Analysis of Apple and Deming`s 14Points for Management
History, Development, and Growth of Apple Company
Previously acknowledged as Apple Computer Inc, Apple Inc is an American multinational company with headquarters in California at a place called Cupertino. The company is involved in designing, developing and selling consumer electronics, personal computers and software. It is best known for Mac computers, iPhone smartphone, iPod music player and iPad tablet computer. The company was cofounded in 1976 on April Fools` Day by Jobs and Wozniak, both college dropouts. It was founded on a basement garage. Due to fear of financial ruin, the company incorporated a third member, Ronald Wayne who relinquished his ten percent stake within two weeks after joining for approximately $800. The first product to be produced by this company was Apple 1 in that very year. Apple I was a kit computer with restricted appeal. A year later, Apple II was released. This was the first personal computer designed for the mass and it came with an attractive low-slung case complete with a keyboard similar to the modern day one, power supply and capability of color graphics. This was followed by Apple Disk II in 1978. This was an external storage disk. In 1990, the company went public in 1980 and after IBM introduced the PC, it began developing the Mac, which was introduced in 1984. The consistent theme with the products produced by the company is that they are extremely expensive. All through the history, Microsoft posed critical threat to Apple Inc.
The development of the company is often described in the context of the manner in which it made new-product market decisions, and how it developed and chose functional competencies to pursue. As it is evident throughout the history, it is one person who comes with a new product idea and then confirms its viability and its feasibility with the top members of the company. Among the feasibility aspects which the top team must take into account is environment friendliness and possibly the unmet needs. Once the top management approves, a trial project is initiated and upon completion, it is reviewed and where the product is deemed appropriate and unique, it is developed.
With regard to growth, it has been acknowledged that Apple does this by entering into new businesses and shifts in its main lines of business. Apple`s entry into new lines of business is purely strategic as it starts with the process of intensified research and development. Through this, it is able to tap into new opportunities and then develop products to take advantage. Regarding the shifting of business lines, Apple does this with a very cautious approach. It usually emphasize on the product that becomes widely accepted in the market and which beat competitors by far. However, it still maintains other lines of businesses but on low profiles.
Analysis of the internal and external environments
Based on the above profile, I tis evident that the company depicts indispensable strengths and weaknesses. Foremost, the products that the company has produced all along are high-edge products characterized by sophisticated technologies. Since its onset, it has been producing unique products and these include Mac, iPhone, iPod and iPad among others.
Besides this, the company has a very strong and hugely funded and staffed research and development. The company has integrated this as a key new product decision and it has been acknowledged as the reason behind Apple`s prevalence as a market leader in its lines of business. With such a level of finding and staffing, it follows that the research and development aspect is able to surface a great deal of benefits for the company.
A further strength exists in large brand portfolio. Since it was introduced, the company has been producing products one after another. Today, the company has a range of products in different lines of businesses, which include Personal Computers, handsets, Operating System and iPadstablets among others.
Though they might not be appropriately covered in the above historical, product development and growth profile, one of the persistent weaknesses is the price attached to the products of this company. However justified, the products released by the company are very expensive when related to other products from competitors. This is not only with reference to the historical products but to the present day Apple products. For instance, a price of $666 was attached to Apple I while a modern day iPad cost $1000.
A further weakness is the persistent defects of new products. This problem is especially with today`s products such as iPods and iPhones. Some of the models that the company released had clear faults. This showed a flaw in the production process of the company and it is indeed detrimental citing the reputation and the sales of the company.
Presently, there is an extremely high demand for high end products such as iPads and iPhones. With such a demand, it means that the sales will increase the Apple market share in the tablet market. Additionally, if where these products move at a faster rate as compared to those of the competitors, the end result is a significant rise in competitive advantage for the company.
The current plans are that soon, there will be an iTV launch. This is an opportunity in that it will not only increase to the brand portfolio but it will lead to a new market and at the same time increase the sales revenues for the company and ultimately, the overall profits.
The most significant threat is competition that other company poses. A note has especially been made on the competition among Operating systems. With regard to Personal computers, Mac OS is highly threatened by Microsoft OS from Microsoft Company. With regard to smart phone Operating System, the iPhone Operating System is threatened by Android Operating System.
Another threatening feature is the rapid technological change. With such a rate, Apple is put under expansive pressure to release new products faster. Usually, as a result of rapid change in technology, an organization that cannot keep up with competition soon withers. Despite the technological change, Apple is very slow at responding and the only plan for new products is the iTV.
Evaluation of the SWOT analysis
The identified strengths are very essential as they provide a platform for the company to seize the prevailing opportunities, curb weaknesses and contain the threats. Foremost, due to the fact that the company entails high end products such as iPad and iPods, it means that Apple will blossom in the tablet market and as a result, it will achieve an attractive market share and this implies superior competitive advantage. Additionally, the intensive, highly funded and staffed research development will help the company realize innovation plans and at the same time help curb certain weaknesses and threats. For instance, it was through research and development that the company came up with iTv and this will set the company in a platform to build its brand portfolio and increase its sales and ultimately competitive advantage. In addition to this, through research and development, it will be able to contain competition. It will be able to get ideas on how the competitors especially with Android and Microsoft Operating Systems are doing and thus resorting into an idea that will see Apple do things differently and thus restoring its competitive advantage. Moreover, through the research and development, the company will be able to look into the defects and rejection of associated with its products based on prices and seek ways to improve in order to protect the reputation and build on the confidence of the customers.
