Apple Strategic Analysis Paper essay

Introduction

In 1976, the apple company was established as a company of computers. In the recent past, the company has experienced a complex expansion that not only deals in computers but much more. The apple company detached the barricade with the iPod; as a result, it became the dominant leader of music player market. In 2007, apple joined the phone manufacturing with the widely successful I Phon. this company is a company of consumer goods which makes it require a proper understanding o its consumers n and products when evaluating the company`s value (Eric, 2008). Apple experiences competition with other companies. Apple is well-known for its exceptional reputation in the industry of consumer electronics because it is supple from its viewpoint of inclusive artistic plan to its typical.

The apple chain of stores operates more than 150 worldwide branches, where the software and devices are serviced and sold. Apple does not supply software for Microsoft windows operating system, due to its Quick time connectivity suite of iTunes and media player for the iPod. Most takings of Apple’s software draw closer in form of potential software for the OS-X operating system exclusive to Macintosh computers of Apple. Today the main source of revenue in the Apple’s company is from the iPod media player. I Phone, which was launched recently, anticipated to outperform is production allowance, as a result, making the appliance expensive and exclusive

History of Apple Company

Apple computer is majorly responsible for the massive development of private industry. His company manufactures, designs, and markets software, computers and peripherals concentrating on lower cost that are designed uniquely computers like power Macintosh models and IMAC. Apple was established by Steve Wozniak, in April 1976 and Steve jobs both dropouts in college (Eric, 2008). They began their partnership some years back a self-taught and talented engineer, initiated building of boxes that made him able to make phone calls at long distance for free. In1976, Wozniak was making another box- the apple I computer without power supply or keyboard for a hobbyist club of computer. Wozniak and job sold their most precious property two calculators and a van amounting to $1,300 in order o start a company.50 computers were ordered by a local retailer which were built in the garage owned by job.

Eventually, they sold 200to computer hobbyist in the bay area of San Francisco for$666 each. And Wozniak started top w3ork on Apple II later that summer, in order to appeal a larger market than computer hobbyists. A local enthusiast of computer was hired by job to design software and assemble circuit boards. Ancient microcomputers ordinarily had been housed by metal boxes. Jobs instead planned to use modular beige plastic container which is more attractive, to house Apple II.

In order to come up with a larger company, Job consulted an electronic engineer who had retired; mike Markkula a former marketer for Intel co-operations. Later Markkula bought a third of the company shares .Jobs, with the help of Markkul established their business plan and later, in 1977mike Scott was hired as the president. In his engineering capacity, Wozniak worked full time for apple. Job recruited Regis McKenna to devise strategy for advertising the company. McKenna designed the emblem of the apple company and commenced with the advertisement.

The apple computers were the earliest microcomputers to use tint graphics with a small screen set at the screen. In 1979, apple launched the apple II+ which had more memory then Apple II and a system that has an easier start up and the first printer of the company. In December 1980, Apple went open it was presenting 6 million shares at $22 each one sold away within minutes. In September 1980, Apple III was released and was received well. However, most units attested to be faulty; they had to halt their production and fixed the problem. Despite the hurdles they had to move on.

The company’s overview

Apple incorporated on january3, 1977, manufactures, markets, and designs a variety of personal computers, media devices, and mobile communication. They also sell a variety of related software, peripherals, networking solution, services and third party digital application and content. The company globally sells its products through, online stores, retail stores and third party cellular network carrier’s retailers and wholesalers. The company has designed a variety of products, programs and services to focus on the customer education needs and programs of individual laptop (Eric, 2008). The apple manufactures high definition display of Apple cinema and sells a variety of products which are apple branded including storage devices, printers, computer memory, still cameras and other computing supplies and products.

