years running on the list. That is an amazing feat. Apple dominates this list by being ranked first in eight out of the nine possible ranking factors. Those eight categories include factors that impress potential applicants, including people management, quality of management team, innovativeness, and social responsibility. The most admired list is based on the perceptions of business people and executives, something that Apple excels at managing. Having your firm admired garners enormous publicity in addition to increasing employee pride, engagement, and retention. The lesson to be learned by other firms is that if you don’t offer great benefits (which Apple doesn’t) you can get the same or even larger impact if you manage the perceptions of executives at other firms.

We want our people to be on the leading edge, so that everyone wants them… and then we must treat them right so they will stay, no matter what offers come along! – Apple Senior Manager

Aggressively Recruit the Best From Other Firms

The pirate-raiding mentality at Apple certainly carries over into recruiting. Apple has a long history of recruiting away top talent from other firms. In fact, the development of its iPod probably wouldn’t have occurred if it wasn’t for importing external talent from firms that didn’t appreciate the value of this new technology. Steve Jobs himself has been known to get directly involved in recruiting top talent. Apple has a top-grading type philosophy in that it targets top performers. Jay Elliot, its former VP of HR, cites one of Apple’s core principles as: ”Always… hire the best  ’A’ people. As soon as you hire a B, they start bringing in Bs and Cs.”

Apple’s recruiting approach is evolving because it has recently imported a team of recruiting leaders from Electronic Arts, but historically, despite the aggressive philosophy, its recruiting methods were pedestrian. It uses job boards and has an employee referral program that has paid up to $5,000, but its candidate experience is far from perfect. Glassdoor users rate Apple interviews 3.0/5.0 with regard to difficulty. Its college recruiting effort isn’t exceptional, with the exception of using recent college hires to help recruit the new crop. The key lesson for other firms to learn is that you can generate huge volumes of high-quality applicants if your firm is highly admired and if potential employees believe that they will be working on leading-edge products that everyone will be talking about.

In the retail group, there are two notable recruiting practices. The first has been the naming of the “ Genius Bar ,” where technical support is provided. Many applicants and employees in the retail area seem to be willing to put up with the relative drudgery of retail work simply for the opportunity to someday work their way up to becoming certified as a “genius.” The second is the use of employee referral cards that are well-designed and powerful. They reinforce the companywide focus that originated with Steve Jobs on recruiting the best from other firms. Recruiters and employees who witness great customer service at other retail and customer service outlets hand the card to those few individuals who provide impressive service. The front of the referral cards say “You’re amazing. We should talk.”

The back praises the individual and their work with a near perfect narrative … “ Your customer service just now was exceptional. I work for the Apple store and you’re exactly the kind of person we’d like to talk to. If you’re happy where you are, I’d never ask you to leave. But if you’re thinking about a change, give me a call. This could be the start of something great .”

Next week,  Part 4 : Apple’s approach to training and development, management, leadership, and other difficult-to-categorize talent management lessons to learn from.

Talent Management Lessons From Apple… A Case Study of the World’s Most Valuable Firm (Part 4 of 4)

The purpose of this case study was not to say that you should copy everything Apple does, but rather to point out that with relentless execution and focus on key factors even a firm near bankruptcy can fight its way back to the top. In 13 years Apple has transformed itself from an organization of the verge of collapse to the world’s most valuable firm, amassing a phenomenal innovation record in the process. While Apple’s approach wouldn’t work for every firm, there are lessons to be learned that can influence program design regardless of industry, firm size, or location.

In part 4 of this case study (here’s parts  1 ,  2 , and  3 ) on talent management lessons, the attention is on development practices, role of management, and inspirational leadership.

