MGMT436 Strategic Management : Techniques for Enterprise Risk Manageme

Product differentiation has helped in the growth of Apple. The company has a wide variety of products ranging from Smartphone, PC, software and music download services. By having a large product portfolio the company to increase its revenue streams hence increasing profitability. Product differentiation also helps in spreading risk (Osterwalder & Pigneur,2013).

Another reason for the success of Apple is its highly trained, talented, experienced and dedicated staff. The company is known to have staff who are very talented and experienced when it comes to matters of technology. The company also has very low employee turnover because of its favorable reward criteria and employee development programs. These together with many factors contribute greatly to the employee motivation hence increasing the productivity of each employee. This translates to overall success for the company. The companies workforce has grown rapidly over the last five years due to expansion in operations of the company as shown in the graph below.

Fig 3: Graph showing growth in size of Apple workforce

The focus on consumer needs has helped the company grow to a very great extent. Apple develops its entire product after it has conducted a thorough market research to identify gaps in the market and the needs of the consumers. The company then designs and develops a product that fulfills the needs of the customers and therefore, when the product is introduced into the market, the company does not have to create demand since it already exists (Drucker & Maciariello, 2007). This ensures that consumers fall in love with the product and have to acquire it.

Product positioning has been very crucial to the success of Apple. The company portrays itself as selling premium quality products that are long lasting and easy to use. This has many consumers to desire to be associated with the companies` products and its brand. The company, therefore, Is able to set prices for its products very high and still generate very high sales for its products. The company only produces products that are unique of high quality and high prices and therefore becoming the market leader among consumers with high levels of income (Johnson, Scholes,& Whittington,2008).

Another major reason why Apple triumphed in the market is that its products are easy to use compared to those of competitors. The founder and former CEO of the company Steve Jobs always emphasized the need for simplicity. Simplicity in the user interface is the guide to both software and hardware engineers and therefore, the company has been able to produce products that are user-friendly and therefore encouraging more consumers to buy the products.

Apple offers great customer service and in-store experiences hence building on customer loyalty. Apple has opened product stores in various regions where customers can buy as well as get services for products bought in the past. The employees in these stores know the company well and have a deep understanding of how the product works. Therefore, the quality of services offered by Apple is exceptional and very professional. This has helped in attracting new customers as well as retaining the existing customer base hence repeated and continuous success for the company.

The management of the company is composed of experts in the technology industry who are experienced and highly motivated. Led by the late Steve Jobs, the company was started from scratch and built into a multi-billion dollar company by the time he died in 2011. The founder of the company had a clear vision for the firm which he impacted on his employees who took over the leadership of the company when he died. He also built the company upon strong core values which have helped in maintaining stability and brand image for a long period of time (Mun, 2016). Therefore, the leadership of the company has helped in building on each short-term success which has helped the company to grow further every year.

Analysis of Apple strategic capabilities

The core competencies that help in giving Apple a competitive advantage over its rivals is the value chain of the company. The company has a very well organized, efficient and effective value chain. An analysis of the value chain of the company is, therefore, important in determining its strategic capabilities.

Apple works with very many suppliers globally. The company has a complex supply chain. Its supplier policy requires the company to pay suppliers within 150 days. The CEO of the company encourages suppliers to compete among themselves. The number of suppliers for the company has reduced since Tim Cook took over as CEO in the year 2011. The source of strategic capabilities when it comes to the inbound logistics of Apple is the large scale nature of the company which helps the company to enjoy economies of scale. The company also has bargaining power over suppliers hence its able to obtain supplies at very low prices. This eventually results in the competitive advantage of reducing the cost of production. Apple operations are divided geographically into five segments which include: Americas, Europe, China, Japan, Rest of Asian Pacific (Mun, 2016). The company outsources its manufacturing activities to countries where the cost of factors of production is low. The majority of Apples` products are manufactured in Asia. This strategic capability gives the company the cost advantage in the manufacturing process. The outbound logistics of Apple involves the distribution of final goods that are ready for consumption. The company has Apple stores where consumers can visit and buy products. The company also sells its products through E-commerce which is cost effective. The E-commerce sales by Apple were in excess of US$12 billion in the year 2016. The operations of the company in Asia has given the company a strategic capability since the cost of outbound logistic is low since manufacturing takes place in this geographical area. This results to lower prices and hence increasing the number of customers. The customer services are exceptional. The services are undertaken in three stages including; pre-purchase, during purchase and post-purchase. The company gives a lot of attention to all of them. The sales assistants of the company are polite, highly trained and savvy young individuals who are able to bond well with customers. This helps to create a sense of worth for customer hence creating customer loyalty.

