Apple’s Share Increases
1. Executive Summary:
This paper attempts to review the Apple Inc. corporate operational strategies that have influenced it success in the marketplace, making it one of the leading Computer hardware manufacturers. It is focuses on Apples product development strategy, the iPod in particular. It also looks at how Apple can successfully apply Information Technology Metrics to enhance its business operations. It also evaluates whether there grounds exist to raise issues of Ethics should Apple decide to sell customer Information to other business and what would be likely repercussions in the event customer information ends up on an anonymous website. Moreover, the benefits iTunes- the on-line music business added to Apple’s balance sheet are scrutinized and how Apple can use environmental scanning to gather business intelligence. This paper further uses the porter’s five forces model to analyze Apples buyer power and supplier power, identifying which of the five forces Apple addressed in introducing the iPhone.
Apple Inc is an American multinational Corporation which designs and manufactures Consumer electronics and software products. The products include Macintosh computers, iPods and the iPhone, Pro line laptops (Mac Book Pro) and desktops (Mac Pro), consumer line laptops (Mac Book) and desktops (iMac), servers (Xserve), Apple TV, software, Mac OS X and Mac OS X Server operating systems. The Corporation was started by Steve Jobs, Steve Wozniak and Ronaly Wayne. This was in the year 1976.The Corporation was initially called Apple Computer Inc but the word Computer was dropped reflecting the dynamic expansionism mood at the company at the time. Apple has about 35000 employees spread across the world. It had sales revenues amounting to US$ 32.48 billion in its fiscal year ending September 2009. One of the milestones of the Corporation was the selling of 6.9 million iPhones in the first quarter of 2008 (Marr, 2006).
Apple ‘s Corporate Mission is to provide exposure to emerging companies in order to achieve success in the Financial Markets and to help its clients, brokers, investors, and employees realize their true potential through mutual growth. The Corporation’s Vision combines the expertise of its Management Team with the industry knowledge and expertise of the managers of each individual company. The primary focus is to strengthen the operating structure of the entity and to lay the foundation for increased growth and profitability. Apple Corporation partners with a number of other companies including Intel. This partnership resulted in the production of Intel based Mac computers in the year 2006. Apple Corporation exhibits a strong corporate culture that influence performance of duties within the organization, this culture drives the corporate affairs of the company, its consumers, suppliers and stakeholders. Apple has also cultivated a culture of acceptance of the Corporation’s products all over the world. The culture cultivated by the Apple Corporation tends to facilitate the control of the Corporation as it establishes the standards and conduct of employees within the Corporation (Philip, 2009).
Apple Company has a variety of business lines, the most successful being SBU with direct consumer products in the market. Apple also provides SBUs in line with its objectives and goals to the consumer. Its SBU has become an important commodity in the market. The Apple Advantage SBU as it is commonly known is dedicated to offering sales, technical and product management resources. Apple line SBU supports a complete line of Apple products and also provides access to hardware, software and service offerings. The SBU ensures professional audio/video installations, multimedia development, desktop publishing and key aspects of the healthcare system. The Apple base SBU recruits additional vendor business partners to ensure resellers have access to the products they need to deliver the latest most profitable Apple based solutions (Jerry, 2008).
The Apple SBU makes it possible for the distribution of a full range of Apple products including desktops, notebooks, storage, iPods, accessories and software. The company ensures the efficiency of this strategy through training of the people and institutions that need to use the facility. The current products of the Apple Company in more detailed analysis include the Mac and its accessories which are the Macmini, iMac ,Mac Pro, workstation, Macbook, MacBook Pro and Mac Book Air. The iPod include the iPod Classic iPod Nano, iPod Shuffle and iPod Touch. The Apple TV is a good innovation from the Apple Company. It is a set top video device intended to bridge the sale of content from iTunes. The device syncs either a wifi or a wired network, with ones computer’s iTunes library (Earnshawon, 2009). These are the products that Apple churns out to stay ahead of its competitors. It also rigorously advertises in line with constant consumer education and enlightment. This clearly shows the effort that has been made by the Corporation in improving its performance.
3. The Questions:
Apple Inc. as is known today would have long been resigned to history. iPods came around when Apple badly needed a product that would boost its image in a big way. That is exactly what iPod did. Apple was on a shaky financial ground, it had not released a major product for sometime (Earnshawon, 2009).
