Steven Wozniak and Steven Jobs founded Apple Inc in 1976, since then the company has become the world largest electronic company in sales and production. Currently Apple has its headquarters at Santa Clara Valley, California; it’s known for its innovation and invention (Apple Inc). From the humble begging, the company has managed to remain competitive from the era of Apple II in 1979 computers to contemporary smart-phone and tablets markets which have taken the central drive in electronic industry (Peelen 26). To remain competitive in the different periods and waves of varying customer needs, Apple has continued to develop new strategies well defined by adherence to the rule of strategy dichotomies. This paper evaluates competitive forces and strategic issue shaping the smartphones and tablets industry from 2012; it will also undertake an internal strategic audit of the issues that Apple faces using organizational & strategic models.
Competitive forces and strategic issues shaping the Smartphone & Tablet industry from 2011 onwards
The growth in technology and literacy level in the globe has resulted to changes on the commodities that people want more so in the electronic industry. Other than the demand pushed by customers, the industry has been pushed by high competition affecting different companies in the industry. In the electronic industry, for a company to remain competitive, there is need to continually improve one products and ensure that the products meet the demand of the market. The drive from competition as well as the demand from customers can be seen as the main moves to the fast development of smart-phones and tablets.
Macro-frameworks
The macro framework that is driving the smart-phone and tablet markets is the demand that customers have on the industry to come-up with products that meet their daily needs more effectively and efficiently. Smart-phones and Tablets have been developed to incorporate much more than a basic phone, a camera, and a computer system. With the product, customers can get these services from the same machine. Before 2010, people needed to have different electronics gadgets each to undertake a particular task, for instance one needed to have a computer/laptop, a phone, a camera, and a video recorder. When looking at the above sample products, there were bulk products with people. This was the start of demand by the people to electronic companies to come up with products can handle the above roles together. In 2011, the Smartphone and tablets started to get in the market after their survey and market testing. They were welcomed by different people more so the business and high class category of customers (Apple Inc).
The second macro framework that can be seen to have resulted to boom and high competition in the Smartphone and tablet market from 2011 is the increase in the number of companies producing electronic products. Every company was looking for the best way it can satisfy its customers and still remain competitive. The shift moved from attaining corporate goals and objectives like profit making to studying the market and knowing what the markets are in need of and then making efforts to provide. In 2011, middle class, high class, and business people were willing to spend high on an efficient gadget than have a number of electronic gadgets. This created a boom in the smart-phones and tablets market. Nokia Corporation and Apple Inc were among the first companies to develop the products; they aimed at increasing their customers experience and improving their products quality.
Smart-phones and Tablets Porter’s 5 forces
Threats to new entrants
The fast growth and demand of electronic products has given the company that is a step higher the upper advantage in the market. In 2011 smart-phones and tablets industry, companies that have created a good name in the market where the dominant and were much favored by the market. Some example of companies that saw much breakthrough was Apple Inc and Nokia. To venture, enter, or develop your products as a new entrant in the smart-phone and tablet industry was a challenging thing. It would have started with convincing customers that the product you make is quality before this was attained, a new and better product is developed.
The world is experiencing growth in globalization, international trade has created an opportunity to for companies to develop and sell their products across board. The increased market has been favored by advancement in technology, good governance, and improving relationship among nations have given the electronic companies a good chance to innovate, invent and create new products. Smart-phones and tablets are products of the improved relations (Chong and Binshan 290).
Threats to substitute products
Modern populations have adopted the use of computers and electronics for their various functions; the gadgets have been in the market for long periods of time and costs relatively affordable. Smartphone and tablets came to the market with the intention of consolidating and creating efficiency to customers; however they were relatively expensive. Customers were finding it more affordable to buy the traditional gadgets since they served the same purpose. There has been a number of companies venturing in the market with faster phones, laptops and other substitute products; they offered smart-phones and tablets high competition as there was easy swap or substitute of either; technological angle, the apple can be seen as a pioneer in a number of electronic gadgets including the smart-phones and tablets, however it faced immense competition from Nokia, Samsung, and Sony Ericson who were also producing similar products.