The company also sells its software and hardware to customers in creative market, government and enterprise. This company conducts its operation in five segments; retail, Japan, Asia-pacific Europe and America. It offers a variety of personal computing products like portable computers and desktop, third party hardware products, and peripherals. The desktop computers of the company include; McMinn, McPro and iMac. The iMac is a design of all in one that incorporates memory, graphics card, processor, display and in a single enclosure, other components. The McMinn is a desktop computer in a compact enclosure. One of the main focuses of the company is integration delivery with internet access throughout the services and products of the company. The web browser version of the company, which is well-matched with Macs and computers that are windows based, is safari 5.mobileme on the other hand is an internet service, subscribed annually and delivers contacts, calendars and e-mails from and to native applications on window-based computers, iPod and Macs

Strengths and Weaknesses (HIFORMS)

Apple is continuously listed as one of the most admired companies by a variety of publications. This is an attribute to its strong focus on research and development. Innovative products such as the IMac, IPod, IPhone have changed the computer, music, and mobile industries. As competitors work on imitating Apple products, Apple is one step ahead-working on the next best thing. Its strong brand recognition is what gives it its edge over competitors. Consumers expect great things from the company and for the most part are rarely disappointed. Over the past 3 years Apples net income has increased from $4.8B in 2008 to $14B in 2010. However, fierce competition in the smart phone and tablet industry is affecting Apples market share. Google in particular is winning over many consumers with its Android operating system. Patent infringement suits are also a concern as an unfavorable decision can have a major financial impact on the company. For this reason Apple can’t rely on innovation and brand recognition alone for competitive advantages. Discussed below are different areas (HIFORMS) of Apple’s company and whether it’s a current strength or a weakness.

Human Resources

  • Weakness: Although Apple is knows to be a top notch tech company and one of the best tech companies to work for, it still doesn’t measure up to competitors like Google and Microsoft. It’s no secret that Apple’s perks fall well short of those of Google and Microsoft. Concerns of employees are that it’s too corporate, employees work long hours, and pay is low compared to other tech companies. Also opinions on CEO Steve Jobs vary from a charismatic leader to someone who is very demanding and hard to please.

Infrastructure/Information Systems

  • Strength: Without a strong infrastructure, Apple wouldn’t be in the position it is today. Its infrastructure consists of strong leadership (Steve Jobs), R&D (IPod, IPhone, IPad), and brand recognition (marketing). Even though Apples core is developing new cool products to the market, its leadership is what takes the company to another level. As long as Steve Jobs is in place, Apple is in great hands. Look no further than the IPod + ITunes relationship, genius! He also turned the company around from near bankruptcy in the 1990’s to one of the most admired companies today.

Finance

  • Strength: The Company’s growth over the past couple of years is direct result of its successful products it has introduced to the market. Apple’s current market cap is $337B (five times its book value!). Apples earnings and financial position allows it to invest more into research and development but fierce competition in the smart phone market is limiting profits and market share. However, the smart phone industry is one of the fastest growing industries and Apple with only 14% of the market, the room for growth is enormous.

Operations

  • Strength: The introduction of an Apple product has become a major event. Lots of buzz and speculation usually precedes an Apple announcement. The introduction of any new product is usually introduced by CEO Steve Jobs who many people see as a visionary. A major reason there is so much buzz around an Apple announcement is because the general public usually has no idea of what is being introduced. This is a compliment of the company’s tight lipped secret policy. The one negative that irks people the most is the stubbornness of the company to not make their products compatible with others. For this reason, many people don’t even consider an Apple product because it can’t be used with all software applications. At some point Apple must learn to be more flexible or they might risk losing customers to competitor like Google as it did in the early 90’s with IBM.

Research & Development

  • Strength: Apple is an innovative company. It success is dependent on introducing “the next best thing” to the market. Technology is evolving at a pace greater than ever seen before and if R&D was to ever slow down, Apple will be left behind. Due to Apples high focus on R&D, it is the trend setter when it comes to tech products. While Apple is busy creating, everyone else is busy following. However, like all new products introduced to the market, there are setbacks (glitches). To their credit Apple has listen and acknowledged when something was wrong and usually fixed the issue at hand. Also, next generation products such as the IPhone 2, 3, and 4 have all addressed problems previous models incurred.