Make your employees “own” their learning, training and development  — because Apple frequently produces new products requiring expertise in completely different industries (i.e. computers, music devices, media sales, and telephony), its employee skill set requirements change faster than at almost any other tech firm. While there is plenty of training available, there is no formal attempt to give every employee a learning plan. Just as with career progression, employee training and learning are primarily “owned” by employees. The firm expects employees to be self-reliant. Its retail salesforce for example receives no training on how to sell, a practice that is certainly unconventional in the retail environment. The lesson is simple: providing target competencies and prescribing training can weaken employee self-reliance, an attribute problematic in a fast-changing environment. Employee ownership of development encourages employees to continuously learn in order to develop the skills that will be required for new opportunities.

Make managers undisputed kings  — Apple is not a democracy. Most direction and major decisions are made by senior management. “Twenty percent time” like that found at Google doesn’t exist. While in some organizations HR is powerful when it comes to people management issues, at Apple, Steve Jobs has a well-earned reputation for deemphasizing the power of HR. Although Apple was the first firm to develop an HR 411 line, I have concluded that most of the talent management innovations at Apple emanate from outside of the HR function. There is a concerted effort to avoid having decisions made by “committees.” Putting the above factors together, it is clear that at Apple, managers are the undisputed kings. The resulting decrease in overhead function interference, coupled with the increased authority and accountability, helps to attract and retain managers that prefer control. Unfortunately, concentrating the authority has resulted in having some managers being accused of micromanagement and abusing team members.

Having a product focus drives focus, cooperation, and integration  – Apple is notably famous in the business press for its “product-focused” approach (versus a functional or regional focus). Everything from strategy to budgets to organizational design and talent management functions are designed around “the product.” One of the primary goals of talent management is to ensure that the workforce is focused on the strategic elements that drive company success. That focus can be distracted with selfish or self-serving behavior that instead shifts the emphasis to the individual, a business function, a particular business unit or even a region. Although deciding to have a product focus is normally a business decision, it turns out that Apple’s strong product focus also has significant positive impacts on talent management.

This laser focus on producing a product makes it easy for everyone to prioritize and focus their efforts. A product focus is so powerful because it’s easy for employees to understand that final products can never be produced without everyone being on the same page. A product focus increases coordination, cooperation, and integration between the different functions and teams because everyone knows that you can’t produce a best-selling product without smooth handoffs and a lack of silos and roadblocks. With a singular focus on producing product, there is simply less confusion about what is important, what should be measured, what should be rewarded, and what precisely is defined as success. A product focus increases the feeling of “we’re all in this together” for a single clear purpose: the product.

Apple purposely offers only a relative handful of products, so employee focus isn’t dispersed among hundreds of products as it is at other firms. By releasing products only when it can have a major market impact, Apple essentially guarantees that every employee can brag that they contributed to an industry-dominating product that everyone is aware of. This focus on product helps to contribute to employees feeling that they are “changing the world.” This focus may also reduce the chance that employees will notice that the day-to-day work environment with its politics and the required secrecy may be less than perfect. And because Apple is no longer a small firm, with nearly 50,000 employees, a unifying and inspiring theme is required to maintain cohesion and a single sense of purpose.

Find a passionate and inspirational leader  — although Steve Jobs is no longer the CEO, no analysis of Apple would be complete without mentioning his importance in the firm’s success and the design of its talent management approach. He influenced nearly every aspect of the talent management approach. Not only is he one of the highest-rated CEOs by the public (he is  ranked  number three on the glassdoor.com list) but as a role model, he has had a huge impact on innovation, productivity, retention, and recruiting. His value is indisputable. The day after he resigned, Apple’s stock value fell by as much as $17.7 billion. It is too early to tell whether the new CEO, Tim Cook, who is markedly less inspirational, will be able to maintain the momentum that Jobs created. He has already shifted some executives and changed the company’s philanthropy approach by instituting a matching gift program for charitable donations.

Other miscellaneous talent management issues  — Apple executives are certainly in high demand at other firms that seek to be equally as innovative (for example, the head of the retail operation recently left to become CEO at JCPenney). Despite this demand, Apple certainly doesn’t have any significant turnover problems. You can, however, find  plenty  of negative comments about Apple on sites like glassdoor.com. Some describe Apple’s approach toward employees as a bit arrogant, and employees are certainly pushed to their limits. If you don’t “bleed six colors,” you simply won’t enjoy your experience at Apple for long. Although originally the firm emphasized employee recognition, it is not easy for those outside the firm to connect recent product successes to a single individual or team.

