Strategic Planning of Apple Company - Assignment Example

?Table of contents Introduction …………………………………………………………………………. 3 Task 3 Vision, mission, goals, objectives and corecompetencies ………………….. 4 Company strategies ………………………………………………………….. 5 Planning techniques and recommendations ………………………………… 5 Task 2 ………………………………………………………………………………… 6 Organizational auditing ………………………………………………………….. 6 Environmental auditing ………………………………………………………….. 7 Shareholder’s analysis ………………………………………………………… 7 Alternative strategy ……………………………………………………………. 8 Future strategy …………………………………………………………………. 8 Task 3 …………………………………………………………………………………. 8 Roles and responsibility of strategies …………………………………………. 8 Strategy requirements ………………………………………………………….. 9 Targets and timescales …………………………………………………………. 9 Bibliography ……………………………………………………………………………. 11 Introduction The business world has become increasingly competitive over the past few years and has necessitated that proper strategies be put in place to govern and define it. Various companies such as Apple Inc. have been involved in enacting strategies aimed at helping their company gain a competitive edge. A few of these specialized strategies Some of these strategies involve engaging in activities that make a company more able to derive a greater degree of revenue while at the same time reducing the costs of operation. For instance, Apple Inc. has decided to take advantage of the high demand of smart TVs within the current market as a main strategy of exercising a degree of competitive advantage within this specific sector. Further, the company has also been conducting aggressive marketing strategies aimed at gaining a competitive edge over its main rivals such as Samsung. Task 1: Demonstration of strategic planning processes: For the purpose of this paper, the selected organization will be Apple Inc.; one of the most successful multinational corporations with subsidiaries worldwide. It deals with the production of the communication equipment such as the iPhone as well as the creation of a litany of other consumer electronics. Further, the firm has also engaged in the development of different software for various applications. Currently, the company is in the process of production of new product lines which, according to management at the firm, will enable the company to gain a competitive advantage over its main competitors; Samsung, Huawei, and Google (Papalexandris et al, 2004, p. 90). Many analysts have pointed to the fact that the company is a market leader with respect to the massive amount of technical innovation and development that they are able to generate each and every quarter/year. As a function of this specialty and drive, the firm is able to make state of art goods; helping to explain why most of the goods from this company are in such high demand. Apple has many major opportunities owing to the fact that is has not yet been able to saturate markets; especially in the developing world. Despite the fact that its goods are expensive, they are in high demand due to their high quality and unique appeal that the brand is able to generate. Currently, the company, just like many others, has been facing increased economic challenges. This is especially true after the 2007/2008 economic meltdown. However, to overcome this challenge, the management has been able to engage in a series of strategies which are aimed at increasing the revenue of the company while at the same time reducing the costs of operation. As such, outsourcing has been one of these main strategies. The main countries targeted for outsourcing by Apple have of course been India and China. This owes to the fact that these two countries provide not only adequate labour, but also experienced professionals at a generally lower than market price. 1. Explanation of vision(s) mission(s), objectives, goals and core competencies of organization. (AC1.1) The main vision of the company has been to strive to become the leader in terms of both technological development and provision of state of the art goods. The development of software and computing services, students, businesspersons, and other different institutions and individuals has been one of the major ways that the firm has sought to target specific demographics as a means of effectively realizing such a strategy. As such, the firm aims at being on the forefront in the provision of technology; something that is of course in high demand globally. The company is also concerned with ensuring that the safety of the environment, the community, and the employees is maintained (Young, et al 2005, p. 67). For that reason, the company bears responsibility not only to its business parts but also to all other integral components of the supply chain. Human resource management ensures the mission statement’s goal is achieved by ensuring that the employees are motivated through standard pay mechanisms and by the use of other forms of incentives. Secondly, the company donates part of its income to charity work in order to help the less fortunate within society (Crockford, 1999, p.87). In terms of care for the environment, the company uses some of the most efficient technologies; seeking to reduce their share of pollution. The goals and objectives of the firm are found within its mission statement. For that reason, the goal has been to provide state of the art goods and services to the customers and to be the leader in terms of technological development. Moreover, the company has one of the strongest management teams; this helps to ensure that key milestones are set and reached. In addition to that, a qualified and competitive work force has ensured that the company continues to provide state of the art products to its client base. These are but a few of the core competencies that Apple exhibits within the market. Moreover, these core competencies have helped the firm to foster growth and continued development; not only within the past but likely well into the future as well. 2. Issues that could be involved in the company’s strategic planning. (AC1.2) The main issues which are involved in the strategic planning include the vision, mission and the goals of the company. These three are all imperative in ensuring that the company is on the right course in terms of serving the customers, community and the environment. Other issues, which prompt a strategic planning, are the change in leadership of a given community and the need to ensure a high quality of goods to meet the market demand. Other major issues, which may lead to these kinds of changes, also involve the need to reduce the cost of operations within the company. These strategies are aimed at putting a given company in a competitive position to gain a level of market strength. 