Marketing & Sales

  • Strength: Plain and simple, Apple’s marketing is what drives its earnings. Sure they make a neat product, but somebody has to make it cool. Apple has created a huge brand image that consists of quality, design, and entertainment. The main objective of marketing is to convince more people to buy a product that they don’t necessarily need. How many people can honestly say they don’t need an IPhone today? Not many which means Apple has done its job. Also, its Retail stores have been very successful. Apples retail stores are specialized for Apple products only allowing users to have access to the actual product before purchasing. This worked well since Apple products are known to be very cool in design and having hands on access increased a consumers desire to purchase.

Service

  • Weakness: Although, exceptional customer service, Apple has to rely on other companies for full use of their products. For example, an IPhone can only be as good as AT&T’s and Verizon’s networks allow it to be. One of the main concerns many consumers have is that ATT’s and Verizon’s networks weren’t as reliable as other networks, therefore purchasing an IPhone is not an option for them. Unlike Google where users can go to any network provider, Apple relies on only two networks. This frustrates many users who would like to purchase an IPhone but don’t because of the service providers they are limited to.

External Analysis DEPMTS

Demographic Opportunities and Threats

  • Opportunities: The U.S. population as well as the global population as a whole is growing which provides a terrific opportunity for consumer electronic companies to sell their products to more people (Day 2010). It has been shown statistically that the use of consumer electronics is on the rise as well. In 2050, the population of the United States will be approximately 392,000,000 people (Day 2010). The world population by 2050 will be approximately 9.1 billion people (UN 2005) With electronics being an integral part of many peoples’ lives and this is true now for much of the nonwestern world as well, the demand for such products will increase also. Those companies that effectively meet the needs of this growing population stand to make a great deal of money. Within this population, 27% of Internet users own a digital media player (MacDaily 2006). 37% of these Internet users are between the ages of 18-34 (MacDaily 2006). Women are also increasing in number as users of tablet PCs (Salkever 2010). The 18-34 age bracket represents a large percentage of the population that can be effectively targeted by these companies.
  • Threats: People are living longer and therefore the average age is increasing which could pose a potential problem for consumer electronics companies. As I mentioned above, a large percentage of this tech savvy customer base is a young population where the average age is getting older. The average age is increasing with the U.S. population with it reaching 39 by 2050 (Day 2010). While 39 is by no means old, if consumer electronic companies continue to target and wish to associate with a young population to equate their products with being hip and cool then they will become a smaller percentage of the population as a whole. The U.S. population is also becoming more diverse with a rising Asian, Hispanic, and Black influence (Day 2010).  Purchase patterns for electronics could change as a result but only time will tell.

Economic Opportunities and Threats

  • Opportunities: While U.S. economic growth has slowed, there has been tremendous economic growth in emerging markets including India and China which has led to a growing middle class, “A new global middle class is rising up from poverty in emerging economies around the world, providing competition for labor and resources, but also enormous promise for multinationals that tailor products and services to the burgeoning ranks of first-time consumers, according to Wharton faculty and analysts” (Wharton 2008). China and India have economic growth of 9.5% and 6% respectively (Engardio 2006). Increasing affluence within a population leads to an increase in discretionary spending. This includes spending on electronics. Demand in India and China for tablet PCs, smartphones, PCs, music players, etc. has increased.
  • Threats: The U.S. unemployment rate as of June 2011 was 9.2% (Trading 2011). That statistic is quite a significant number that cannot be ignored. With so many people out of work, it is difficult for them to have discretionary spending on luxuries like electronics. The price of education is going up, the price of gas is going up, and the price of goods and services is going up while income is increasing at a slower rate or even going down, “Consumer spending was flat in May, government data showed Monday, as higher gas prices at the pump and a weak labor market made consumers reluctant to open their wallets” (Robb 2011). All of these factors shift consumer spending from luxuries to necessities.