Apple is a team environment. Although many teams are forced to operate in isolation, that actually helps to build team cohesion. The competition between the different development teams is also intense, but that also helps to further strengthen cohesion. Like most engineering organizations, its decision-making model is certainly focused on data. Apple management likes to control all aspects of its products, but despite that, it is one of the best at using outsourcing to cover areas like manufacturing, which it has determined is not a core corporate competency.

Final Thoughts

Although Apple clearly produces extraordinary results, its approach to talent management is totally different than that of Google and Facebook, which also produce industry-dominating results. As Apple has grown larger, its rigor around sustainable innovation has grown as well, a feat that proves impossible for most organizations including the likes of HP, Microsoft, and Yahoo.

The three “big picture” learnings I hope you walk away from this case study with include:

• Focus on “the work” — it is management’s responsibilty to do whatever is necessary to keep work exciting and compelling.
• Strive for continuous innovation — Apple’s emphasis on being “different” is so strong that it can’t be overlooked by any employee or applicant. It delivers industry-dominating innovation levels because everyone is expected to.
• Deliver on your brand — Apple works hard to make sure that potential applicants, employees, and even competitors admire its products, the firm, and how it operates.

These three factors are not easy to copy, but they are certainly worth emulating. If you can bring them and the results that they produce to your firm, there is no doubt that you will be a hero.

Author’s Note : If this article stimulated your thinking and provided you with actionable tips, please take a minute to follow and/or connect with Dr. Sullivan on  LinkedIn .

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Case Study: The Business Strategy of Apple

Apple Inc is a multinational American company that design and sells computer software, consumer gadgets and personal computers. It was co-founded by Steve Jobs , Steve Wozniak and Ronald Wayne. Apple Inc is well-known for being innovative as they kept on producing new innovations from the first Apple computer Macintosh to the more recent iPhone and iPad series.

Today Apple Inc. is very well known in the world because of their advanced technology in products such as iPods, iPhone, Macbooks, Apple TV and other professional software. All the high tech products provide consumers with a better living standard in many different ways. Moreover, Apple Inc’s dominant position in the global market has changed the trend of consumer usage of electronic appliances such as in virtual communication. People will never need to carry multiple devices where each one only offers a handful of functions. Furthermore, Apple also created a substantial value in highly competitive market and industry which help them to achieve competitive advantages in an industry with stiff competition. In addition, it resolves the other external factors that present difficulty challenges to Apple Inc. Therefore, now Apple Inc is known as a strong company and the market leader in industry. Now, let us discuss about the current expansion strategy that used by Apple that make the company has greater success in marketplace.

The first strategy that use by Apple Inc for their current expansion strategy is creating innovative idea that slightly different from the competitors that already exists in market and industry. In order to make the company more innovative, Steve Jobs focused innovation on competitive pressure and value proposition by stressing his management style on customer center innovation and customer experience. As CEO in Apple, Steve Jobs carefully evaluated competitive pressure and opportunity in market place by continuously pursuit customer experience innovation. He also focused their business and IT strategy on customer center experience. It means that Apple will be more focused on looking outwards, market and business drivers rather than at the products or services that already exist. Steve Jobs focused on this strategy because the customers can help the company to understand what customers need and scarcity of the people so that he can use the feedbacks as inspiration to deeply investigate and then to create more innovative, creative and highly advanced technological product or services that can fulfill the needs of the customers. Therefore, Apple products design is always attractive and elegant compared to those existing competitors. Apple products like iPods and iPhones are good examples that show the innovation of Apple Company by creating digital lifestyle .

