Strategic Development History Of Apple

Strategic Development un giveds report Of appleThis report al first-class honours degree for explore the strategic evolution s hollow of apple Inc. (previously orchard apple tree Computer, Inc.), its latest strategies and form the founding of orchard apple trees forthcoming remains in the form of strategic recommendations which orchard apple tree Inc. scum bag persuade to chafe sustainable competitive advantage and full(prenominal)er offshoots in the future. The triumph of a dodging is determined by the bon tons initiative actions, how sanitary it anticipates competitors responses to them and how easily compeverys anticipates and reacts to its competitors actions. In strategic development we provide analyse how apple establish a framework for setting its direction and determined the criteria to take strategic decisions. later having analysed it, the report lead depict its current strategic situation by doing macro and micro digest and on the basis of it, the possible future recommendations impart be insinuateed.Introductionorchard apple tree Inc. is an Ameri force out multinational skunk that designs and sells consumer electronics, personal estimators and computer softw atomic number 18 system. It is best known for its products bid iPh single, ipod and mack computers. The company was established in April 1, 1976 in Cupertino, California and incorporated in January 3, 1977. As of September 26, 2009, orchard apple tree had 34,300 full quantify employees and 2,500 temporary full era employees worldwide1. It had worldwide sales of $42.91 billion in its fiscal year expiration September 26, 20092. It has much than than(prenominal) than 284 retail stock certificates3 as of January, 2010 and online store where software and ironware products are sell. The financial Data of apple Inc. for 2009 are as pecuniary Data of apple Inc. for 20094Financial Fiscal as Ended on 26-09- 2009Total Revenue42,905mGross Profit17,222mTotal Cash issue2,997mNet Income8,235mTotal Asset Value47,501m1 www.apple.com2 revise Request Quarterly Income Statement orchard apple tree Inc. January 25,2010.3 apple domiciliation Media Event To sidereal day. Come See Our Latest Creation MacRumors. January 27, 2010 accessed on 17 July 20104 http//www.google.com/finance?fstype=iiq=nasdaqaaplStrategic Development Over observe apple Inc. has managed to take a shit substantial quantify in the highly competitive consumer electronic and computer patience by innovating and forging a path considerably assorted from those of the largest competitors in the industry, successfully differentiating its products from those of the tilt by choosing to commission on quality, superior client profit and design elegance while outsourcing actual manufacturing to around trusted veritable equipment manufacturers. Even though despite of this fact apple has created for itself, the stiff argument within the industry and other external factors presen t formidable challenges to the firm.The beforehand(predicate) Years 1976- 1980orchard apple tree I was the first computer introduced by Steve Jobs, Steve Wozniak and Ronal Wayne. It was sold as the motherboard with Central processing unit (CPU), RAM and the basic textual video chips. By the end of 1970s orchard apple tree had a faculty of computer programmers and designers and a production line. After orchard apple tree II they introduced orchard apple tree III in May, 1980. The main competitors for orchard apple tree were IBM and Microsoft competing for food food grocery store share. In 1984 apple launched macintosh which was initially sold well further the follow up sales were not strong. The computer industry destiny changed when the Laser generator were introduced. The Mac was authorityful in the market callable to its advanced fine art capabilities which was already necessarily built in to create the intuitive Macintosh GUI. At that time it has been suggested the co mbination of these three products was caused for the creation of desktop publish market. As the desktop publishing became widespread, the sale of apple has reached sore-sprung(prenominal) high and the company has offered its first public passs in September 7, 1984.The reason for the Apple sustainable growth due to its attractionship in the education sector, attributed to interlingual rendition of LOGO programming language used in many schools with the Apple II.1986- 1993 A Move in StrategyAfter the failure of abundant Macintosh, Apple changed its strategy and offered Macintosh Portable in 1989. In 1991 Apple introduced violence volume which made the basis of the modern form of ergonomic layout of laptop computer. In the standardized year Apple came up with its advanced operating system System 7 which added colour to interface and enhanced the networking capabilities. It was remained the architectural basis for Mac OS up to 2001. The success of PowerBook brought huge rev enues for Apple and it seemed that zip fastener go wrong with Apple at that time.MacAddict a famous magazine publisher named the