Political Opportunities and Threats

  • Opportunities: With the free trade agreements that exist right now, countries like China are able to accumulate enormous wealth by sending their products to the United State without a tariff. This wealth which was mentioned above has led to a growing middle class in China. Chinese consumers have greater discretionary spending as a result, “Over $2 trillion in discretionary spending will come from China, India, and Indonesia seen over the next 5 years” (Wall 2010). An increase in discretionary spending leads to an increase spending in luxury items like tablet PCs and smartphones for example.
  • ThreatsFree trade agreements have indirectly shifted manufacturing jobs from the United States to countries like China, the Philippines, etc, “The rising trade deficit in manufactured goods accounts for about 58% of the decline in manufacturing employment between 1998 and 2003 and 34% of the decline from 2000 to 2003. This translates into about 1.78 million jobs since 1998 and 935,000 jobs since 2000 that have been lost due to rising net manufactured imports” (Bivens 2004). The unemployment rate reflects this trend and has led to a decrease in discretionary spending for Americans. This could pose a problem for consumer electronic companies in the future if more Americans are unemployed or have their salaries cut and as a result and have to cut back on luxuries like electronics. As a result, sales efforts might have to be targeted overseas.

Mother Earth Opportunities and Threats

  • Opportunities: Electronics can be very helpful if a natural disaster were to occur. People would be trying to use their cell phones or get on the Internet to contact their friends and family to make sure they were alright. This is assuming cell phone towers were not destroyed. They would be using their cell phones for text messaging as well using Facebook as means of communication also, “Social media/networking sites have become a vital tool in the disaster that recently occurred in Japan. Phone services came to a halt, preventing victims from contacting their loved ones. Services such as Facebook, Twitter, Mixi (The largest social networking in Japan) proved more reliable than phone service, becoming a lifeline for people looking to find lost loved ones, tell others they were safe, or send encouraging words” (Hosaka 2011). The Internet would be heavily used to provide information on the magnitude of the disaster. Overall electronic usage would increase.
  • Threats: If access to fresh water becomes even scarcer in the future, then growing middle class populations in poorer countries will care less about purchasing electronics and rather would be using whatever money they had to get water, “Some believe that fresh water will be a critical limiting resource for many regions in the near future. About one-third of the world's population lives in countries that are experiencing water stress. In Asia, where water has always been regarded as an abundant resource, per capita availability declined by 40-60% between 1955 and 1990. Projections suggest that most Asian countries will have severe water problems by the year 2025. Most of Africa historically has been water-poor” (Postel 2006). This point once again reflects the shift from luxury consumption to necessity consumption if this were to occur. Providers of consumer electronics will obviously suffer as a result.

Technological Opportunities and Threats

  • Opportunities: There is a great deal of opportunity for tech companies that are innovative and stay one step ahead of the competition. Introducing the newest product tends to win customer praise and admiration. Those companies that embrace the newest technology and satisfy customer demand could make a great deal of money, “Innovation is the engine of long-term business growth. To generate consistent returns and sustain performance, companies must continually refresh their portfolio of offerings and the business models that drive them.  With so much at stake, innovation can't be a hit-or-miss proposition based on vague prescriptions about fostering creativity” (Johnson 2010). For consumer electronic companies not to pursue being innovative it could have an adverse effect on the organization in the long term. By that we mean the organization might not survive in the long term.
  • Threats: While those organizations that introduce the newest technology could potentially reap huge profits and gain market share, companies that are playing catch up because they didn’t introduce the newest technology could suffer. Customers have a tendency to stay loyal to those tech companies that have a reputation for being innovative rather than copy cats. As we mentioned above, for an organization that is in an industry built on innovation, accepting the status quo could be detrimental for long term success.

