Apple Inc Strategic Plan

Introduction

Apple is one of the largest and most successful companies in the world, with its provisions in many technology products and unique software services (Miller and Maxwell, 2016). The company headquarters are located in California. Over the years, they have been able to develop computers that are user friendly. The company has grown into a multinational company that is generating personal computers as well as more consumer electronics. The company products have comprised of iPad, Macintosh computers, and iPhones.

Apple’s Current Mission, Vision and Value Statements

Considerably, Apple’s vision, mission, and value statements have established the basis of the company and the continued success of the company as one of the topmost and valuable firms in terms of technology products in the world. The company has applied the vision and mission statement in conducting their day to day activities in order to safeguard the competitive and growth strategies of the company. It is important to understand that the vision statement offers a direction that the firm will take towards its growth as well as the development of products and services in the market. On the other hand, the mission statement is used to evaluate the measures that are needed by the company in order to ensure long term and continued success of the company.

Vision Statement

The vision statement of the company has detailed what the company is all about with a focus on the particular product ranges and the quality offered to the customers. The present Vision statement of Apple Inc is, “We believe that we are on the face of the earth to make great products, and that’s not changing.” (Duhigg and Bradsher, 2012). Through the vision statement, the company has highlighted that they are always determined in greater quality for their products for their customers. The statement has also pointed out the intentions of the company as a single source of revolution in the designing of personal computers in the technology and software industry.

The Vision statement above is in-depth and identified the firm’s comprehensive approach in ensuring that there are continued growth and development. For instance, the vision statement above has outlined the major objectives of the company, such as the simplicity in the development and design of the products and the continued focus on innovation in which the line of the company has increased the strategy for innovation. Considerably, the firm’s organizational culture has been outlined in the vision statement, which highlights the collaboration among the employees and excellences being a guideline towards the success of the company. The company has settled for nothing less than making change and excellence in their products and services. Therefore, the vision statement of the company is quite detailed since it incorporates the primary aims and purpose of the company. The vision statement is thus essential in helping the company in offering direction to the employees and decision-makers.

Mission Statement

The Mission statement Apple “is bringing the best user experience to the clients through continued innovation of software, hardware, and services.” (Riegel, 2015). Apple has ensured that they design the best personal computers globally, along with software and hardware. The mission statement of the company has highlighted a list of the activities that they plan to undertake to differentiate the business.

The mission statement of Apple has also indicated the possibilities that they pose and captured the attention of the clients as the best place to look for a number of technology potentials. The company has focused on the dynamic changes and has stayed clear in the impact of positive change. The component of the best user experience indicates that Apple has prioritized the best experience for the clients while utilizing the products. The component of improving the lives of the people has been linked to stimulating user-friendly technology and implementing security features that will enhance the experience of the user. The component of top quality products has been linked to the commitment of the company to deliver high-quality products and services in all aspects through the integration of high-quality software and hardware. Therefore, the mission statement has clearly outline Apple’s scope of business.

Apple Inc. Strategic Goals.

In line with the present vision and mission statements, the company mentioned three key long-standing objectives that entail environmental responsibility, leveraging the capability to design and create and, lastly, enhance and expand (Riegel, 2015). The first objective is part of the firm’s vision statement that entails responsibility towards the environment. Thus, the firm seeks to concentrate on utilizing renewable forms of energy in its retail centers. The challenge the firm faces is sourcing readily available renewable energy in its retail chains. Moreover, the firm seeks to accomplish environmental accountability through disposing of poisonous substances in the process of production and merchandise.

The second goal is offering world-class invention and integration in the entire range of products and services to maintain a competitive edge over the rivals in the market. The firm aims to stand out from other competitors, not by the price range, but the competitive advantage due to the products that attract clients. In this manner, the aim of being exceptional as compared to other brands will support the company in retaining its competitive edge and position in the smartphone market.