period between 1989 and 1991 as the first golden age of the Macintosh. The Apples strategy to attach the market with other products homogeneous digital cameras, portable CD audio players, speakers and video consoles did not work well for Apple. The main focus of Microsoft was to gain market share with Windows, focusing on delivering software with cheap commodity where as Apple was even though was rich in engineering matter but was bit expensive.1994 -1997 ReinventionApple put its measuring stick in the PDA market by introducing Apple smartton which was star the first in the industry. Apple has started working on other platforms by the early 1990s such as A/U. It was needed at that time to replace the platform for Macintosh or reworked to design a personnelful hardware to run the Macintosh.1n 1994, Apple allied with Motorola and IBM. The aim was to create a overbold computing platform Power PC bring up Platform which would use IBM and Motorola hardware coupled with Apples software. The AIM alliance worked for Apple and Apples software left the PC cold behind. Apple introduced Power Macintosh the first time of many Apple computers to use IBMs PowerPC processor.Apple choose a new built -to- order strategy in November 10, 1997 by introducing Apple store which was tied to its overall strategy.1998- 2005 A New separateApple introduced iMac a new all in adept computer reminiscent in August 15, 19985. The iMac was equipped with new technology and groundbreaking design. Near astir(predicate) 800,000 units sold in first five months and returned Apple to profitability for the first time since 1993.In this period Apple purchased just about(prenominal) companies to create a portfolio of professional and consumer- oriented digital production software. In 1998, Apple announced the purchase of Macromedias Final cut software endowm ent a new signal of entering into the digital video redaction market. The following year Apple had released two video editing products, one is iMovie and the other one is Final Cut Pro for the professionals. Around 800,000 users had been registered with this software by the start of 2007. Apple has opened its first official store in May 19, 2001 in Virginia and California. In the alike(p) year Apple has introduced its first iPod portable digital audio player. This product has presumption a new success to Apple as more than than coulomb jillion units were sold within six years. Apple has a strategy of bounding the node to its products and doing a business a different way. Apple has given a new theme to music industry business by introducing Apples iTunes retention whereby you terminate download music for US$0.99 song integration with iPod. Apple has fabricate the market leader in the online music services due to it with over 5 billion download by June 19th, 2008.2005 -2010 New epochApple has taken another move in its strategy of tyrannic the market by announcing on June 6, 2005 in the Worldwide Developers Conference that Apple would start producing Intel- rackd computers in 20066. MacBook Pro and iMac became the first Apple computers to hold Intels Core Duo CPU. By 7th of August 2007 Apple had transitioned the unblemished Mac product line to Intel chips. The day Apple announced its iPhone and Apple TV its share impairment hit $97.80, an all time high at that point and in May that footing went up to $100 mark7.A next grade to its success was selling the threesome party applications for its iPhone and iPod touch. Within a month, 60 millions application sold on this platform and brought in $ I million dollar on average. ternary months later it was announced that Apple has become the third largest mobile handset supplier in the world due to the popularity of the iPhone8.Apple added a one more milestone in its success by tar nourishing the marke t with its new iPad on January 27, 2010. It runs the same touch based operating system as iPhone and many of the application of iPhone are compatible with the iPad. On the launch day more than 300,000 units sold and this figure reached to 500,000 by the end of the first week9.Situational abridgmentApple is one of the most successful companies of the time that bucked the handed-down notions of what a corporate culture should look like in basis of organizational hierarchy. After doing the macro (PESTEL), industrial analysis we would be in a position to clearly analyse its current position and suggest further recommendations.Environmental AnalysisPESTEL AnalysisFor doing environmental analysis of Apple we will use the PESTEL analysis aprospicient with keeping of global forces as well.demographicEconomicP/LegalEnvironment bratsOpportunitiesEconomic1. Signs of economic turnaround are present but many consumers are unconvinced and eliminateing less.Apple always sell products on pre mium prices so it maybe out of consumer prices range1. Economic reco rattling will cause spending. Apple advanced(a) and high quality products attract the clientsDemographic1. Flattening of wages- Levelling Influence1. Rising prices and stagnant leave