Socio-cultural Opportunities and Threats

  • Opportunities: In society, the importance of aesthetics or visual appeal has been growing all over the world. The same holds to be true with regard to the aesthetics of a product. Organizations in the consumer electronics industry are no longer able to get away with providing devices that have functionality but lack aesthetic appeal. The look of a product plays a key role in a consumers desire to purchase the product, “Product design has been recognized as an opportunity for differential advantage in the market place. The appearance of product influence consumer product choice in several ways” (Creusen 2005). Those companies that succeed in providing the look of a product along with the functionality win the customers. Aesthetics plays an integral role in several ways, “A product’s appearance can have aesthetic and symbolic value for consumers, can communicate functional characteristics and give a quality impression, and can communicate ease of use” (Creusen 2005).
  • Threats: Societies around the world might look down on an increasing dependence on electronics as well as the openness of information available with electronics. Some might feel that people are becoming too dependent on these devices and as a result would discourage rather than encourage usage. This societal mentality could discourage demand in the long run.
  • Low Risk of Substitutes: The risk of substitutes is low for organizations in the industry. A tablet PC and a smartphone can be a substitute for a PC in some ways but the chances of it completely replacing one device is highly unlikely to happen. Each device has its own distinctive qualities that are desired by consumers today. Although their power and capabilities will increase over time, we do not see them disappearing any time soon.
  • Low Risk of Entry: The major players in the industry are large organizations that are involved in supplying consumer electronics. This is a direct result of the large capital expenditures to enter and stay in the industry. These large corporations can also benefit from economies of scale to an extent where smaller companies cannot. Economies of scale allow these organizations to increase their profitability and pass those savings onto consumers by lowering prices. As a result, the corporations already in the industry can spend money to aggressively advertise their products.
  • High Risk of Rivalry: Competition in the consumer electronics industry is fierce and as a result the risk of rivalry is high. Large organizations like Apple, Hewlett Packard, Microsoft, and Google are heavily invested in winning customers. Each company is constantly trying to innovate and offer a more advanced product to get customers.
  • High Risk of Buyers: Retailers and consumers can be very price sensitive to purchasing electronics especially during a recession. With retailers, if they do not see much demand because of a lack of consumer spending it would have an adverse effect on organizations in the industry because retail demand would decrease. Consumers can also be very price sensitive especially during a recession where needs are satisfied first before wants. Although organizations in the industry do successfully differentiate their products, economic conditions dictate demand.
  • High Risk of Suppliers: Many organizations in the industry have successfully differentiated their products and can charge a higher price to consumers as a result. As mentioned above, many of the products have really no direct substitutes. Suppliers would not want to lower quality because they could lose current and potential customers, but they would be able to raise price for the reasons mentioned.

KSFs

  • What Do Customers Want? Customers want electronics with the most advanced technology that is also visually appealing. Having only the former or the latter is not enough. It has to be a combination of both. Price point is also important, but consumers have a tendency to pay a premium for quality. Certain brands are synonymous with good performance. Consumers also want more features but offered in a simplified manner.
  • How to Survive the Competition? Successful differentiation is the ticket to stay ahead of the competition. If an organization in the industry does not offer a superior product then they will lose market share to the competition. This holds true for a variety of products ranging from music players to PCs. Also, what the product can do is not enough, what the product looks like and if it has a sleek design to appeal to consumers is very important. Competition is fierce and offering a mediocre product is not enough.

Strategic Analysis

Organizational culture as a competitive advantage

The culture of Apple was designed with the idea in mind that employees will achieve more and work harder if they are not micromanaged.  Apple was among the first organizations in the 1970’s to gain a competitive advantage over their competition by transforming the way that their employees work.

The Apple organization is flat and informal verses formal and tall.  This flat structure allows Apple to move quickly and be very nibble.  Projects have few layers of approval which aids them in getting new and fresh ideas to market quickly.  Apple touts that they offer an environment in which things happen fast, meeting aren’t long and drawn out and their employees are free to make things happen.  Employees are encouraged to collaborate in open spaces and large open rooms. At Apple they believe in innovation that creates an impact, this philosophy encourages employees to look at working at the organization as a calling and not a job.  Over the years Apple has trampled their competition and the organizational structure and unique culture have contributed to significantly to this.

