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Background of the Company
This is a strategic management assessment and business plan analysis of one of the most popular brands in the world: Apple, Inc. The company, which was formed in 1977 as Apple Computer Company, is now the synonym of high-quality smartphones and computer products. The company is often lauded to provide some of the best and most innovative products in its class. From a humble start to the company, Apple today stands at a revenue of more than $265 Billion making it one of the most formidable names in not just the IT industry but in the entire corporate sector. From launching iTunes and thereby revolutionizing the music industry to successfully launch a series of iPhones, Apple today stands at the epitome of financial success and innovation. However, just like any other enterprise, Apple Inc., too has its own issues. This assessment would take account of the issues and strategic planning of the company to recommend a future strategy for the company, which could help it in sailing against the odds and continue to have the successful stint on the stock exchange as well as the global markets. Any organization could not be at top of its game for a consistent period as Apple has managed to. However, the important part is to ensure that the strategic processes of the company are well-directed to attain the long-term goals.
There is no doubt that Apple has one of the most exemplary and successful business plan and strategic management process in the corporate world. A large part of the success of the company could be attributed to the efforts made by the founders in forming a company, which not only understands the needs of the consumers but also provide them with the products and services which exceeds their imaginations. With passage of time, the popularity of the flagship products is not as much as it used to be. Some of the crucial products such as the iPods have become irrelevant in the current state of things. The Apple TV is one of the biggest issues before the company. The company has been successful for a significant period. However, now it needs to address the issue, which have, arose largely due to the successful operations of the company during the past two decades.
The yardstick for the strategic success of a company could be attributed largely to the overall trust, which the investors and shareholders bestow in the company. In the past five years, there are hardly any other companies in the IT sector, which have grown exponentially. With market capitalization of over 839 billion USD, Apple has proven it an undisputed leader of the stock market. The following graph depicts the overall performance of the company’s stock in the past five years:
Figure 1.0: Apple Stock Performance, Yahoo Finance (“Apple Inc | Five Year History”, 2018)
The growth demonstrated in the five-year period by the stock is over 160%, thereby meaning that an average return over more than 30% per year of operations. If the most important ratios of the company are taken into consideration for the financial analysis, the following results are achieved:
The financial statement analysis of the past three years does not pose any challenge as far as the financial affairs of the company are concerned. Apple Inc., has been a benchmark of the industry and this has been proven over time by the assessment of the financial statements as well as the stock performance of the company. However, one of the biggest limitations of this research is the fact that the accountants or the investors might not still notice the issues. However, the corporate sector feels that the intense competition in the smartphones market and the insistence of the company to overlook some of the crucial factors could prove to be catastrophe for the organization in the long run.
Despite the financial success and the overall progress, which the company has made in the past couple of decades, one cannot deny the strategic issues faced by the company. The company has been operating in an industry, which has consistently challenged its supreme position. With new entrants and availability of a wide range of products, the company has started to realize some of the basic flaws it its strategic management processes. Some of the biggest strategic challenges before the company, despite the overall good run on a financial perspective, are as follows:
- The smartphone market has become very similar to the PC market: This is one of those areas, which are outside the purview of the control of the management. There was a time when the consumers really cared about the changes in technology introduced in the laptops and PC’s (Horwitz, 2017). However, with course of time, the overall importance of the changes and innovations in the industry began to die. The marketing expenditure of the PC companies started to reduce and there was a general sceptic behaviour from the consumers in regards of the PC market. Similar trend has been shown by the smartphones market. With a constant increase in the number of players in the market, the consumers are no longer as interested as they used to be for a new launch of an iPhone with loaded features. The recent failure of iPhone X and its successors could be the indication of a general shift in the trend related to the tastes and preferences in the industry along with the overall impact on the company (Moon, 2017).
- Innovative culture could be very tough to carry forward: Apple has been one of the few companies in the world, which have been consistently able to cherish the consumers with the quality of goods and services on offer. However, the critics have often written off the company’s latest offerings citing that the features offered by the company in the new iPhones or iPads are excessively repetitive. Apple has been a premium brand in the sector. However, people have now started to openly criticise the pricing policies of the company in wake of the fact that the company does not have to offer anything new but charges a high price for the features, which are available in other brands for a very competitive price (Ritchie, 2017).
- Addressing the issues of emerging economies: The Company should also be aware of the developments in the emerging nations in regards to the sale of iPhones and other Apple products (Jackson, 2013). The organization cannot rely completely on the western market for the long-term sustainable growth. There has to be continuous efforts, which could ensure that the sales pick up in the markets where Apple has failed to create and affect namely India and China. The total sales of iPhones in China had reduced by 12% during the current financial year. In India, which could soon be one of the top two mobile phone consumers in the world, the company has failed to capture a significant part of the market where the other companies had capitalized.
- Not addressing the core issues: Some of the core issues related with the strategies of the company have not been addressed. Though the company has mentioned the importance of having a well-defined strategic management process, it seemingly has failed to address some of the most crucial areas, which are to be taken into consideration. It should be working on outside acquisitions, as corporate restructuring is something, which should be back on the mind of the management. Besides this, the company should be willing to introduce some resources in the troubled areas, which have been discussed in the later parts of the assessment.
Apple’s historic business plan is one of the most sought-after case studies in the corporate sector. However, the important factor here is not to take account of the historical analysis of the company but to understand what the company has been doing in the current perspective. The strategic plans are important in understanding the current set of affairs of the company and how it would move strategically in the future. One of the most important aspects of the company could be its lenient business thinking processes (Nwogugu, 2015). The company has design, manufacturing, and marketing operations in different parts of the world. Just like any other organization, the functional departments are made up by taking consideration of the functions in the groups.
In this context, the strategic management position of the company could be taken into consideration. The strategic management position could be best explained by taking consideration of the mission and vision statement of the company.
The Moto of Apple, ‘ Think differently’ the company continuously think innovatively, in a way that new technology is in advance of the previous one and it overrides the weakness and create a exploit the new opportunity by introducing some innovating product and services. Other computer manufacturers have attempted for decades to replicate the icon classic appeal of Apple design, but none has succeeded in the manner of Apple.
To produce a product with the high quality, low cost, user friendly, easy to use for everyone and innovating technology for every individual users. The company is providing a high technology, which does not, mean that we are supposed to intimate the non-computer users.
Apple follow the following strategy to convert it mission and vision statement into the reality. This strategy comprising of tools and frameworks, that are being used by the managers of an organisation for the formulation of strategic analysis and evaluating those tools used for strategic planning process activities. There is no doubt that the company had faced some of the biggest issues in the past three decades and the strategic management processes of the company have ensured that the issues are addressed in an effective manner.
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