Buyers bargaining power
One factor that moved the smart-phones and tablets market is the demand by customers to have better and more efficient products. Customers needed products that met their needs at all times with much reliability. The demand of the customer has forced electronic companies to come-up with products that meet the demands of the people. The much demand and the need to satisfy what customers want has made the turnover of the smartphones and tablets to be high with new once coming in a matter of days. The challenge with the fast innovation means that brands were becoming absolute within a small period of time.
Suppliers bargaining power
Apple and other smartphones and tablets producers depended on different suppliers to give them the products they needed for the products. The suppliers were for both physical and software materials. The nature of 2011 smartphones and tablet markets saw the demand come from the buyers so suppliers never played much role other than ensuring their service or products are better than those provided by the competitor (Fred 28).
Competitive rivalry within the industry
The rivalry in the electronic industry and the competition for elite customers has been the main drive behind the fast growth of smart-phones and tablets in 2011. The growth was aimed at giving customers what they deserve in a move to beat competitors. With the notion of becoming better than what the competitor is doing, much innovation, invention, and creativity was put to play. for instance Nokia was willing to come up with products better than what Apple had and Ericson also needed to make better products. with the competition in the industry the sector was moving and oscillating at relatively high rate.
Industry (ILC) theory
The Industry life-cycle theory looks into how long a product remains in the market and continues to satisfy customer needs. The growth of smartphones and tablets can be characterized with short life-cycles; the short life cycles come from the fast changes and new innovations from companies producing the products. There were times that a certain model, characterized by the shape and the applications would last only for some few months then another one of higher carbe is invented. The high changes and innovations that saw the industry meant that when companies develop one product, it needed to engage in highly competitive marketing and advertising campaigns to ensure that they get the cream of the market before it becomes saturated or outdone by competitor. The expected short industrial lifecycle means that companies in the electronic industry were selling the products at relative expensive prices to meet their products development cost as well as other associated costs. The shape and size of the products were other parameters that were changing at an alarming rate; when a certain smart-phone or tablet was made, it aimed at meeting the demand of a particular group. It thus needed to be of the right color and shape.
Internal aspects of Apple Inc.
Apple inc. is respected for its increased innovation with new products being introduced in the market; for three consecutive years, 2006-2008, the company was voted by Fortune 500 as the world’s most innovative company. the innovation and invention adopted by the company is one of its main strength; some of the products that the company has managed to innovate are laptops, computers, Software, consumer electronics like I-pod and I-phones, MP3 player, and mobile phone. Before producing any of the products, the company undertakes wide customer research to understand what they want then develop the same; the innovation aimed at meeting customer needs has created a growing customer loyalty to the company products (Wheelen 198). the following are other areas of strength that the company has:
Financial & resource appraisal
The wide national and international sales experienced by Apple Inc has given the company a good financial background to research and come up with new products. IN 2011 financial accounts, the company recorded revenue to the tune of us$108.249 Billion and operating profits of us$33.79. apple strength in financial base also result from past revenue operations, the company has the funds and resources to diversify its process internationally. Other than the funds generated from the revenue of the company, the company has high reputation and has floated its shared in the NASDAQ Stock Market; the company is doing well in the market and able to attract more investors. With the reputation that the company has managed to get, banks and other lenders are willing to work with the company and give it loans and other credit facilities. When this happens, then the company can be able to come up with products without being restricted by finances or resources. Other than the financial resources point, Apple has a well managed human capital that adapts to the policy of the company. the staffs are highly motivated and are willing to innovate, create and come up with new products. information resource is another strength that the company is riding on; there are much research and development programs in the company, they give the company direction on the products and processes to adopt. In contemporary business environments, business leaders need to adopt effective management strategies to see their companies attain competitiveness and attain corporate goals and objectives.
With the demand of strategic approaches, strategy dichotomies have become common when making business moves at Apple Inc. Strategy dichotomies are inherent throughout a strategy; it has the aim of ensuring that particular strategy is unique and capable of handling the challenges facing an organization at the time of implementation. Generally strategic dichotomies can be classified into three as strategic thinking, strategic change, and strategic formation; although the dichotomies can be studied separately, they have much interaction to ensure that success and strength of an organization in relation to its strategic opportunities has been attained (Sadler 123).
