Capability Choosing and Justification - Apple - Case Study Example

University of Southern Queensland MKT3002 business strategy in a global environment Case study 2 – CAPABILITY analysis& STRATEGY CHOOSING Student Name: Student ID: Due Date: Word Count: Similarity score: Table of Contents 5.0 Capability analysis 5.1 Capability analysis table 5.2 Capability rating by resources 5.3 Capability choosing and justification 6.0 Capability matching 6.1 Capability matching table 6.2 Rating capability with the KSF 6.3 Rating narrative 7.0 Strategy choosing 7.1 Choose five strategies 7.2 Prepare matrixes 7.3 The five questions List of references Appendix (should be included only when necessary) 5.0 Capability analysis 5.1 Capability analysis table Table 5.1 Capability analysis table for Apple Inc Functional area Case organisation’s capability Description of the capability Manufacturing Product quality and Diversification The company manufacture unique and quality hardware and electronic products that are highly diversified, demonstrating a highly level of skills and knowledge in manufacturing Research and development Ability to produce innovative product The company invest a lot in research producing highly innovative products that are highly sophisticated and unique Sales and Distribution Effective customer services and use of techniques for logistic management The company has physical retail stores and online store, with efficiency supply chain system to ensure effective customer services Product Design Unique Design The company produce unique products that are highly engineered and designed to integrate new technology Marketing Effective promotion of brand-name products The company has highly managed to market its brands through high quality, differentiation, and uniqueness Corporate Head Office Effective company management The company works at international level but enhance centralized management of its operations Human Resource Empowering, motivating, and retaining workers The company employs skilled and vibrant young people from different culture, who are then empowered, and motivated through various strategies including healthy working environment, personal development, and inclusion to ensure high retention. Note: add more rows if you have more than ten entries for either the first or the second column. 1.0 2.0 3.0 4.0 5.0 5.1 5.2 Capability rating by resources Table 5.2 Rate each capability by resources Tangible resources Employees Empowering, motivating, and retaining workers x Software Hardware Electronics suppliers Retail stores Product quality and Diversification x Intangible resources Strong brand name Effective promotion of brand-name products x Employee’s knowledge and skills Powerful brand image Customer database Strong company philosophy Unique Design x Processes & systems Decision making processes Effective company management x Supply chain process Engineering process Effective company management x Organisation culture Inclusive culture Innovative culture Ability to produce innovative product x Note: 1. Match each capability from column 2 in Table 1.1 with each resource listed on left by row. 2. Rate(√ or X) each capability relative to the strongest competitor in the industry here by seeing how far away your capability is from the strongest competitor; 3. Add any necessary rows or delete any unnecessary rows to suit your own needs. 5.3 Capability choosing and justification Unique Design Unique design is a capability that ensures that the company produce more sophisticated product that are more attractive with new more intelligence features which are highly preferred by the users. The company unique designs normally integrate the latest technology and thus, they are highly preferred in the market compared to the competitor’s products. The company products have been found to contain unique features that make them more powerful and reliable. For instance, most of its hardware and electronics contain rugged polycarbonate or glass and aluminium to keep their high performance components sound and safe. Their applications are highly unique and highly secure compared to that of their competitors. The hardware batteries are highly rechargeable among other unique design features (Sahoo, 2012, p. 44). Ability to produce innovative product Apple considers innovation as is source if development and survival since it was established. The company has fruitful penetrated this notion into corporate culture. This idea is precisely makes the company’s product unique and exceptional. The company’s name has earned innovation as its synonym in the eyes of the public. It has manage to guide the innovation trends since 1984 with invention of Mac machine to invention of touch screen, lately with invention of the most sophisticated iPhone 6. The company has successful manage to grasp the customers products requirement, and has always manage to integrate luxurious, impeccable features which gives it an upper hand in the market (Johnson et al., 2012, p. 8). Effective promotion of brand name The marketing technique of the Apple Company is highly successful. The company appears to understand the marketing aspects that will excite people regarding its products and execute the effectively. Its marketing strategies demonstrate that the company cares for the lifestyle of its