3. Explanation of different planning techniques and recommendations for their usage within strategic planning. (AC1.3) The major strategic planning techniques, which have been commonly used in companies, include SWOT and PESTEL analysis (Crockford, 2005, p.53). The former is concerned with focusing upon a company’s strengths, weakness, opportunities, and threats. This is commonly used when the company is facing external threats such as an increased level of competition. In such a way, management seeks to focus on its main weaknesses to make necessary improvements. On the other hand, it also focuses on the major threats and opportunities as a means of seeking to ameliorate these as well. Apple Inc. has taken advantage of the increased demand for the smart TVs within the market; indicative of a strong level of understanding and integration with the “opportunity” that such an opening provides. According to the company’s marketing research, there has been an increase of 15% in demand for these products within the past year alone. PESTEL on the other hand focus on the political, economic, social, technological, environmental, and legal issues that face a given firm or organization. In short, it focuses on the external factors, which may threaten the success of the company. For instance, the economic analysis enables management to decide on issues of expanding the business, increasing or reducing the number of employees and the need for retrenchment in specific markets. Within Apple, the strategy meant to counteract the economic reality that it faced was to outsource many of the jobs of production to India and China; as has previously been referenced. Task 2: Initiation of the planning process by formulation of strategy and consideration of approach: 1. Organisational audit(AC2.1) Organizational audits are a necessary procedure that is imperative in understanding the nuances of how a business operates and whether or not it is profitable. Such a process is carried out with the aim of evaluating the performance of a given company for a specific period of time; generally by quarter or by year. For the Apple, the 2012 marketing capitalization hit around $625 billion. Additionally, its market share has been able to hit approximately $300 billion; becoming one of the most competitive and profitable companies in the entire world. Currently, it has been able to employ more than 60, 000 employees, to enable the company to meet the high demand for its goods and services within the given market. Therefore, the past performance of the company has been exceptionally strong; both financially and otherwise. However, it is imperative to note that this corporation is facing stiff competition from other companies such as Samsung (Gabbott, 2005, p.67). This has led to a significant fall in the sale of Apple products especially in the developing countries. The main challenge though has been the high cost of the Apple products. On the other hand, it is imperative to note that the 2007/2008 economic turmoil has profoundly affected both the company as well as its competition. For instance, due to the increased cost of goods, and transportation costs, the company’s cost of operation has increased dramatically. This has prompted the management to seek strategies that would be used to reduce the cost of operation. This includes the outsourcing of the employees from countries such as China. This owes to the fact that there is both cheap and highly experienced/trained labour available in both of these nations. In addition to this, the company has been able to install one of the most advanced automated production process technology within the entire world. This is important for ensuring that the company cuts on the cost of labour while at the same time meeting the demand within the market. 1. Environmental audit of organization (AC2.2) The environmental audit can be explained as the process through which a given company evaluates its main external forces with an aim of focusing on the best strategies to address any challenges that might arise. Some of the main external factors include the political, social and economic challenges. One of the main external forces that has affected Apple Inc. in the recent past has been the economic downturn as well as a very stiff and healthy level of competition. The latter has been significant with regards to the way in which firms such as Samsung are quickly becoming the top performer. Though the income of the company has been increasing significantly, it has failed to become one of the best in the world in terms of production of software and communication equipment. This has been caused by the fact that the company sells its goods at significantly higher prices; which many middle-income earners cannot afford. As indicated before, the company has also faced economic challenges due to the economic meltdown. 