workers and families with less bullion to spend on perceived luxury goods.1.Apple known for high quality, dependability and long lasting products will attract nodes seeking determine for their money semipolitical/Legal1. emf FCC Internet Regulation2.Healthcare Reform1. FCC internet regulations may cramp innovation on the internet, reducing new methods for Apple to hoodize the power of internet.1.Apples useful portable device could be leveraged in modern healthcare settings, funded in part by government money, increasing demandtechnical1.Device Convergence2.Shortening Product Lifecycle1. Apple liberal line of devices may become obsolete with the advent of multi-use portable devices.2. Increased pressure to innovative may resul t in missed opportunities and inventories losses.1. As a leader in portable devices Apple brush off innovate and lead the way in platform.2. High RD commitments may propel. Apple led the industry by out-innovating competitors.Socio heathenish1.Increase desire for on-the-go devices2. Greater concern for the environment.1. Apples portable computers may lose relevance among new on-the-go devices.2. Device manufacturing will be equated with pollution and climate change.1. Apple rouse lead innovation in on-the-go devices utilizing RD portable knowhow.2. Apples lead in environmentally- sound practices will be a marketing advantage.Global1.Developing Chinese economic system2. Potential worldwide climate regulation.1. The developing Chinese economy will require higher wages for factory workers.2. Emissions regulation will impose huge burdens on Apples production costs.1. Massive population with change magnitude buying power for Apples products.2. Apple has already made steps to clean se environment- friendliness can be used to the firms advantage.TechnologicalGlobalS/CulturalIndustrial AnalysisFor industrial analysis we make use of Porters five forces framework to assess the different forces that affect the overall industry in which firms operate.Porters Five ForcesThreat of New EntrantTo analyse the nemesis of new entrant we hold up to consider the different barriers that make this flagellum nominal to sever. The barriers areEconomies of ScaleApple had already experience of manufacturing mass- market consumer electronic devices, so Apple was not adversely affected by this barrier.Product DifferentiationThis trait goes in favour of Apple because Apple is the leader in the innovative products and Apple has certain amount of security through the strength of its brand identity. But this product differentiation can be emulated to a certain degree.Capital RequirementsApple enjoys a supple advantage here but it may be quickly lost. If we prattle about other comp anies they might have experience in manufacturing booth predicts but not necessarily software. To compete with Apple they have to locate a lot on this sector. imprimatur Apple is a leader in innovation as it uses to spend a huge capital on RD which is huge barrier for the new company to spend a significant amount of capital on RD.Access to Distribution contributeApple remained successful in gaining access to a dissemination channel and they also tied themselves exclusively to a single cell phone network. So the new entrant will have to take some time to reach to this level.So having analyzing these barriers we can say that the threat for new entrant for Apple is low to medium.Bargaining Power of SuppliersThe main supplier of Apple Inc. is Intel for microprocessor chips and Apple has strategic alliance with Intel and Microsoft as Microsoft enable Apple users to use the Microsoft Windows operating system on its machine. So, Apple has to be very careful in managing its relation with these suppliers especially with Intel. So the bargaining power of suppliers is medium.Bargaining Power of BuyersThe bargaining power of buyers is low as its alto fascinateher Apple which always come with new innovative products. Even though its true that there are many competitors of Apple in the market for different products but even then mass wait for Apples new invention. So, clearly the bargaining power of buyers is low in case of Apple.Threat of SubstituteThe threat of stockpile is high as Apple products are the premium products and there are lot of companies that are making products like mobile phones (iPhone) which are very similar in functionality and in shape. Second companies like DELL, ASCER and Microsoft has started penetrating in the mobile market shrinking the market share of Apple. So keeping in view of todays scenario the threat of substitute is higher for Apple Inc.Competitive RivalryThe competition among the giants is very jolting and everyone is fighting for large market share through intensive price cuts and changes. The competitors of Apple are Microsoft, HTC, Dell, NOKIA and others. The competition is becoming tough and tough as most of the companies which were specialist in PC related stuff have started coming in the mobile and PC tablet market. Due to this the competition has become tougher and for more market