Efficiency IT metric gauges the performance of the IT system itself including throughput, speed, and availability. Notwithstanding what is appraised, how it is appraised, and whether it is for the purposes of efficiency or effectiveness, there should be benchmarks. Benchmarks are pedestal outputs, comparing those outcomes to optimal system performance (standard values), and identifying steps and procedures that would improve system performance. Efficiency IT metrics focus on technology and include; throughput, transaction speed, system availability, Information Accuracy, web traffic and response time. The best mix of throughput transaction speed, system availability, information accuracy, web traffic and response time will definitely improve Apples’ business operation (Philip, 2009).
Effectiveness IT metrics are trained on the organization’s goals, strategies, and objectives and incorporate: Utilization, Consumer contentment, Conversion rates and Financial. Quality training of Employees will enable Apple to guarantee higher customer satisfaction (Philip, 2009).
Information given to Apple by customers is privileged information protected by the laws regulating the handling and management of private and confidential information. For Apple to provide this information to a third party it would need at least a written letter of authorization from the owner of the information. If it fails to secure permission from the customer, it may face a civil suit from the client suing for breach of confidentiality (Jerry, 2008).
Apple business would automatically suffer a decline. Customers will get worried about their information getting into the wrong hands. This will lead to many of them looking for alternative technology service providers, who appear to have more stringent mechanisms for safeguarding and protecting customer information (Asce, Library 2003).
A competitive advantage is a tangible or intangible benefit a firm enjoys, which at the same time is complex or impractical for other competing firms in the same industry to acquire or enjoy. These advantages invariably include the company brand, quality care of customers, structural costs, and the brands patent. Whatever the advantage, for it to be regarded as sustainable it must both be proprietary and unique (Marr, 2006).
iTunes provided Apple with a very unique and inimitable product. This definitely gave it a competitive edge in the market. No other company had come up with the product. It was a first. Apple consequently reaped maximum benefit and although other company’s like Microsoft tried to release their own versions, Apples iTunes dominate the Market.
Environmental monitoring is the attainment and scrutiny of happenings and developments in the settings outside of an organization. Organizations monitor their competitors through situational monitoring (Philip, 2009). Apple Inc. operates in competition with other companies. Thus it can only thrive when it’s in a competitive setting. For Apple to recognize its strengths and weaknesses, it invariably has to study its competitors. In the analysis of its competitors, the Corporation will most likely discover opportunities for and threats to its existence from its technological background (Marr, 2006). A SWOT analysis methodically analyses each of these dynamics and the approach that mirrors the most appropriate match between them.
Buyer power is heightened when buyers have a number of choices of whom (suppliers) to procure from and deflated when their options are restricted (Earnshawon, 2009). Apple has lower buyer power for its products, especially the iPod. There aren’t many substitutes in the market. The one’s that exist cannot match the quality and design superiority of the Apple products.
Supplier power is heightened when buyers hardly have any alternatives of whom to procure from and diminished when their options are innumerable (Earnshawon, 2009). Apple is in a position of strength as far as the Supplier power is concerned. Apple products are differentiated. Consumers identify with these products and every one want to have the Apples iPod.
Organizations in general adopt one of Porter’s three standard approaches when moving into a new market. These standard approaches incorporate; broad cost leadership, broad differentiation and focused strategy (Asce, Library 2003). Apple adopted two strategies; the broad cost leadership and broad differentiation. These strategies enabled it to create a competitive advantage over other plays in the market.
Apple addressed the Buyer power and Supplier power. The buyer power for its products, especially the iPod is low. This guarantees that it can sell as many as the consumers wish to buy. There aren’t many substitutes in the market. The one’s that exist cannot match the quality and design superiority of the Apple products. On the hand Apple’s Supplier power is very much heightened. It is the company that sells the original product from the original idea. The other competing companies are only copying from Apple. This ascertains market for the products.
Apple Company has achieved a rare fit in the technology arena; it has been flexible in its management procedure, thus allowing creativity and innovation (Philip, 2009). As it continues to grow it is continually consolidating its strengths and opportunities while endeavoring to reduce both its internal and external weaknesses and threats, respectively (Marr, 2006).