customers. It normally advertise its product as a way of offering people an improved life and make lifestyle and aesthetics appeal trend essential. The company launch all its products with these characteristics and exceptional functionality. The company has tradition of launching new product after one year of 6 months, which is followed by intense advertisement campaign that increases its sales. The company also takes the liberty of announcing the launch date of a new product in the media, making customers excited and ready for the new product (Johnson et al., 2012, p. 16). Product Quality and Diversified The company is known for creating quality products that are highly diversified. It creates computer hardware and software, electronic devices that include ipads, ipods, iphones, apple TV, and other related software application products among others (Mallin & Finkle, 2011, p. 67-68). All these products are highly known for their exclusive design, high development and manufacturing quality. The company also offers network solutions and enhance sales of various technology related accessories. Most of accessories and application software are exclusively designed for its products an aspect that increases their sale by ensuring all its hardware users only depend on their software. In this regard, the company manages to improve the sale of all its products and to cut unnecessary competition from the software industry (MarketLine, 2015, p.4). Effective Company Management The company has a strong management team which is comprised of visionary leaders with innovation as their main goal. The company management is centralized with a president and CEO as the head of the company. However, the company has managed to assigned duties to various vice presidents with unique functions that range from marketing, engineering, finance, and design among other unique and general company’s operations. These individuals have highly enhanced the general operation of the organization processes in the company. They have highly contributed to the high organization performance and development of competitive operational strategies in the company. Consequently, the company has managed to emerge among round competitive companies in the market which provide it with a better market position (MarketLine, 2014, p. 13-17). 6.0 Capability matching 6.1 Capability matching table Table 6.1 Matching capabilities with the KSFs Key Success Factors (from case study 1) Capabilities (Take the capabilities from S1.3 above. That is, your choice of 5 capabilities). Match each capability with each KSF in Column 1) 1.Brand Name Unique Design 2. Differentiation Maintain product quality and differentiation 3. Alliances Ability to produce innovative product 4. Relationship with suppliers Effective company management 5.Strong Advertisement Effective promotion of brand name Note: All capabilities must be matched with a KSF and vice versa. If more than one capability matches a KSF then use an additional row. 6.2 Rating capability with the KSF Table 6.2 Rating the capabilities with the KSFs Capabilities KSFs (From Table 2.1 above) Unique design Ability to produce innovative products Effective promotion of brand name Product quality and diversification Effective company management Brand Name 9 9 9 5 5 Differentiation 6 7 6 9 6 Alliances 3 5 2 3 7 Relationship with Suppliers 4 4 3 7 7 Strong Advertisement 8 9 9 6 6 TOTAL Add each column to complete the exercise 30 34 29 30 31 Note: Rate each capability from 1 to 10 with 1 the lowest and 10 the highest. Add each column to complete the exercise. 6.3 Rating narrative Unique Design Unique design is recorded as the third in the total rating of the company’s capabilities. It was highly rated with regard to strong advertisement, brand name and differentiation. This is because unique design highly enhances the company’s marketing process by providing marketers with high marketing stamina. Unique design also improves the brand image and thus, promoting the brand name and giving it a position in the market. The company’s unique design has highly contributed to growth of the company’s products preference in the market. Unique design has also been highly employed differently in different aspects, resulting to development of differentiated company’s products all with unique and appealing features (). Ability to Produce Innovative products The total rating ranks this particular capability as the topmost company capability. Innovation is ranked as the topmost capability since it is adapted as the main company’s culture. Thus it is highly employed in every aspect of the organization operations where possible. Innovation contributes greatly in the development of brand name, and has highly enhanced strong advertisement of the brand. Advertisement is highly related with the kind of brand, a quality and unique brand ease the advertisement process. Innovation has also contributed greatly to the products differentiation in the company. Research and development has highly enhanced the discovery of new and unique products. This innovation has also been highly enhanced by alliances and availability of enough suppliers to provide the required materials (Lazonick, Mazzucato & Tulum, 2013, p.2). Effective Promotion of Brand Name Effective promotion of the brand has been ranked as the last