2. Explanation of the significance of stakeholder analysis (AC2.3) The shareholders, managers, and employees are some of the main stakeholders in any given organization. They are the people who are directly affected by any business activities or investment changes that are realized within the firm. The analysis is made for the purpose of identifying the people who are most likely to be affected by any proposed change within an institution (Tracy, 2000, p. 87). Apple Inc. ensures that it involves its main stakeholders in major decision making processes that it engages in. The communication channel within the company has made it possible for all the stakeholders to make their contribution that fosters the growth of the company. The company for instance has professional market researchers who advise the company on the major changes that ought to be made within the company. As indicated before, through the marketing research, the company has been able to make state of the art communication equipment that integrates with the immediate needs of the market. 3. Analysis of alternative strategies for company’s substantive growth, limited growth or retrenchment. (AC3.1) 4. Selection of an appropriate future strategy for your chosen organization. (AC3.2) To achieve these types of growth, the company should consider venturing into other markets. Currently, the company has ventured more into developed countries such as the United States and many of the nations of Europe (Allison and Kaye, 2005, p.76). However, the company has not made a great deal of inroads in the emerging economies; especially in developing countries. With the current competition, it should be imperative that the company seeks other marketing niches within other countries. This will help it to gain a competitive advantage over its main competitors as well as introduce the products to new potential client bases. Task 3: you are required to discuss the implementation process for the chosen strategy and explain the following: 1. Comparison of the roles and responsibilities for suggested strategy implementation.(AC4.1) The major aim of the strategy is to improve the performance of the given organization. For Apple, the strategies are not only meant to increase the revenue of the company but are also aimed at giving the institution a competitive edge over other major competitors (Gorrod, 2005, p.76). However, the success of these strategies will only be realized if the leadership and all the stakeholders are willing to adapt to these changes. It is imperative to note that communication also plays an important role in adoption of the proposed changes (Norreklit, 2000, p.97). For instance, due to different self-interests, a particular change may be rejected directly without its overall merit being realized. This is despite the fact that such a change is aimed at taking the company to another level. However, for Apple to realize its goals and objectives, it will be necessary to ensure that it focuses on reduction of the costs of production and seeks in a single-minded manner to enlarge its market presence. 1. Evaluation of resource requirements to implement the strategy (AC4.2) The main resources that are required include a dedicated management team, highly qualified and trained workforce, and of course capital. As indicated before, management plays an important role in the determination of whether other stakeholders will be willing to adopt a particular change or not. A strong management team can in turn provide exceptional leadership and communication; both to employees and to stakeholders outside the structure of the firm as well. For instance, when a particular change is deemed ambiguous by the stakeholders, it may not be accepted. Likewise, the introduction of any technology may not be received positively by the employees. Similarly, if job security is thought to be threatened, or if management is not believed to have the security of its employees firmly in mind, the degree to which such employees will be quick to enact change will necessarily be reduced. Capital on the other hand enables the company to develop in terms of acquiring new technology as well as expanding in other countries, and acquiring human capital to fund he further development that they have become so famous for (Dorfman, 2007, p.91). To expand the company in the developing world for instance, it will be imperative for the company to undertake a thorough market research. This is carried out with an aim of establishing the beliefs, norms, and values of the people. It also enables the company management to know how the people evaluate the goods of a given company. 3. Discussion of targets and timescales to achieve new strategy. (AC4.3) The main targets will be the new markets, which the company should venture into. The new markets should be in the countries that are described as the emerging economies. This will assist in expanding the market of the company. The timescale for the achievement of this goal should be within the 5 years’ time. However, there should be a quarterly evaluation in order to ensure that the company is on the right path. Bibliography Allison, M. and Kaye, J. 2005. Strategic Planning for Non-profit Organizations. Second Edition. USA. 13, pp. 28 - 145 Crockford, N 1999. An Introduction to Risk Management (2 Ed.)... 18 ed. Cambridge, UK: Woodhead-Faulkner. 12, pp. 23 - 190 Dorfman, M. 2007, Introduction to Risk Management and Insurance (9 Ed.).Englewood Cliffs, N.J: Prentice Hall. 9, pp. 1-150 Gabbott, M. 2005. Introduction to Marketing: A Value Exchange Approach. Illustrated ed. s.l.: New York. Pearson Education. 12, pp.45 -120 Gorrod. M. 2005, Technology Trends (Finance and Capital Markets). Risk Management Systems. 2nd edition. McGraw Hill. 10, pp. 13- 100 Norreklit H., 2000 the balance on the Balanced Scorecard - a critical analysis of some of its assumptions, Management Accounting Research, 11, pp. 65–88. 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