Additionally the Apple culture has a strong work hard and play hard component to it.  Employees work the necessary long hours to get new products and services launched but they also enjoy the cool benefits and rewards that the company offers.  They offer product discounts, wellness programs, an onsite fitness center and even an organic café onsite.  However, working in this environment is not for the faint of heart.  It is demanding and many people have left to work for other less cultish organizations. 

Retaining key talent in the Silicon Valley can be extremely difficult and with deadlines and secrecy being two strong driving forces in the Apple culture it takes individuals that are mentally astute to survive this environment.  Although casual in dress it requires very quick minded, sharp and internally motivated individuals to Think Different at Apple. The culture promotes individuality and focuses on individual achievement for employees.  This can be very counter intuitive given most organizations strongly encourage team work. Below outlines ten areas in which Steve Tobaks, author of “Inside Apples Cult-like Culture” synthesized as key components/lessons of the Apple culture.

  • Empower employees to make a difference
  • Value what’s important, not minute
  • Love and cherish the innovators
  • Do everything important internally
  • Get marketing
  • Control the message
  • Little things make a big difference
  • Don’t make people do things, make them better at doing things
  • When you find something that works, keep doing it
  • Think different

Lastly, CEO of Apple, Steve Jobs has a large impact on the culture of the organization.  Apple was shaped by the visionary leadership of Jobs with everything from marathon Mondays to the style in which he empowered key individuals throughout the company to execute on projects of the utmost importance.  Jobs has been criticized for his autocratic style of leadership.  Often called a tyrant Jobs rules with an iron fist and has been know to be very threatening and intimidating to employees at all levels within the organization. 

It is however, undisputed that under his leadership the company has excelled and Apple is at the top of its game with products spanning from iPad’s, iPhone’s, iCloud’s and iMac’s.  Jobs style of leadership has created an environment that focuses on results and innovation.  There is little tolerance at Apple for mediocrity and with the major focus on output and the production of top notch products and services only the strong survive.  At Apple all employees are on notice that the environment is one of excellence and high achievement.  This has proven to be a strength in the competitive strategy for Apple but can also be viewed as a weakness because the sometimes harsh treatment can lead to lack of retention of key talent.  Apple clearly acknowledges that a large portion of their future success hinges on their ability to continue to recruit, develop and retain key talent in the Silicon Valley at all levels of the organization.  There is no guarantee that they will continue to be a viable employment option for up and coming talent in one of the most competitive markets in the country.

Mission Statement

“The Company is committed to bringing the best user experience to its customers through its innovative hardware, software, peripherals, services and Internet offerings.”

COMPACTS/Mission Statement Analysis

The purpose of a mission statement is to describe what business your organization is in, describe the organizations customer and outline what level of performance should be anticipated.  An organizations mission statement is the step which moves your strategic planning process from the present to the future.  The mission statement must be concise enough to work for today but broad enough to be used in the future.  The mission statement should allow for growth within an organizations products, services and expansion into new markets.  It should not be narrow or constricting.  Fluidity is key!  Additionally, as with all goals the mission statement should be SMART (specific, measurable, achievable, relevant and time-bound).

According to the COMPACTS theory an ideal organizational mission statement includes a customer focus, has an overarching role in society, has a component of morality, is particular, has aspiration, and concise, transmitted and stable.

Customer Focus

In order to be truly effective a mission statement must be customer focused.  Customer focus is an organizations ability to orient it’s self toward satisfying the needs of its customers.  It appears that Apple has acknowledged it’s customers in their mission statement and in their business.  Presently, Apple is one of the world’s super powers in the technology arena.  By creating a wide range of products and services such as Mac computers, iPhone, iPad, iPod, Apple TV, Zserve and iCloud the company has propelled it’s self to the forefront of most consumers minds.