The second strategy applied by Apple is differentiation . Apple is using Macintosh as operating software whereas other personal computer’s producers are using Windows. The differentiation in operating software gives Apple a competitive advantage in the personal computer industry. Macbook users are satisfied with Macintosh performance because it is very energy saving where the processor will automatically “close” those programs which are not in use when it is in standby mode. On the other hand, Windows does not have such technology. Thus, Windows’ users might have to charge the laptop more often due to the battery consumption is higher than Macintosh.

In terms of design, Apple came out with an ultra-thin Macbook Air which is extremely thin compared to those existing laptops. To those consumers who prefer lighter and thinner laptops will definitely be attracted to the Macbook Air. Apple does not produce laptops in various colors like Dell or Hewlett Packard to increase the choices for consumers. However, to those consumers who are concerned about technology and high performance, Apple is still the preferable choice.

In terms of applications and software, Appstore provides a platform for customers to download software and applications according to categories. It is easy to search for any application or software by using Appstore. iTunes allow consumers to categorize and download songs easily . By using iTunes, consumers can choose their preferable album cover for their songs. They can also “synchronize” and update the songs in their iPhone with a laptop. Besides that, iTunes also allow consumers to transfer photos from iPhones to PCs.

As for pricing, Apple is using skimming pricing strategy where they set high selling price for their products. However, there are still a lot of loyal customers who prefer to spend more money on Apple products. This is due to the self esteem where consumers feel good by carrying Apple products because it somehow shows their status as being up-to-date and their taste is better than others. Some customers think that Apple products are not cheap but also not high-priced products because the value of Apple products bring to them is never disappointing.

Other than that, Apple is using specialization strategy where they customized customer’s laptop according to their requirements. Customers are required to add in features into the laptop which can serve them better. Beside this, Apple also emphasizes customizability on the part of entertainment that offer computer-build for high performance such as gaming. Gaming plays important roles to help Apple to customize in features and specification to make the products more attractiveness and creativity.

In a nutshell, the key to Apple’s success is down to creating a unique product with the ability for it to be customized to suit each individual’s needs.

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Apple Inc.: Strategic Management Case

Introduction.

Strategic management involves a continuous process that includes setting targets, implementing them, evaluating them, and making changes where necessary. “As performance results or outcomes are realized at any level of the organization, organizational members assess the implications and adjust the strategies as needed” (Lamb, 2000). In today’s constantly changing business environments, management strategies have to be flexible enough to allow a business to adapt to new needs and opportunities. It is supposed to be a continuous effort aimed at achieving a business’ long and short-term objectives (Oxford Business Group, 2008).

According to Selznick (2000), “the strategic management process is up of four elements; situational analysis, strategic formulation, strategy implementation, and strategy evaluation”. When developing a strategic management plan, the elements are implemented in a specific order aimed at achieving ensuring necessary improvements in a business (Jensen, 2000.). “Situational analysis is an important step when a business is formulating its mission statement. It involves scanning and evaluating the organizational context, the external environment, and the organizational environment” (Ansoff, 2003).

Different organizations will use different techniques and tools among them being communication and observation. A company’s internal environment is an important consideration in the process and key factors include employees, management, shareholders, and their interaction (Pommerening, 2007).

Another important element is strategy formulation which involves designing an organization’s objectives and strategies to achieve them. This step is necessary when evaluating an organization’s strengths and weaknesses. The formulation is further divided into different levels such as corporate, operational, and competitive (Drucker, 2000). The strategies are also divided into the short and long term.

The third element is strategy implementation where all the formulated strategies are put into work. “It involves developing steps, methods, and procedures to execute the strategies and it also includes determining which strategies should be implemented first” (Chafee, 2005). The last element is strategy evaluation which involves measuring the strategies’ results and how well they have worked. It includes putting in place metrics and time scales, all of which should be realistic and achievable (Hudson, 2010).

Organization analysis: Case study Apple Inc.

For a business to successfully implement their strategy, there needs to be clearly defined mission and vision statements (Tahir, 2008). The business must also have what they consider as their core competency. “It outlines the overall goals of a company, guides decision-making and gives the company a sense of direction” (Daft and Dorothy, 2009). Vision on the other hand defines what a company intends to achieve in future in terms of its strategic direction (Levinson, 2005).