At present, Keller (2010) indicates that though it is still in a competitive position, the strength attached to it has been eroded vastly. One of the major reasons for this is inadequate responsiveness to technological change and the ever growing competition from other companies in virtually every line of business Apple is engaged in. Moreover, as Keller (2010) identifies, in the short term, the company will be able to pursue its current business or corporate-level strategy profitably. However, given the prevalent dynamics will continue and become rapid in future, it will not be able to do so.
Analysis of Apple`s corporate-level strategy
Apple`s mission statement states that the company is committed towards respecting the environment, health, as well as, the safety of its employees, customers, in addition to, global communities in which it operate. Additionally, the statement indicates that the company acknowledges that through sound environmental, health and safety management practices into every business aspect, it follows that the company will be able to offer technologically innovative services and products while at the same time conserving and enhancing resources especially for generations to come going into the future. Besides the mission, the company has precisely stated goal not to make money but good products instead.
A further element of corporate strategy is the line of businesses and the nature of subsidiaries and acquisitions. With regard to line of businesses, Apple divides its own product lines into iPhone, Mac, iPad, iTunes, Services, Accessories and software. With these product lines, it means that the company has three business lines Computer hardware and software mobile devices and the iTune store, which is a form of online line of a business.
Evidently, Apple expands through acquisitions. Ten years after the company was formed, it started acquiring other related companies and the first victim was Network Innovations, which operated in the Software business line in 1988. Another notable acquisition was in 2002 when it acquired Emagic, which is a music production software, and in 2012 when it acquired AuthenTec, which used to deal in PC and Mobile security products. Since 1988, the company has acquired 48 different companies each from a different line of business. However, the company does not emphasize on working with subsidiaries as it has FileMaker Inc., Anobit and Braeburn Capital as the only ones.
As it has been identified, the company has three lines of businesses. As Keller (2010) indicates, these businesses usually exchange resources. For instances, the PC hardware and software line of business share close relationships with the mobile line of business in that some of the software used in the PC business are related to the mobile phone business and then modified to fit the line of business. In addition, some of the PC hardware is compatible with the mobile phone business. Moreover, the iTunes line of business exchanges resources with the other two lines in that one can download the iTune software into the PCs and iPhones however at a premium. This synergy has been perceived as a very integral aspect as it increases the desirability of Apple products from all lines and this not only promotes sales but ensures that customers are able to access all the three business lines. This creates awareness of the business lines among customers.
.Analysis of business-level strategy
As it has been established earlier on, the company is a multi-business company. While each business ha sown business level strategy, the generic strategy is focus. The company usually focuses on producing the best products, on innovation, and on making improvements to its existing products. Moreover, as Keller (2010) puts it, Apple Inc. usesthe focus differentiation strategy and this is particularly through establishing products that are not only exclusive but also pretty and rather expensive.
Much focus is put on aligning the business and the company`s marketing strategy with development of products. Indeed, in relation to its competitors, Apple is far much better and this is a significant advantage. The target market of the company is those individuals with the ability and the will to pay more for products with superior user experience and those who like having fun with technological advancements, music enthusiastic and those who work with media and design. The company focus on innovation to satisfy the needs of these people. While this is so, much criticisms have been directed to the company where is argued that the business level strategy is not adequate and is discriminatory in nature it tends to ignore the average and low income markets. To exploit them, it is necessary to come up with products that suit these populations in terms of prices or affordability. Therefore, the company has an opportunity to pursue both a low-cost and a differentiation strategy simultaneously.
Analysis of the structure and control systems
Due to the fact that the business has three different business and product lines, it follows that a matrix structure is used. As such, the organization combines both functional and divisional chains of commands in a grid such that there are two forms of command structures vertical and horizontal. According to Keller (2010), a matrix structure is useful when a strong focus not only on functional bust also divisional dimensions needs to process information and coordinate activities in a prompt manner. Additionally, the researcher confirms that the structure is more suitable for project oriented companies and given that this is the nature of Apple, the adopted structure is suitable.
In order to manage its operations, it has been acknowledged that to a large extent, Apple`s control systems are adequate. Among the integral features of the system is comprehensibility, economic feasibility, availability of information whenever needed, accuracy, acceptance by the company employees and functioning harmoniously within the existing processes and not bottlenecking the operations. However, research has shown that after the decline in its market share and competitive advantage, major conflicts have been prevailed and this has caused diversion of focus from critical points. This has fueled the loss of market share even further.
Basically, it can be said that Apple is on the right track in terms of its corporate and business level strategies. However, it has been noted that there are several weaknesses and threats subjected to the company. To contain these weaknesses and threats, the company will have to enhance its research and development. As such, it is only through this that it can be able to determine the cause of the fading market share and how to fend off competition.
Additionally, it was noted that the company`s adopted controls system are subjected to discrepancies, which in turn cause damaging effects to the overall growth and competitive status. It was noted the at the company does not put emphasis on critical point and this has been due to inappropriate rewarding of managers. It is recommended that the company appreciates its managers by increasing their rewards and attempting to refocus on the critical points.
Keller, W.(2010).Apple, Inc: Strategic Analysis of a Global Powerhouse. London, UK: John Wiley and Sons.
Analysis of Apple and Deming`s 14Points for Management