The third goal involves enhancing and expanding. To continuously develop and improve, the firm heavily finances in Research and Development. Over the years, the firm increased the funding from $2.4 billion in 2011 to $4.5 billion in 2013, demonstrating the significance of enhancement and expansion. Also, the firm trusts in a high-quality purchasing experience; therefore, the development of retail and online outlets to offer quality services is an important goal.

Apple Inc. SWOT Analysis

The success of Apple Inc. is associated with the capability of utilizing the business strengths to overcome the weaknesses and threats, and exploitation of opportunities in the industry. In this case, an analysis of Apple Inc. examines the corporation for the pertinent strengths, weaknesses, opportunities, and threats, in regards to the numerous industries and markets.

Strengths

Strong brand: According to Khan, Alam, and Alam (2015), apple is regarded as one of the utmost valuable and robust brands around the globe. The firm holds a reputation for creating highly original, well-made, and well-functioning products, along with offering an excellent experience for the consumers and sound economic performance. The firm has been capable of accomplishing a robust brand reputation as a result of its advertisement and marketing capacities.

Range of Products: The firm develops a wide range of products that enable it to gain the right profit margin. The products range from Mac, iPod, iPad, Apple watch, Software, Electric Vehicles, and Apple Energy. Through the diversified portfolio, the firm ensures it provides modern technology to its clients, with most products considered to be popular, therefore generating more revenue (Tan, 2013). Moreover, the range of products guarantees the stability of revenue earnings. For instance, sales for a specific product may slump for a specified duration of time, but another may experience high sales. Therefore, it assists the firm in managing the risks of failure.

Loyal Customer Base: Despite not having a loyalty program, Apple Inc. enjoys a loyal clientele base. The firm has gained praise from its consumers due to its invention, design, trustworthiness, and the class they express. It is the main reason they continue purchasing the products despite the existence of cheaper and viable options in the market. The rate of retention in the smartphone market is high as compared to rivals. Apple retains 74.6% of the clients as compared to 63.9% by Samsung and 40.7% by LG (Tan, 2013).

Distribution: The firm contains a robust distribution framework with 470 chain stores in seventeen nations. Apart from the chain stores, it distributes the products through trade associates, online platforms, along with other different top retail stores. Moreover, the corporation initiated the Apple Genius Bar to directly issues and complaints raised by clients within the retail outlet. Therefore, apple’s concentration on sales and services is renowned.

Weaknesses 

Restricted Distribution System: Apple contains a limited network for the distribution of its products as a result of the corporation’s exclusivity policy. For instance, the firm prudently chooses the authorized retailers of its merchandise. Apple opts to use its website and stores to retail their merchandise.

Higher Retail Prices: The firm has a weakness of being reliant on the sale of high-end market divisions due to the premium pricing approach. Exorbitant prices tend to entice customers from the average as well as high-income range, during which it prevents low-income clients from purchasing the firm’s products with ease (Duhigg & Bradsher, 2012). The product’s prices are higher as compared to other established brands in the market, such as Samsung.

Opportunities

Expansion of Network of Distribution: Apple has the prospect of expanding its network of distribution as it is known to distribute its merchandise through its website for a long duration. The expansion of the distribution network will assist the corporation to gain access to more consumers around the world. The firm may achieve this through the recruitment of more third party distributing platforms or channels to generate more sales in other nations. Increasing the distribution channel will assist in high-profit margins.

Strategy on Product Diversification: The firm will manage to offer more products to its clients if it broadens the range of products. More, developing affordable products that may suit middle-income clients. With the current products proving to be successful, other innovations may assist the corporation in developing and introducing new products such as the Apple Watch (Tan, 2013). The development of a new range of products can aide the growth of the business from a global perspective.

Globalization and global market: Apple is an advancing corporation in an evolving market, and therefore, the rising GDP of developing nations is essential to increase the clientele base. Hence, increasing the consumption of the brand. Market globalization is providing individuals with the opportunity to quickly gaining access to technology products. Consequently, people will be able to directly purchase the products from the company with a short duration.