growth and share, everyone is ready to take any sore of moves like price cuts, technology change, etc.The last step to evaluate the company position in conjunction to its industry we do the mill analysis which will depict what sort of strength/weaknesses it has what potpourri of opportunities and threats it has from its surroundings.Potential Entrant ThreatMediumThreat of entry private-enterprise(a) RIVALRYHIGHSUBSTITUTESHighSUPPLIERSLowBUYERSMediumBargaining Power Bargaining powerThreat of substitutesPorters Five Forces Framework for Apple Inc.SWOT AnalysisStrengthsEase of useHigh Corporate Reputation attractor in Inno vation and market leaderLoyal customer baseStrong Top ManagementCreative StyleWeaknessesHigh prices check Distribution ChannelsCompatibility issues (e.g. with IBM)Poor Quality Control/AssuranceOpportunitiesNew social devicesiTunes DistributionInternational marketsInternetGrowing industry affect for innovationThreatsEconomic SituationIntensive CompetitionPotential LitigationsPotential increase in supplys costs.Price competitionValue Chain AnalysisValue Chain ActivityCorresponding Firm Practice, Policy/ cognitive operationGeneral AdministrationA greener Apple reduction in zero use in production and transportation to match trend in green business.Strong cash position allows the firm to internally finance expansion and development without cost of capital.Human Resource Management discriminating hiring process find and attract talentGenerous employee benefits program continue industry-leading talent.Technological DevelopmentResearch Development expenditure increased about 66% fro m 2007 to 2009Patent filing protection of important inventions and innovations in the US and worldwideProcurementPositive relationships with suppliers EICC member, working to improve working conditions, created and enforces a Supplier Code of Conduct.Inbound LogisticsAutomated receiving systems reduce facility footmark and space requirements.Delegate raw materials acquisition offer supervision to OEM partners who strain out acquisition.OperationsUtilizes OEMs economies of scale offshore production to save money on costs of build.Internal design design and conceptualize products internallyOutbound LogisticsEconomical/Stylish Packaging eye-catching packaging takes up less space and weight, reducing shipping costs and costs of disposal.Apple Stores/Authorized Retailers working to maintain standards over presentation of products for sale.Direct encumbrance ship products from China to consumer to minimize gunstock build-ups in costly locations. selling and SalesGet a Mac Ads Various direct/ substantiative favourable comparisonsStrategic ChoicesTaking its environment, industry and value chain analysis we may give some preferences available to Apple Inc. for its future growth in terms of more market share and profitability. These are given as step-down the costs of its products and maintaining the same quality standards.Opening of more retail shops for easy access and more physical social movement.Providing facility for customization of its different products like Apple Mac Book and others.Consumer electronics diversification. survival 1 Reducing the costs of ProductsApple has that contour of brand which attracts everyone but the only worry is the premium prices for its products. Apple can hit the market segment which can afford reasonable prices which we can say not much low and not too much high. By slightly reducing the prices and maintaining the same quality Apple can further dominate the market and earn more market share. By doing it the major benefit that Apple will achieve is further brand awareness and customer loyalty.Evaluation of excerpt 1 (SAF test)A useful way of looking at military rank criteria is to view them as falling into three categoriesSuitability, Feasibility, and Acceptability Johnson, G., and Scholes, K.(1997)As farther as the suitability of this natural selection is concerned, then lowering the prices will be suitable for Apple Inc. because most of competitors of Apple they start making the same products design wise and technology wise with lower prices. The company get two benefits with this strategic preference. First it will get more customers who like Apple products but cant buy due to higher prices (means more market share) and the other benefit is killing the competition. So, in my point of view this option fulfils all the three parameters of SAF test.Option 2 Opening of more retail ShopsBy providing more points of direct contact with the buyers will enable Apple to provide better service t o customers and bring the Apple more customer and experience to more people. Apples retail stores have been largely successful, that success can be furthered in new locations within USA, UK and other countries. Apple should practice great caution to avoid over- saturation to retain the nimbus surrounding the stores and maintain their status as a destination.Evaluation of option 2 (SAF Test)By introducing Apple stores provided Apple with an important physical presence to act as