Value chain linkages
To increase its competitiveness, one area that Apple Inc has invested in is value addition and value creation. The company has set pace in a culture of innovationists where employees, team leaders and the management are mandated with the task of coming up with the right approach to business. From high innovation of the team of human resources the company has managed to come up with product differentiation policy were products are known for their quality, reliability and efficiency. Value creation at Apple is a policy that the company implements to ensure that customers’ needs and expectations are surpassed by the kind of products from the company; marketing and product development team have been credited as one of the strongest in the world. they always aim at creating close connection with customers and using their feedbacks to advise the company on the best products they can make to meet the growing demand. Value is added from the procurement level of products to the company; the supply and procurement department is mandated with the role of ensuring that the products that find their way to the company are of high quality. When making strategic policies, Apple Inc. ensures it understand the market situation and the level at which its operation and the position it’s intending to operate at. With the current situation and expected situation analysis, the company establishes the gap to fill with appropriate strategy. According to De Wit and Meyer, 2010 p. 681, Apple Inc has been able to attain leadership in the fiancé competitive telecommunication industry because it observes strategic dichotomies in its works. To ensure that the company retains a growing number of customers, the company renews its strategic policies through innovation, creativity, and invention. Strategy renewal at Apple takes the form of coming up with new projects, new products, processes, and services. Strategic renewals at the company are aimed at enhancing competitiveness and leadership in product development and service delivery in the industry (Meinolf 89).
Leadership, power & politics
The leadership adopted by Apple has seen the company attain high competitiveness in the market. Leadership in the company has emphasized on the need to have democracy in decision making and ensuring that when making decisions staffs have been involved. The company continuously encourages their staffs to give their opinions on different elements of the company. To promote and improve staffs skills, Apple sponsors educational courses that are related to the business or related to the role an employee is taking in an organization. Power in the company is seen as the means through which the company manages to use its staff’s intellectual capacity. It is through proper exercise of power that politics in the company are targeted to making the company competitive. Politics in the company are democratic and have much tendency to making the company better working for staffs and the management. With proper leadership, Apple Inc. has managed to grow internal talents whom management gurus have expressed much confidence with them when driving the organization. In case of conflicts, Apple management ensures that structures raid address the root cause of the challenge and aim at solving the problem for ever.
Decision making and corporate strength
The strategic renewal adopted at the company falls to a large extent to invention, development, and innovations change approach; the company looks into the market and come up with the most appealing and customer focused products. Lately and the most focused change was the innovation of I phones and IPods that have changed the world’s phone market to the favor of the company; the move was a strategic renewal of the company’s synergies and was aimed at improving what customers had been getting from the electronic industry. The change was developed from direct investments, exploiting research and development, and staff involvement supported by management; the approach to strategic renewal adopted by the company is aimed at ensuring change is adopted at all levels of the company and accepted across the board (DE WIT and MEYER 45).
After strategic renewals that give intended outcomes, Apple’s management has the role of directing, coaching and training subordinates; this is aimed at ensuring there is continuity in the same areas and probable future improvements. When strategic renewals outcomes are partially intended then leaders can use navigation and interpretation approaches of management to either decide to improve the strategies results or to leave the method. In the cases that strategic renewals result to unintended changes are seen, then management needs to take care and nurture the situation; before moving away from the strategy, it ensures that it has learnt a lesson for the future (Haberbeg and Rieple, 21).
When implementing strategic renewal, Apple has different approaches to change, any change is vested on an in-depth understanding of current situation and moving to the intended destination that the change aims to drive the company. It’s always a strategy of where we are verses where we intend to go; with the two ends know, and then the management has to look for the right pathway to move. Strategic renewals have three main classifications of the outcomes as, intended outcomes, partially intended outcomes or unintended occurrences; an understanding of change images assists managers to develop the right intervention to reduce chances of change delay, failure or resistance by employees (Oster 194).
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