Threats

Penetration of Smartphones: One of the major threats is the entry of various smartphone brands in the market. Android has a significant 47.5% market share, while the iPhone has a 42% market share (Tan, 2013). Numerous rivals such as Samsung and HTC, use Android along with any other potential entrant in the market (Miller and Maxwell, 2016). Apple should be ready for competition, considering that Android is owned by Google, the second most esteemed brand.

Imitation: An imitation or substitute product is introduced by other entities, with most instances involving stolen technology, whenever Apple presents a new product. Whereas the design is smooth and simplistic, this makes it prone to replication. Stores around the globe retail counterfeit versions that look virtually indistinguishable. For instance, most counterfeits are discovered in the Chinese market, most of which were developed by Chinese industrialists.

PESTEL Analysis

The high performance of Apple Inc has been associated with the effectiveness of the company in addressing the external factors that might affect their operations. The success of Apple is due to the strategic management that has protected the business from external threats and exploited the opportunities in information technology and consumer electronic services.

Political factors

The influences of government-related institutions on Apple’s business include the free trade policies that have been improved, political stability in developing and developed countries, and the threats from trade disputes, especially China and U.S (Khan, Alam, and Alam, 2015). The political factors have a great influence on Apple’s operations since the company is dealing with a global market, assembling products, and outsourcing raw materials and labor globally. The political factors have posed both threats and opportunities. For instance, there is an increased opportunity for Apple to supply more products globally due to free trade policies and a stable political landscape. On the other hand, trade disputes have posed a threat to business operations since it reduces global sales and a threat to the global growth of the company. Appendix 2 shows how Apple has increased the political lobbying budget over the years as a way to develop legislation that favors the business from a long term perspective.  For instance, a call by the member of Parliament in Russia to stop the use of iPads and iPhones in the country is an example of how politics have interfered with the business operations.

Economic Factors

There is a broad range of economic factors that are affecting the operations of Apple, both directly and indirectly. These have comprised the overall inflation rate, foreign currency exchange rates, interest rates, and the macroeconomic climate in the global markets. The operations of Apple have been influenced by the stable economies, growth of the economy in the developed and developing countries as well as an increase in the disposable income among the targeted consumers. For instance, the economic stability of the developed countries will offer expansion opportunity markets. The high economic growth rate among Asian countries has offered opportunities for the company to increase its sales in the global markets.  Considerably, Apple generates 63 percent of its revenues from the global markets, which means that the revenues might be affected by the currency trend. For instance, Tim Cook, the company CEO, adopted a hedging program that was aimed at easing the negative impacts of the strengthening USD. After the economic slowdown in 2008, the company has gained opportunities from developing countries such as China who have been the largest market for mobile and computer devices (Al-Laham and Huth, 2011). Labor and material costs have also influenced the operations of Apple. For these reasons, they have based some of their manufacturing units in China, where there are cost-efficient resources and cheap labor.

Social, cultural factors

Apple business operations have been questioned about the impacts of social, cultural trends. This aspect has been related to changes in consumer expectations and purchasing behaviors. Apple has been influenced by the change in the rising use of mobile devices. Appendix 1 shows how the use of mobile and computer devices has increased in the world. This has offered an opportunity for increased sales in the company. The increased utilization of digital systems has also offered opportunities for the business. Consumer behavior patterns have also influenced sales since consumer trends have changed. For instance, there has been a backlash against the stylish and expensive product in most of the technology consumers in Europe and the United States, with consumers demanding low price products. The number of socially conscious consumers has increased, which may limit Apple’s product appeal. Anti-Apple sentiments have also influenced the business operations amounting to questions on the business practices, thus posing threats to the reputation of the company.