VRIN analysis of Apple

VRIN analysis is a technique used to evaluate the core competencies and strengths of a company that differentiates it from other players in the industry.

Value

The aim of Apple is to maximize the value that customers get from every single product. This is achieved by incorporating various functions and features in one product in order to ensure customers get value for what they buy. An example is the iPad which users can use to send text messages, make calls, watch movies and take pictures and videos.

Rarity

The products that Apple produces are not rare since there are very many competitors producing closely related products. Apple, however, has unique premium products which are of very high quality and boast high performance. This differentiation makes Apple a unique company and hence highly successful ( Schwenker& Wulf, 2013).

Imitability

The products by Apple are not imitable easily. This is because of the unique level of technology and precision used when making these products. Different companies may try manipulating Apples technology and products, it is very difficult to match the standards set by the company.

Non-substitutable

The products of Apple can be replaced by other products which serve the same purpose. However, the strength of Apple brand cannot be substituted since it comes with a sense of class and luxury which no competitor can offer. This helps the company to maintain its consumer base and to attract more customers (Kaliannan, & Ponnusamy, 2014)

The innovative and talented workforce by Apple helps the company to keep innovating and developing products. This helps in generating the competitive advantage of being the market leader in terms of innovation and product differentiation. This is very important especially in the technology industry in which Apple is operating. Firms compete on the level of technology and ability to meet customer needs. It, therefore, means that a company like Apple which has been able to nurture and develop unique teams of engineers has a competitive advantage over rivals since it is in a better position to come up with a unique new product(Mulvey, Kupersmith & McGoey,2013).

Apple is able to develop both hardware and software products unlike many of its rivals. This, therefore, means that the company does not depend much on other technology companies. This helps the company to save on cost that would have been incurred in buying software from other companies. The licensing of software by the company also generates extra revenue for the company hence giving Apple a competitive edge over rivals in terms of cost as well as revenue streams.

Role of Leadership in the success of Apple

Leadership played and still plays a very strategic role in the growth and success of Apple. The company has been led by distinguished and respected leaders with the late Steve Jobs being at the helm of the company from scratch to period in which the company experienced highest levels of growth. Tim Cook took over as the CEO of Apple after the death of Steve Jobs and he too has provided exemplary leadership to the company(O'Grady, 2009).