thing in the capability list. However, it has a high rate of ranking in strong advertisement, and brand name which are among the two key successful features in the brand name promotion. However, alliances and relationship with suppliers do not contribute to the promotion of the brand name. In this regard, the brand name gets extremely low scores in those features. Brand name has highly enhanced the product differentiations since the company’s brand name has highly enhanced the sales of all other products which have been created by the company. The Apple name has highly enhanced the sale of any single products related with the company (Heracleous, 2013, p. 94). Product Quality and Diversification The total score of this capability position it at the same level as unique design feature. Diversification has highly contributed to the development of differentiated products and thus it acquires a high score in that aspect. The company relation with suppliers has also highly enhanced the development of diverse and quality products. Quality products are highly determined by the quality of the supplied raw materials. However, the same cannot be said about alliances. Diversification and product quality has highly enhanced the company’s growth and development promoting advertisement measures and enhancing the growth of the product name (Kysucka, 2014, p.35). Effective Company Management Company management is ranked second based on the total capability score. This is because the company’s success is highly determined by the management operation. Effective management of the organization operation results to general success of the company. In this regard, effective management have played a great part in determining the development of the brand image in the market, products differentiation, creation of strong relationships with suppliers, formation of the right alliances, and also the development of strong advertisement strategies. All this has been enhanced by the general organization management or effective management of a single aspect of management (Khan, Alam, & Alam, 2015, p. 962). 7.0Strategy choosing 7.1 Choose five strategies Maintain the Quality of Products: The company success has highly been enhanced by the quality of the developed products. This has highly enhanced the customers’ preference to and dependability on the company’s products. Thus the company needs to maintain and also consider expanding its distribution system and supply chain by taking high control to its delivery time and quality management. In this regard, the company should consider developing a well-defined quality control department that will work to ensure that the company maintain high quality in all its future products so as to uphold the previously earned legacy in brand image and quality (Iftikhar, 2013, p. 18). Building and Maintaining Customers Loyalty: Apple has a traditional of developing new products at least once per year. In this case, most of the products are expensive since they always involve the production cost. However, despite of this, the company normally manages to enhance high sales from loyal customers who believe in their products. The company should enhance this by trying to create high customers loyalty by centring more on improving experience of the customer and customer services. This can be done by investing in employees training, developing improved users system, and promoting extra customers efficient policies. This is anticipated to earn more loyal customers to the company (Hitt, Ireland & Hoskisson, 2014, p. 84). Re-value Top Leadership: The company’s management and leadership have been found to contribute a great deal to the effective performance of the company. This includes general management and departmental or regional management. A company leadership is normally changed after sometimes and this can highly impact the performance of the company greatly in different aspects. In this regard, the company should consider revaluing its top leadership before employment and also in training leaders to ensure that they have the best required leadership skills and knowledge to maintain or even enhance effective performance of the company (Chun, 2011). Enhance effective stakeholders’ management: The success of any company is also highly enhanced by the contribution of the company’s stakeholders. This include workers and suppliers among others things. The company’s success is highly determines with the company’s relation with its suppliers and its effective human resource management. The company has previously managed to obtain the best employees and suppliers it should currently focus on enhancing their operability and their high retention. This can be done by creating health work environment and also in developing good policies that cater for the welfare of its current and future suppliers. The policies should govern all suppliers in the company to ensure a high level of satisfaction in their operations (Investo.Apple , 2013, p.6). Focus on Developing More and Strong Alliances: The company has been operating individually with little external connections. This may have denied the company a better chance to gather effective ideas to enhance more growth and development. In this regard, the company should consider establishing more alliances. As the company grows globally, it will require strong alliances in different parts of the world. These alliances will provide the company with an opportunity to reduce its establishment cost and also to obtain new ideas. Thus, the company should consider identifying new and international companies to alliance with to be able to enhance its effective growth and development at global level in the future (Jinjin, 2013, p. 98). 