both point of sales locations and an advertisement. Opening of more retail outlets will provide Apple more control on the image of brand and provide excellent customer services. Apple comes in the top retailers in- stores sales, generating $4,032 per retail square foot per year, beating other retailers like Tiffany Co. At $2,666 and Best Buy at only $930.10Matching success and impact like the Apple store model is hard for others to achieve. Apple possesses all resources like capital and top management to con sider this option which can prove one step further in its increment success.Option3 Customization of productsDell has taken a lead from all its competitors in providing customized products to its customer through its website. Dell has set a model for its competitors. Apple can contribute to this playing field by crack customised products like Mac Book and other through its website. In this way you are buying your customer and giving them what they want. The customer will be more satisfied and intelligent with the services. Customization will provide efficient value chain management and reduces the inventory level.Evaluation of Option3 (SAF Test)Today is the day of internet and most of leading companies are trading through their websites. Now a days the customers are well IT equipped and more aware. They buy what they want not what the gives. By offering customized products you are giving the customer what they want and biding them. Apple has great happy assets, so it is easier to come up with business model which will press forward Apple to provide customized products to its customers. Secondly it will require minimal capital but its results will be outstanding. There is only one time cost and life time rewards attached to this option. So considering all these aspects, this option is quite good for Apples future growth and sustainable competitive advantage.Option 4 Consumer Electronic DiversificationApple already has a well positioned diversified strategy, but it can broaden its scope while creating value in related and unrelated markets including eBooks and medical equipment. We just examine its current diversification beginning with full sized desktop computers to now a days notebook computer, mobile phones, digital music players, iPad. Despite of this broad range of diversification, opportunities are still there for Apple to avail in further diversification.Evaluation of Option 4 (SAF Test)If we take United States or UK the medical equipment and rela ted devices are growth area of economy. As new healthcare legislation is enacted the importance of modernizing our system will come to forefront. Apples innovative and high quality portable devices would provide excellent platforms for care providers to get benefit of streamlining care. In order get more value from this area and to reduce the capital investment Apple should work with medical equipment manufacturers and core providers to establish Apples devices. Apple can open its portable and mobile platforms for development of unique and efficient medical tools using a combination of new digital medical technologies and current technology of connectivity. Good examples of future products can be digital thermometers and blood pressure monitors that connect through USB to Apple device to automatically log measurements and do real time analysis based on historical values to identify trends.Apple can take advantage of being first mover in this kind of products. After presenting the di fferent aspects we may conclude that this option is valuable for Apple Inc.RecommendationsBased on the above analysis, it is recommended that Apple Inc. formulates a strategy of offering customized products to its consumers to gain more customer satisfaction and customer loyalty. Consumer specific customization and hardware packaging- increase product diversification and eliminate threat of competitive alternatives. It will help Apple to strip certain features and hence reduce costs. The sales will be increased and Apple will a far larger customer base. Secondly it should gain access to additional distribution channels and sales outlets in the international markets (International Presence). It has substantial presence internationally but still has to be introduced in many Asian countries including China, Arab countries and most of Africa. Apple should drive down the costs per unit to enable price reductions and attract more customers. In this way it will not get hold of more market share but also beat the competition increasing in the market. It should exploit its RD to innovate, should create products with similar usability but at lower costs. Especially in the deep recession period people might respond better to lower prices. It has no doubt that Apple is very good in introducing excellent design and innovative products but we have seen a consistent problem with Apples quality control and potency department. So, Apple should stress on improving in this area to keep on its brand image as well as to win the customer confidence on its products.