Steve levy once stated that Steve Jobs was the most passionate leader ever and he was an unrivaled motivational force by himself. This statement simply defines the man who led Apple into the giant it is today. The leadership of Steve was defined with his personality, character traits as well as his hobbies and passion. Steve came back to Apple in the year 1996 when the company was experiencing financial troubles and was almost becoming bankrupt(Gong, 2013). Steve jobs were able to turnaround the fortunes of the company within six months. Steve was known to be a very strict and focused leader who was very keen on details. He was not viewed as a relationship-oriented leader and at times did not have a great relationship with his employees. However, Steve was able to motivate employees of the company because he shared his ideas and vision of the company with employees and convinced them of the relatively of his vision. The leadership theory ofmodern trait theory applied to the leadership that the former CEO provided to the company. Steve had individual leadership skills which cannot be taught to anyone. Some of the leadership traits that Steve had include;intelligence,extroversion,openness , self efficacy and experience. The trait theory of leadership also applies perfectly for the  leadership of Apple that has helped the company become so successful. The contingency theory of leadership argues that some traits of leadership are common for all leaders, persons who are good leaders in one situation may not be good leaders in another situation. This theory therefore argues that the interaction between the individual traits and the prevailing situation determine the kind of leadership to be offered.The leadership of both Steve jobs and Steve was able to organize and assemble employees into small teams which would work effectively and produce the desired results. Steve Jobs can, therefore, be defined as a task oriented leader. His ability to strike deals also played a great role in the success of Apple. He successfully negotiated, many deals such as with Microsoft (Mulvey, Kupersmith& McGoey, 2013). The current CEO of Apple Tom Cook has also been very instrumental in building on the success of the company since he took over leadership of the company in the year 2011. the leadership style of Tom Cook can be described as democratic. The leadership style of Tom Cook is directly opposite of that of Steve Jobs but both styles have produced tremendous success for the company.Cook is known to trust his juniors and to delegate a lot unlike his predecessor who was autocratic and imposing. Cook is involved in societal issues and is more close to the employees more than Steve was. The leadership theories that apply in this case is the behavioral traits leadership theory. This theory takes into consideration the effects of reward and punishment on the behavior of an individual. The full range theory of leadership is also relevant in this regard.

The leadership of Steve jobs impacted greatly on the organizational culture of the company. The innovation culture of the company was anchored in the company because of Jobs` leadership. The culture of high performance and belief in quality and simplicity has helped to guide the culture of the organization more than five years after his death. The theories of organizational culture that apply in how the leadership of Apple influenced the culture of the organization is the critical-interpretivism which emphasis the network of shared values shared by working together for a long period of time. The leadership of Apple has been very effective in establishing a strong culture in the organization through their behavior and principles that they put together to govern the organization. The employees of the company respond positively to a certain stimuli because of their relationship to the values of the organization.The current leadership of Apple is also impacting the culture of the organization with their leadership traits and beliefs. Cook has been able to influence the employees of the company positively and has been able to provide the required advice that has helped the company to continue being innovative and the leader in quality of everything it produces. The launch of products such as Apple watch and Apple TV shows how the organizational culture of innovation has continued to thrive under Tom Cook. The leadership of Apple used management models in making sure that the organization becomes successful. The contingency theory of management is widely applied by managers of the company. The theory argues that decisions are made based on the situation at hand and no single model solves all the management problems.

The decision making by leaders is very crucial in determining the success of an organization. The leadership and management of Apple believe in consultative leadership and working together in order to arrive at the right decisions for the company. Steve Jobs believed in consultation and delegation of duties in order to ensure proper decision making and implementation of tasks (Gru?nig& Ku?hn,2015). The leaders of the company applied various theories of decision making. Some of the theories used in decision making by the firm include the normative theories of decision making as well as descriptive decision making theories.This was very important in the growth of the company as well as nurturing of employees for future leadership in the organization.

Collaborations of Apple

Apple has collaborated with many companies and organizations in meeting its goals and objectives. This strategic acquisitions and mergers are meant to advance the growth and expansion agenda of the company. The collaborations also help in sharing of resources as well as increasing the market share of the company The company has also entered into various alliances, and mergers as discussed below:

In the year 2012, Apple acquired Emagic and professional music software Logic pro in the year 2002. This acquisition is now part of the companies brand iLife software suite. Apple acquired NeXT, a UNIX-like hardware and software platform that was previously owned by Steve Jobs. The company also acquired Coral Software in the year 1989. Some recent mergers and acquisitions by Apple include; Anobit, Chomp, Redmatica, AuthenTec, Workflow, Indorr.io and Gliiimpse. The policy of Apple is to acquire small technological companies whose core competencies and resources complement one another. This has been very intergral in the growth of the company (Chapman, 2013).

Factors that may negatively affect Apple's growth in future

There are various factors that threaten Apple. They include:

Increasing competition. The level of competition in the industry is increasing very fast with companies like Microsoft and Samsung positioning themselves as being of high quality and selling at a premium price.