 

Technological factors

Technological factors have greatly impacted the operations of the company since it is the core competitive advantage for most of Apple’s competitors. The current technological trends such as cloud computing, technological integration in many business operations, and the increased technological capabilities have posed both threats and opportunities for the business. For instance, Apple has provided cloud services that have maximized the profitability of the business. The increased availability of more advanced consumer electronics may lead to lower demand for Apple’s unique products.

Ecological factors

Ecological factors have influenced and offered opportunities for business improvement. The sustainability of Apple has been affected by the demand for consumers to the business to assume sustainable practices that are grounded on fears concerning the adversative environmental impacts of the corporate operations. The major ecological issue challenging Apple’s operations is the dumping of cast-off electronic devices. There have been concerns with the disposal of the devices containing lithium and increased landfills. This has led to increased manufacturing costs and regulation to eliminate environmental effects. For instance, the operations of Apple have been influenced by China’s effort to limit fossils and reduce greenhouse gases.

Legal factors

There are significant legal aspects such as laws and regulations for operations that have influenced the business. The legal factors have posed both opportunities and threats for the business due to compliance requirements that have limited the operations (Masi, 2009). For instance, the focus on privacy regulations that have been a threat to the company as well as an opportunity to improve the privacy measures. Apple has faced strong legal battles and criticism regarding its policies and regulatory compliance in Australia, the United States, and the European Union. Recently, Apple has decided to come into a highly controlled financial service sector with Apple Pay, which will intensify government insights as well as regulations that the corporation faces.

Competitive Advantages

Apples competitive advantage are their product differentiation, supply chain, brand strength, and premium pricing.

Product differentiation

Operations and manufacturing at Apple are highly innovative, thus a contribution to the production of unique and innovative products. Apple has increased its market demand through its product differentiation, which includes making products that are attractive and unique. The company has always ensured that its new products are ahead of its competitors despite the intense rivalry. Through product differentiation, the company has been able to maintain the power of their prices (Johnson et al., 2012). For instance, the IOS, which was developed by the company, is greatly differentiated from other common operating systems.

Brand Strength

Apple has maintained a positive brand image in the technology and innovation industry. Apple has consistently introduced various tech products that are innovative, thus making the brand recognized as the most innovative (Huo and Lin, 2007). The brand strength has given Apple visibility in the market as well as building a sustainable consumer loyalty model. Figure 3 below shows how Apple has been strong in the market. The interrelationships between the brand products and its consumers and the strong branding have made it possible for the company to access mass markets. For instance, the brand personality of Apple is about liberty regained, innovation, imagination, aspirations, and dreams to the people through technology. Apple has been able to build a strong brand image through the removal of complexity and increased simplicity to connect more with customers.

Premium pricing

Premium pricing has been among Apple’s superiority. Compared to other brands such as Microsoft, Samsung, and IBM, the price for Apple is quite high. Apple has set premium prices for their differentiated products to ensure that the prices are consistent in the market. The company has aimed at offering high quality and unique features to their customers and used high prices as well to strengthen the awareness of additional value to their consumers. This is because the products have marinated a high differentiation as compared to the competitors.

Supply Chain

Apple has a strong supply chain network and environment of developers, dealers, and corporate associates that facilitate a strong competitive advantage. Apple has its own chip manufacturers, governs its manufacturing, and has strict procedures in the production and operation of their stores. Apple has built a community of more than 6 million software developers who have been effective to the company when it comes to creating application products (Johnson et al., 2012). This has offered Apple regulation over the whole procedure of manufacturing, product growth as well promotion, which is difficult for its competitors to match.

 

 

 

Corporate strategic plan for sustained innovation in a global marketplace

Determining the objectives and strategic approach for innovation

Apple has focused on sustained innovation where the innovation happens on an incremental basis to respond to the market and customer demands. Building sustainable innovation within the company starts with the development process that has a deliberate choice of focusing on the best way to sustain innovation in the company. According to Rothaermel (2016), determining the objectives and strategic approach for innovation is effective in building a sustained innovation. This entails establishing effective long term goals that will drive the business forward since the objective of the company should support sustained innovation.