It offers a long term view of what a business would want to be or the business’ fundamental objective. Core competency in any business refers to a unique factor, which the business considers as being fundamental to the way it operates (Kessler, 2000). Core competencies are supposed to have a positional advantage applicable to many products and should not be easily imitable by competitors (Cleland and Lewis, 2006).

Apple Inc. is among the global organizations that have used strategic planning to maintain good positions in their industries. Its mission statement is:

Apple’s business strategy leverages its ability, through the design and development of its own operating system, hardware, and many software applications and technologies, to bring to its customers around the world compelling new products and solutions with superior ease-of-use, seamless integration, and innovative industrial design (Miller, 2010).

Its vision statement is “Introducing innovative, high quality consumer electronics to the masses through impressive performance and leadership” (Miller, 2010)

The company’s core competences are its marketing mix, technology and their product Lifecycle Management (PLM). Technology and design have allowed the company combine functionality and beauty. Its marketing mix puts together all the P’s (Product, Price, Placement and Promotion) to give its customers an intuitively working product.

Apple’s internal and external analysis

Apple’s strong market presence has been influenced by different factors. Its iPhone market has grown from 21% to 25.3% in the last four years. Bigger gains have been predicted for the business. Apple is considered one of the most successful companies in the consumer electronics industry. The company’s iPod product and the iTunes music store is currently enjoying a market lead and giving the business good revenues.

Swot analysis

Pest analysis, political-legal factors.

Apple has an international presence, making it vulnerable to global legislation and regulations. Since different countries have different legislation concerning consumer electronics and their trade, Apple may be restricted in some regions and denied opportunities in viable markets. Regional trade such as the European Union offers the company enormous potential by making it possible to operate in bigger markets under the same regulations. Political unrest in different regions, such as the ongoing riots in Arabic countries and terrorism, largely impacts Apple’s overall business operations and revenues. “Since Apple largely relies on access to intellectual properties from third parties, it is constantly faced with infringe issues in different countries” (Bach, 2010). Legal suits against it may then impact its reputation and costs it a lot of money. Different environmental regulations in different countries may be a challenge for the business in its attempt to comply to all of them.

Economic factors

Economic environments in different countries largely affects Apple’s revenues and profits. The recent global crisis and reduced profits for Apple was a good example of just how big a factor the global economy is for it. A slow economy growth in recent years has resulted in a slow growth rate for Apple due to decreased consumer spending. In the educational segment, Apple has faced decreased sales, after many governments cut their expenditures in their educational sectors in recent times due to the global crisis. Any products dependent on foreign supplies affect the company’s costs of operations and profit margins. Tariffs and tax rates also differ in different markets, causing fluctuations in the company’s revenues.

Social-cultural factors

Apple’s products are embraced differently in its many markets. Computers and internet usage in developed countries has been much higher than in developing markets. Currently, computers, phones and other consumer electronics are experiencing increased demand in almost all markets. This presents a good opportunity for Apple and has resulted in better revenues for the company. Education is a priority for many nations today, a key factor in Apple’s business.

Technological factors

New problems in the market call for new solutions each day and this demands that Apple keeps pace (Harrison and Edward, 2007). Technology forms the basis of Apple’s business and therefore, the business cannot afford to offer outdated products in the market. As more and more people appreciate technology, Apple is forced to invest more in technological innovations and development. Technology therefore has a major influence on how Apple does business and its results.

Environmental audit

“Apple’s environmental record has been marred with conflict and confrontations by different environmental organizations for promoting non-recyclable hardware components” (Bach, 2010). In 2003, different organizations led by Greenpeace campaigned against Apple’s chemical policies especially in relation to their use of BFRs and PVS in their products. In 2008, the company was listed last among the greenest electronic companies by Climate Counts. Through its continued environmental efforts, Climate Counts ranked Apple first in the same list this year. The Environmental Protection Agency also ranks Apple highly in the list of most environmentally conscious companies.