The limited distribution by Apple may affect the demand for the product in future. This will result to decline of the company(???, 2011)Another factor that may negatively affect Apple including changes in the political and economic environment in countries where it carries out manufacturing activities. This will result to increase in production costs hence reducing profits of the company.

Recommendations:

Increase investment in research and development to fuel advancement of technology and develop new products. This will help in keeping the company further ahead of its competitors.

Develop an aggressive distribution system with the aim of increasing sales in developing countries.

Apple should locate its manufacturing activities in different countries and regions in order to reduce and spread the risk that would be incurred in case of a negative change in the economic and political environment of countries in which it manufactures its products.

Conclusion:

Apple is one of the most successful companies in the world and its success story has been fueled by proper management and leadership. The management of the companies over the years has been able to create strategic capabilities for the company. These capabilities have helped the company to attain a competitive advantage over its rivals and therefore becoming more successful. Leadership has also played a huge role in making Apple successful(Barney & Clifford, 2010). The founder and former CEO is credited with turning the company around and leading it to glory. The future of the company looks bright with projected growth in all aspects over the next five years. However, it is important for Apple to identify factors that may pose a challenge to the company in future and take the necessary steps to fix the problems or to reduce the risk associated with these factors.

Reference:

Apple surpasses Microsoft as world's most valuable tech company. (2010). Physics Today. https://dx.doi.org/10.1063/pt.5.024368

Barney, J. B., & Clifford, T. G. (2010). What I didn't learn in business school: How strategy works in the real world.

Chapman, R. J. (2013). Simple tools and techniques for enterprise risk management. Hoboken, N.J: Wiley.

Drucker, P. F., & Maciariello, J. A. (2007). The daily Drucker: 366 days of insight and motivation for getting the right things done. Pymble, N.S.W: HarperCollins Publishers.

European Conference on Management, Leadership and Governance, & Politis, J. (2012). Proceedings of the 8th European Conference on Management, Leadership and Governance: Neopolis University, Pafos, Cyprus, 8-9 November 2012.

Gru?nig, R., & Ku?hn, R. (2015). The strategy planning process: Analyses, options, projects.

Gong, Y. (2013). Global operations strategy: Fundamentals and practice. Berlin: Springer.

In Schwenker, B., & In Wulf, T. (2013). Scenario-based strategic planning: Developing strategies in an uncertain world.

Inside Apple: how America's most admired--and secretive--company really works. (2012). Choice Reviews Online, 49(11), 49-6372-49-6372. https://dx.doi.org/10.5860/choice.49-6372

Johnson, G., Scholes, K., & Whittington, R. (2008). Exploring corporate strategy: Text and cases. Harlow: Pearson Education Ltd.

Kaliannan, M., & Ponnusamy, V. (2014). Apple was sweeter when Steve Jobs held sway. Human Resource Management International Digest, 22(4), 25-28. https://dx.doi.org/10.1108/hrmid-07-2014-0084

Lu?sted, M. A. (2017). Apple: The company and its visionary founder, Steve Jobs. Minneapolis, MN: ABDO Pub.

Mulvey, P., Kupersmith, K., & McGoey, K. (2013). Business analysis for dummies. Hoboken, N.J: For Dummies.

Market Technicians Association,. (2017). CMT Level 1: An introduction to technical analysis.

Mun, H. (2016). The strategy for Korea's economic success.

Terwiesch, C., & Ulrich, K. T. (2009). Innovation tournaments: Creating and selecting exceptional opportunities.

O'Grady, J. (2009). Apple Inc. (1st ed.). Westport, Conn.: Greenwood Press.

O'Grady, J. D. (2017). Apple Inc. Westport, Conn: Greenwood Press.

Osterwalder, A., & Pigneur, Y. (2013). Business model generation: A handbook for visionaries, game changers, and challengers. Hoboken, N.J: Wiley.

???. (2011). A study of Steve Jobs's human mind from an angle of design (Based on a precedent of product innovation of Apple company and Philosophical perspective from Heidegger). Journal Of Digital Design, 11(2), 371-381. https://dx.doi.org/10.17280/jdd.2011.11.2.035