Apple historically has created products that exceed the expectations of their customers.  The business model of the company is set up to encourage a customer focus.  In lieu of a brand expansion and a world wide takeover Apple has decided to focus on the following three areas pertaining to its customers; customer experience, application of proprietary technology to enhance the customer experience and crowd sourcing or open-source collaboration (Gerson Lehman Group, 2009).

At its infancy the iPhone was conceptually a different way to look at a cell phone carrier/cell phone manufacturer relationship.  Apple had a very special way that they wanted to do business and it took years before the AT&T deal was solidified.  It is important for Apple to continue to control their own destiny.  In doing so with AT&T they have been able to continue to find ways to continue to offer better and more innovative offerings to their customers.

Apple has single handedly redefined how its customers use technology.  They obviously did not create the needs that their customers have instead they redesigned how their customers needs can be fulfilled.  An example is the full internet browsing that is available on the iPhone verses the limited browsing that is available on other phones like the BlackBerry Curve.  Apple saw an opportunity to create something that would better suit the needs of consumers in the market and they ran with it.  In conjunction with the iPhone the invention of the Apple Store allowed Apple to continue to offer greatness to their customers but it also allows their third party suppliers to tap into the nitche that they have carved out.  It is reported that Apple gets 30% of revenue of every app created (Gerson Lehman Group, 2009).

As of September 25, 2010 Apple has opened a total of 317 retail stores (Gerson Lehman Group, 2009).  Apple determined that the best way to control their customer’s experience is to expand their retail store division.  The stores employees are very seasoned professionals that have a high level of product knowledge and this offers a way to enhance the presentation and marketing of the company’s products and services.

Overarching

Apple’s mission statement neglects to include the COMPACTS overarching component.  Overarching is the overview of the firm’s impact in society.  Although the company does not address this specifically in their mission statement it is at the forefront of the organizations mind.  Apple views their position in society as one of an educator and innovator.  Apple historically has focused on the use of technology in education and has focused on delivering tools to help educators teach students to lean (Gerson Lehman Group, 2009).  By investing millions into the lives of students all over the world Apple has been able to use technology to win over the loyalty of those not yet older enough to work.  The Apple.com website has an entire section devoted to Apple in Education.  Although on the surface it appears that Apple is enhancing our society by giving back selfishly they have also created a grassroots way to expose the younger generations to their products and create little Apple soldiers.

Moral

An organizational mission statement that includes morality components addresses an organizations economic, ethical, legal or philanthropic responsibility.  In April 2010 Jobs was quoted saying, “that its Apple’s moral responsibility to protect everyone from porn” (Hruska, 2010).  The availability of porn on the internet is at an all time high.  However, Apple has taken the stance that they want to keep porn out of the hands of our youth.  The end result is a lack of access to applications that are porn related on the App Store.  Some view the superpower as the morality police but the reality is that they have made a business decision not to include apps with porn and this breaks no laws.

According to Apple.com in 2009 Apple estimated they were responsible for 9.6 million metric tons of greenhouse gas emission.  This number is staggering and has since prompted Apple to reevaluate their “total footprint”.  Apple breaks their “total footprint” into manufacturing, transportation, product use, recycling and facilities components.  This comprehensive life cycle analysis is what Apple uses to determine what emissions are generated and where they come from.  In order to reduce their impact on the environment Apple is forced to improve their products including packaging through to the components that make up the products. Because of the reach of power of the Apple brand similar to that of Wal-Mart they are able to also force their suppliers to follow suit.

Apple touts programs such as the Apple Recycling Program and Supplier Responsibility.  These programs and others are ways in which Apple can take part in being socially responsible for the community around them.  Apple dedicates a significant portion of their website to their dedication to environmental considerations.  They are aware of how just by making small changes in the way that they do things that can impact both the environment and the way that consumers view them.