“Apple’s designs ensure that its products use less material, are free of toxic substances, are as recyclable as possible, and are shipped in smaller packaging” (Bach, 2010). The company follows strict environmental standards from its manufacturing, to transportation, product use and finally recycling. Its designers and engineers pioneered the development of small, thin and light products to minimize amounts of raw materials used. Its engineers also ensure that the raw materials they use have the lowest levels of toxic materials possible and suppliers are put to task to ensure that they only supply raw materials free of such toxins. Packaging and transportation is done in such a way that it minimizes toxic emissions to the environment and products are designed is such a way that they use minimum energy, giving environmental advantages to the final consumer. “Most of Apple’s products today meet and exceed the energy star guidelines for energy efficiency” (Bach, 2010).

Porter’s generic strategies

“If the primary determinant of a firm’s profitability is the attractiveness of the industry in which it operates, an important secondary determinant is its position within that industry” (Thompson and Strickland, 2000, Pg. 11). A business succeeds in a market through its power to act effectively, ability to influence a system and strength to multiply the outcome of its strategy. In his analysis of business strategies, Michael Porter argues that a business’ strength can fall into the cost advantage or the differentiation category (Fuller, 2007). Porter discusses the cost leadership strategy, focus strategy and the differentiation strategy. “The cost leadership strategy calls for being the low cost producer in the industry for a given level of quality” (Nag, 2006). It is not one of Apple’s strategy and instead, the company has chosen to implement the focus and differentiation strategies.

The focus strategy has found a place in Apple Inc. For most of its products, Apple has concentrated on a high class market segment. As a result, it enjoys better customer loyalty than most of its competitors, a factor that discourages them from direct competition with Apple. Through this strategy, Apple has also been able to develop strengths in the markets it has focused on. A major risk in this strategy is imitations, which Apple has been able to curb by using unique technologies that imitators may not have access to.

Even though the focus strategy has been applied in Apple Inc., the company has focused on the differentiation strategy by developing unique products with attributes that keep its customers loyal. The products’ uniqueness adds value to them, making the favourable regardless of their price. As a result, Apple is able to charge a premium price for some of them. This way, the business can easily afford the costs that go into making its products unique. When the company’s cost of production goes up, it is able to easily pass it down to the consumers, who may not be able to enjoy the services anywhere else other than in Apple’s products.

Apple has been able to succeed using a differentiation strategy by implementing several internal strengths. It has established a good reputation for quality for itself and has ensured it stays as the best firm in terms of innovations. The company’s stable financial position allows it access to the best research technologies. The position also allows Apple the privilege of being able to hire and retain the best designers and software developers. The company invests enough on advertisements and its financial status allows it to hire the best talent in the marketing industry, perfectly capable of making the products’ strengths well known in the market.

Competition analysis

Apple’s business strategy has allowed it stay ahead of the competition for a long time now. The company develops its own hardware and software and is an expert in doing so, giving it an advantage in cost saving and products’ perfection. It’s niche audience protects the company from the effects of competition on the basis of price. Since its customers are more concerned about the products’ quality and experience, they are hardly influenced by price competitions in the market. Utilizing the web technology and marketing has also accorded the business a major advantage. The brand enjoys a strong brand loyalty and its healthy financial position and low debt level allows the business to take advantage of new opportunities.

Porter’s five force analysis

The consumer electronics market is not yet mature, offering Apple opportunities to experiment. Apple’s brand identity is strong putting it in a better position to market itself. Microsoft’s windows OS and media player for video and music still remain a big competition for Apple. Rivalry in the OS and computer hardware market still remains a challenge especially in the Linux applications. There are many upcoming online music stores with similar features to those of Apple such as Napster while other companies now have music playing devices such as MP3.