7.2 Prepare matrixes Figure7.1 Corporate level matrix Corporate Level Matrix Products/services Existing New Markets Existing Market penetration New products/services New Market development Diversification Figure7.2 Business level matrix Competitive advantage Lower Cost Differentiation Competitive Scope Broad Target Cost Leadership Differentiation Narrow Target Cost Focus Differentiation Focus 7.3 The five questions Does the organisation plan to grow? The company focuses on growing by expanding its products to the international market even further. The company currently operates in major cities of most developed and developing nations and only targets upper and middle class consumers due to their high prices. The company should consider lowering their prices to integrate more middle class consumers in their list of targeted consumers (Elseidy & Helal, 2015, p. 10) What product(s) and service(s) do it plan to produce? The company normally produce new products based on the market survey results on customers need, and the technology trends. The company is currently focusing more on developing more improved iphone products to replace the iPhone 6 series. The new product is anticipated to come with new and more improved applications to boost its high technological design (Apple.com, 2016). What customers does it plan to service? The company still focuses on customers in high social class in all its release. These include young and educated individuals, well paid adults, children and youth from rich families as well as individual who care about prestige and class. This is normally due to high cost of production which translates to high product cost in the market. Which generic strategies will it follow? The company will announce its new anticipated product launching in the media and excite its customers mind with regard to the new features to anticipate in the new products. During the launch day, the company will ensure the products are highly distributed in all its outlets and their features are highly marketed in the media. What position in the industry will it occupy? The company is highly probable to maintain its current market position or experience slight increase of market share with release of new products. Normally, the company’s number of sales increase with release of a new products and decreases later after most of its loyal customers have purchased the product. List of References Apple, Inc, 2016, [online] Available at: www.apple.com [Accessed on 7 June 2016]. Chun, R, 2011. ‘Corporate social responsibility at Apple CEOTim Cook’s greatest opportunity,’ Lausanne Switzerland: International Institute for Management Development. Elseidy, E & Helal,M, 2015, ‘Strategic management team project case analysis apple inc.,’ [online] Available at< http://www.slideshare.net/mahiadel94/apple-inc-strategic-case-analysis> [Accessed on 7 June, 2016] Heracleous, L, 2013, ‘Quantum strategy at Apple Inc,’ Organization Dynamics, vol. 42, pp.92-9. Hitt M. A, Ireland, D. R, & Hoskisson, R. E, 2014, ‘Strategic management: Concepts and cases: competitiveness and globalization,’ Cengage Learning. Iftikhar, R,2013, ‘Implementing strategic management: Apple Inc,’ online] Available at < http://www.slideshare.net/raboz/strategic-management-at-apple-inc>[Accessed 7 June 2016] Investo.Apple, 2013, ‘Apple Inc. Form 10-K,’[online] Available at < http://investor.apple.com/secfiling.cfm?filingid=1193125-13-416534 >[Accessed 7 June 2016] Johnson, K., Li, Y., Phan, H., Singer, J, & Trinh, H 2012, ‘The innovative success that is Apple, Inc. ,‘ Theses, Dissertations and Capstones. Paper 418. Jinjin, T 2013, ‘A strategic analysis of apple Computer Inc. & recommendations for the future direction, ’ Management Science and Engineering, vol. 7, no.2, pp. 94-103. Khan, U. A., Alam, M. N & Alam, S 2015, ‘A critical analysis of internal and external environment of Apple inc,’ International Journal of Economics, Commerce and Management, vol. 3, no. 6, pp. 955-967 Kysucka, B 2014, ‘Relevance of dynamic capabilities to business model: Apple case study,’ [online] Available at:< http://vbn.aau.dk/ws/files/177760076/SEMESTERproject_APPLE_BibianaKysucka.pdf> [Accessed 7 June 2016]. Lazonick, W.,Mazzucatom M, & Tulum, O, 2013, ‘Apple’s changing business model: what should the world’s richest company do with all those profit?’ The Academic-Industry Research Network, AIR Working Paper #13-07/01 Mallin, M. L, & Finkle, T. A, 2011,’ Apple Inc.: product portfolio analysis,’ Journal of the International Academy for Cases Studies, vol.17, no.7, pp. 63-74. MarketLine, 2015, ‘Company profile Apple Inc., ’ MarketLIne Company Profile, pp. 1-33. MarketLine, 2014, ‘Company profile Apple Inc., ’ MarketLIne Company Profile, pp. 1-31. Sahoo, D 2012, ‘Strategic change of campaign at Apple Inc.,’ Vidwat: The Indian Journal of Management, vol. 5, no. 2, pp. 38-48. Appendix (should be included only when necessary) Read More