According to Wikipedia in 2010 Apple filed more than 350 cases with the US Trademark office alone.  Apple is no stranger to litigation and most recently Apple has been in the media for its well publicized lawsuit against the Korean company Samsung.  Apple alleges that Samsungs Galaxy line of mobile phones and the Galaxy Tab computer tablet have copied their technology, interfaces and product packaging.  Apple can be viewed as the Wal-Mart of the information technology world.  They have a lot of muscle and leverage.  In some areas they have blocked all entrants to certain markets.  Does this create a fair market for competition?  Likely not but they are still willing to go after anyone that even appears like they are going to threaten their territory.  This territorial approach and opposition to playing nice in the sandbox has proved successful but yet very controversial.

Particular

The Apple mission statement is specific to the firm and its activities.  It is however generic and does leave the reader confused about what line of business that the company is in. Apple is an organization that is very complex and they have lots of products and services that all lead ultimately back to information technology.  They create software, hardware, technology and services. Creating a statement to encompass all areas of focus would probably be daunting.  Conversely, Apple does a great job of identifying what their products and services are and communicating them through other channels.  Although it is unclear in their mission statement who they, they are still succeeding in the market place and have clearly made a space for themselves in the market place.

Aspirational

Good mission statements have an element of stretch to them.  Apple has identified that they are “committed to bringing the best user experience…”  According to dictionary.com the word best means, “most excellently or suitably; in or to the highest degree; most fully.”  It can be concluded that aiming to be the best is definitely a stretch goal.  Apple has proven that they want to continue to offer innovative, cutting edge, unique and high quality products and services to their customers.  Although they have taken heat recently for what some call too much of a rush to get products to market.  It appears that apart of their strategy is to get products to market quickly even if it means sacrificing quality.

Concise, Transmitted & Stable

The COMPACTS model says that a good mission statement is concise and clear. Apple’s mission statement is direct and to the point.  Apples mission statement is short and sweet however extremely difficult to find.  It is not located on the Apple website it is however buried in their 10-K/Annual Report and even then it is not easily identifiable. A well transmitted mission statement would be clearly accessible and easily located for all shareholders.  Lastly, it is stable and unchanging.  Stability means that there will likely be little change to it because of how generic it is.  This allows longevity in the use of it.

Business Strategy

“The Company’s business strategy leverages its unique ability to design and develop its own operating systems, hardware, application software and services to provide its customers new products and solutions with superior ease-of-use, seamless integration, and innovative industrial design.”

Business Level Strategy Outlined (Goals)

The business strategy of Apple includes its ability to design and develop its own operating systems, hardware, application software; invest in research and development; the enhancement of innovative products and technologies; the building of a robust platform for the discovery and delivery of third-party digital content and applications through the iTunes store; a community for the development of third-party software and hardware products and digital content; expansion of distribution to effectively reach more customers and provide them with a high quality sales and sales support experience ( Apple, 2010).  Apple is aware of and has acknowledged that in order to compete successfully in today’s market they must continue to introduce new products and technology to the market place.

Research and Development

Organizations that truly embrace the needs of their customers create products and services that their customers want.  In order to determine what these products are companies invest resources in research and development.  In 2010 Microsoft invested over 8 billion in research and development compared to the almost 2 billion that Apple invested. Apple’s total research and development expense was $1.8 billion, $1.3 billion and $1.1 billion in 2010, 2009 and 2008 respectively (Apple, 2010). In recent years the trend has been for companies to invest more heavily in product support and less in innovation. In 2010 Microsoft was granted 3,094 patents compared to Apples 563 (Gralla, 2011).  Microsoft however still lags behind Apple when it comes to innovation.  Microsoft invests more dollars and clearly has more patents being granted however they are viewed as far less superior when it comes to innovation and outside of the box thinking.

In order for Apple to stay ahead of their competition they must continue to invest resources in developing new products in addition to enhancing their old ones.  Apple admittedly must increase the resources allocated to research and development and marketing in order to maintain and expand its position in the market place. They have a loyal following that is built upon the premise of a new toy coming out every so often to replace older outdated ones.  However, more importantly they must continue to stay in tune with the ever so changing market and the needs of their customers. 

Apple Strategic Analysis Paper essay

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