Supplier power

Apple’s market is experiencing a positive growth as it establishes a presence in more countries. However, lack of substitute inputs poses as a major challenge for the company. Apple’s processors suppliers include IBM and Motorolla, both companies with high bargaining powers. Strategic alliances between suppliers Apple will offer the business considerable advantages. Its music suppliers such as BMG, Warner and Sony are all big companies with high bargaining powers. A strategic alliance with Apple’s competitors will harm Apple’s online music store, which is among the company’s strongest products.

Barriers to entry

Due to high levels of competition today, Apple may not enjoy absolute cost advantages as it tries to penetrate new markets. In its existing markets, Apple’s brand identity serves as an advantage, making it hard for new entrants to gain market share. Its financial position also makes it easy to meet the capital requirements for new markets and fight new entrants’ strategies. However, there is a bigger threat from businesses offering streaming video and audio technologies such as Verizon. “There is also a threat for new entrants who come with disruptive technologies” (O’Grady, 2009b).

Buyer power

Apple’s brand identity once more offers Apple a big advantage over its competitors. The company ensures buyers have the right information about its products through advertisements and Apple stores. Many countries are today experiencing positive economic growth, which results in bigger buyer volumes (Werther and David, 2011). Price sensitivity is an issue of concern and may play a key role in product differentiation. Apple’s products are much more expensive and may discourage buyers in the low end markets.

Threat of substitutes

Due to high costs of doing business in many parts of the world, switching costs are high. A majority of consumers of Apple’s products exhibit brand loyalty, minimizing their inclinations to substitutes. As a result, performance is not very much affected by new the entrance of new products.

Strategic planning

Current strategy.

Apple has focused on a differentiation strategy to stay ahead of its competitors so far. Its business strategy is centered around attracting and keeping new customers, building a bigger market share and staying ahead of its competitors. Its rule since the beginning has been to design their own software to work on their hardware and not to use anybody’s else. This strategy has raised complains from different competitors but customers don’t seem to mind. They are willing to trade freedom for quality and efficient alternatives. In regard to communication, the company has now developed and adopted a “never talk to the press” strategy after too much publicity which almost ruined their reputation under the leadership of the former CEO. By doing this, the company is able to shut down rumors easily. It does not leak out new products until it is ready to announce and then uses the same discipline to create huge attention and coverage with new announcements.

Apple’s initial approach to staying ahead in the industry was to acquire small businesses with products that can be easily integrated into the company’s products and business. “A good example is their 2002 acquisition of Emagic which led to creation of Apple’s digital audio workstation software” (Miller, 2010). “Apple’s first acquisition happened in1998 when they acquired Network Innovations and since then the business has acquired more than five small companies, the biggest number of acquisitions taking place in 2002 with five acquisitions” (Linzmayer, 2004). The company enjoys a world wide presence with offices in almost every region of the world.

The other approach to its business strategy is making sure it stays ahead of the competition and being in a position that allows it to easily influence the market. Competitors at the moment don’t seem to have a real solution to the company’s inventions which means they remain very powerful in the market with an amazing advantage over the competitors. The company has in the recent past announced that its product iPod touch is the best selling portable game machine in the world. Any company making games therefore would want to ensure that its product is compatible with Apple’s products. Apple enjoys much more power over its competitors, business partners and even stakeholders due to the kind of reputation it has built for itself.

Over time, the company has developed a policy which allows them a good relationship with its customers by having shops all over each country they have establish a market in. This way, customers are able to make connections easily, ask questions and have technical problems solved easily. Its relationship with suppliers and other stakeholders has been without major hitches in the past, helping Apple earn trust in its external environments.

Even though Apple has faced several challenges with its reputation as an employer, especially in the Asian region, it still remains one of the most attractive companies for talented professionals. Good salaries, benefits and rewards have made it easier for Apple to attract highly skilled people in the labour market, and most importantly retain them. Retention saves the business a lot of money that would have otherwise been used for recruitments and training new employees. Apple also allocates a big percentage of its budget on training and team building, allowing the employees an optimum performance.