Leveraging business model

Apple has worked across the traditional industry boundaries to create sustainable innovation. The business model of innovation is another major step in the corporate strategy that enables the company to develop a unique and new product. For instance, Apple’s business model has enhanced value creation and has been mutually supportive in the operative model.  Leveraging the existing business model has enabled drive the unique ability of the company to develop its unique operating system and ability to design the hardware and software. Leveraging the business models has facilitated sustainable innovations and continuous improvement to create value.

Focusing on creating value

Considerably, defining the unique value proposition and the kind of innovations that will capture value enables Apple to focus on sustainable innovations. Ideally, the purpose of innovation is to focus on value-creating and to offer large social benefits that make the product to be more convenient and perform better as compared to the previous product in the market (Burke, 2010). Apple’s value proposition has convinced the consumers that the products and services are the best as compared to the competitors. Through creating a unique value proposition enables the company to exploit new markets through value innovation. Value innovation has enabled the company to achieve a sustainable competitive advantage.

Recommendations

To foster sustained innovation, there is a need to close the gap between employees and leadership. Leaders and employees play a vital role in establishing a culture of sustained innovation. Through effective collaboration between the leaders and the employees, they can challenge the current perspectives and approaches driving discipline in innovation and the freedom of innovation. Encouraging new approaches to leadership by involving customers and employees in the innovation-related process will lead to a high commitment to sustained innovation.

Understanding the market and consumers will enable Apple to respond to the customers and innovate products. Due to the increased competition in the market, there is a need to understand what the consumers what thus providing what is essential to the consumers. Increasing the market focus and customer focus enables sustainable innovations since the company will develop better value and improve the current products.

In conclusion, Apple is one of the valuable companies and has many competitors in the technology industry. There is a need for the company to address the threats and exploit opportunities analyzed in the SWOT and PESTEL analysis. Apple also needs to focus on effective approaches that will sustain the competitive edge of the company through strategic planning to build a strong business strategy.

References

Al-Laham, A., & Huth, S. (2011). Strategic Repositioning of Apple Inc. In Fallstudien zum Internationalen Management (pp. 641-664). Gabler Verlag, Wiesbaden.

Burke, A. v. (2010). Blue ocean vs. five forces. Harvard Business Review, 88(5), 28-29.

Duhigg, C., & Bradsher, K. (2012). Apple, America, and a squeezed middle class. The New York Times, 21.

HUO, S. Y., & LIN, J. (2007). Analysis of Competitiveness of China’s Apple on the World Market and Its Influential Factors [J]. Journal of Northwest A&F University (Social Science Edition), 4.

Johnson, K., Li, Y., Phan, H., Singer, J., & Trinh, H. (2012). The Innovative Success that is Apple, Inc.

Khan, U. A., Alam, M. N., & Alam, S. (2015). A critical analysis of the internal and external environment of Apple Inc. International Journal of Economics, Commerce and Management, 3(6), 955-961.

Masi, B. (2009). Strategic Analysis of Apple Inc. Capstone Strategy Course (MGT440), Professor Linda Cohen, Barney School of Business, University of Hartford.

Miller, T., & Maxwell, R. (2016). Apple. Inc Global Media Giants (pp. 383-396). Routledge.

Riegel, V. (2015). Apple. The Wiley Blackwell Encyclopedia of Consumption and Consumer Studies, 1-2.

TAN, J. (2013). A strategic analysis of Apple computer Inc. & Recommendations for the Future direction. Management Science and Engineering, 7(2), 94-103.

Rothaermel, F. T. (2016). Strategic management: concepts (Vol. 2). McGraw-Hill Education.

 

Appendix 1:  Increased usage of cellphone; source

Appendix 2: political lobbying budget at Apple