The company has a better financial status than most of its competitors right now making it more attractive to organizations seeking partnerships in the market such as music content providers. Apple has a stable business model, a big market share, a high level of technology and ability to keep inventing new products, factors which keep it at the top and once more favourable to consumers. Other strategies for Apple include consistency, education sales, developing products that deliver, outsourcing most of its operations, new innovations and attractiveness.

Strategic plan for the future

Apple Inc. seems to have everything in place for a brighter and better future. However, it still has areas which need to be addressed if the company has to stay at the top. The company’s reputation as an employer is under threat after proven allegations that one of its contracted manufactures in China has been overworking employees and paying them badly. “Foxconn company has been accused of having more than 200,000 workers living in the factory and working for over 60 hours a week”” (Bach, 2010). It is for this reason that the company needs to put more emphasis on labor audits. The strategy will help the company retain most of its employees and attract better talent in the market.

The company is also faced with challenges in its advertisements. Even though it has very professional commercials, the adverts are criticized for giving very little information to the consumer. The business’ future strategy must include better advertisement methods that will help Apple’s customers make more informed decisions. The company’s digital rights management doesn’t allow easy sharing of content and this is causing a lot of criticism from both the competitors and customers. This could be a potential threat for the company as it could cause content providers to withdraw if they got better offers. With proper considerations, the company’s future strategy should include a revision of this policy to allow its customers access more content from the competitors’ online stores.

Strategy evaluation and selection

Apple’s hardware and software integration has received a major step after it introduced its own iPad’s chipset. As a result, the company will not need the third party chips from other designers, making it less independent of third parties. It will have cost saving effects on the business and it will help it make a chip that meets the specific needs of its products. Other bigger manufactures of chipset include Qualcomm and Nvidia, who Apple is hoping to outperform. According to O’Grady (2009a), “Apple has moved from buying something off the rack to buying something where they have the pieces and they can tailor it themselves to their unique body shape”. The A4, chipset is one of the pieces expected to be very successful.

Apple seems to be moving away from the adobe Flash, which is currently still commonly used for access and use of video and animation products. “This campaign is aimed at steering its customers to its iTunes and app stores, where they can find video content and applications that replicate the flash content, often at a price” (Linzrr, 2010). The companies strategy is to move more things to the app store from the web. This also allows the company attract a lot of attention from the developers, giving it an advantage.

The computer making industry still holds a lot of potential for Apple. Currently, Dell seems to be a real threat to Apple in the computer industry by offering affordable products. Just like it has done with its digital products, Apple is investing on developing high quality and unique computers and taking advantage of its global presence to sell them. Another area of major focus for Apple is solving the current challenges it is facing such as poor employment terms and advertisement strategies. The business needs to offer more information about its products to its customer when advertising them. It also needs to carry more employment audits to ensure its reputation as an employer remains intact.

Strategic management involves a continuous process which includes setting targets, implementing them, evaluating them and making changes where necessary. “As performance results or outcomes are realized at any level of the organization, organizational members assess the implications and adjust the strategies as needed” (Lamb, 2000). Many business today appreciate the concept of strategic management as they try to adapt to constantly changing business environments and consumer needs. It has become an important tool as organizations try to meet their short and long term goals.

“Strategic management is reliant on an organization’s capacity to maximize trends, express decisions by constantly reassessing progress and on the availability of enough resources” (Karami, 2007, Pg. 20). An important resource in this process include efficient and enhanced management and organizational structures. Other important resources include competent employees, financial capability to launch new strategies and strong business tools. Lastly, time is an important resource in strategic management.

In strategic management, targets and timescale are relevant in evaluating the bench-marked outcomes (Hage, 2007). Time as a resource must be used well when implementing strategies and the only way to tell whether this is being done is by using timescales. A good strategy is one that is timely and relevant for the business at that period (Sharma and Mark, 2004). Timescales must be realistic and put in place in consideration to the available resources. Smaller businesses with less financial capacities might take long to implement strategies (Shonfield, 2001).

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BusinessEssay . "Apple Inc.: Strategic Management Case." November 27, 2022. https://business-essay.com/apple-inc-strategic-management-case/.

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