The Management of an Organization of Microsoft and Apple - Case Study Example

Running Head: Management Strategies Name Course Instructor Date Management strategies are combinations of analysis, decisions and actions that an organization implements so as to create and sustain a competitive advantage (Aghion,Harris, Howitt & Vickers, 2001) In other words, its is an analysis of strategic goals like the mission, vision and objectives, then the management makes the decision like what industry to indulge in and how to compete in it, and finally actions are taken towards the actual implementation of the strategy. The management of an organization is obligated to creating competitive advantages in the market which are unique and very valuable to them but very difficult for their competitors to copy or even substitute (Gawer & Henderson, 2007) It is therefore noteworthy that, strategic management involves what an organization might do if given opportunity in its environment, what is want to do given the values and power from the decision makers, and finally what it should do if give the ethical and legal values in which it is operating on (Aghion,Harris, Howitt & Vickers, 2001). The main objective of every organization is to create a good market playground and maintain it; however, competition is dynamic and every increasing in most fields. These calls for organizations coming up with strategies that will enable them achieve their goals with or without competition (Aghion,Harris, Howitt & Vickers, 2001) Microsoft and Apple are two rival companies and each one works very hard to dominate a larger market share. Both companies have interests in computers throughout the word. Microsoft concentrated on software early enough while Apple concentrated on mobile computing as a market avenue (Wingfield, 2006). To maintain a competitive edge both companies implement management strategies with an aim of commanding the biggest market share in computing field. Human resource management Apple and Microsoft believe that, their success depends on the workforce. Employees are valued in both companies for they are the provider of quality efficiency, responsive and innovation aspects in the company (Sharma, Wingfield & Li Yuan, 2007) In Apple, the human resource department works under the notion that, they provide the best personnel so as to ensure superior performance. Employees are obliged to producing high quality work. They ensure that their hiring is in line with their corporate strategy and objectives (Sharma, Wingfield & Li Yuan, 2007). Microsoft success is also attributed to the effectiveness of their workforce. The hire intelligent, not necessarily experienced fro colleges and also experienced ones from other companies. They focus on employee’s satisfaction, employees rewards for motivation and retaining programs for they believe in employees retaining for successful innovations. Market penetration Microsoft enjoys a very big market share commanding a more that 90% of the operating systems business world wide. It has continually expanded and updated it products which has increased demand of the same among software buyers throughout the world (Pavlou, 2007) Microsoft uses distributional channels allover the world who distribute their well known software and applications through original equipment manufacture (OEM) channels, retail channels by means of independent distributors and dealers, direct marketing to corporate, governmental and educational customers (Pavlou, 2007) Microsoft products are offered under a low cost resulting to monopoly (Etro, 2004). Apple launched their retail initiative in 2001 and has been opening Apple stores throughout the world. Operating their own stores, they are capable of controlling their customer retail experience to the advantage of their operations (Sharma, Wingfield & Li Yuan, 2007) In the stores are qualified and knowledgeable personnel who provide post sale advice support. Diversification Apple and Microsoft have a very different strategy when it comes to products diversification. They understand that, product diversification is all about the range of products or even having new products for the new market (Berndt & Rappaport, 2001) This being the case, Apple indentifies technologies from their conception level or those that are unexploited and finds out a strategy to give them to the mass market. This is exhibited for instance in their products like iPods, iPhones, the GUI, ITunes and Multitouch just to mention but a few (Wingfield, 2006). As for the case of Microsoft, they indentify technologies that are already identified and are successful, then from that platform to gain the targeted market share. These for example are Xbox, MSM, Windows, Windows Mobile, Zune and Bing. For example apple has operating system X which is a BSD Unix based operating with GUI is more user friendly that windows for most users. This is due to the fact that, it has better access controls to limit the spread of malicious software and protect files from compromise. Apple products have user accounts with limited privileges which are unlike windows (Etro, 2004). Business strategy Apple work towards giving the user of the products best user experience and the same case applies to Microsoft. However, apple has innovative hardware, software and other services. The design and develop their own operating system, hardware, application software and innovative aspects which give their customers solutions which are easy to use, seamless integration and innovative designs (Sharma, Wingfield & Li Yuan, 2007) They have also well researched marketing and advertising. The same case applies to Microsoft who makes their hardware through IBM and also designs their own software for their hardware (Pavlou, 2007) However, Apple has diversified in the products that are designed to fit the market segments and therefore are positioning themselves gradually but are not as established as Microsoft (Wingfield, 2006). Competitive Advantage Research and development is very much valued in Apple as it is in Microsoft. In Apple, the research and development enhances value in the company through their speed, quality and quantity innovation which makes the company achieve superior innovation (Aaker & Robert, 2001) This for example is exonerated in the rate of innovations in coming up with Apples operating system Mac OS X as compared to the rate of innovation of Microsoft windows which is a development by Microsoft (Sharma, Wingfield & Li Yuan, 2007) This means that, Microsoft uses longer time frames before they come up with a new OS, while Apple continually upgrades, innovates and develops new OS so as to have more improved version ready in the market. The innovative attribute of Apple have lead it to a competitive advantage for its superior qualities (Aghion et al, 2009) Brand positioning The attributes of a certain brand can impact on the relationship developed with certain brand users. The creative and innovative aspect of apple computer products and the advertisements involved in their promotion do impact in a big way the on the brand loyalty (Dedrick, Kraemer & Linden, 2010) This in the long run lowers customer deflection rates and a down trend of the experience curve and increased value. They adhere to low costs due to their position in the lower point of experience curve and this result to efficient profits. Microsoft has dominated the market for a long time. This acts as bait to the existing customers and brand loyalty. Their expansive market share contributes to their familiarity and thus preferred by many, which translates to better profit margins (Etro, 2004). Pricing The prices of apple products are very high as compared to those of Microsoft in their market segments. This has been the main obstruction for Apple venturing into mass markets and even attaining a sustainable market share (Gordon, 2009) Due to this, their market segment entails only from the education sectors and the graphic professional community. Microsoft on the other hand has lowered prices, which have been a major contributor to their mass market increment and has put them on a competitive advantage (Pavlou, 2007) Advertisements Apple has well laid strategies in creating accurate congruency in their online and offline operations. Has an easy to navigate site which has strong emphasis on multimedia through the incorporation of movies, TV, new media and other promotions (Sharma, Wingfield & Li Yuan, 2007) They use their website to reinforce their brand identity and positions and also do extensive brand marketing by the use of promotional imagery though the mass media sources. Microsoft also uses mass media in their marketing strategy and also through their websites. The use of authorized agents in other countries also hands over the initiative of advertisements to them and this makes it more effective to the competitive advantage of Microsoft (Etro, 2004). Culture and Values Apple boosts for a culture that is found on innovation and creativity and this has become to be adopted in the entire operations of the company (Linden, Dedrick & Kraemer, 2011) The current environment is very dynamic. In connection to this, Apple has encouraged a culture of innovation and initiative so as to adapt in it. There has been emphasis by Apples management on innovative and this means that it is the cornerstone of the company and the basis of its competitive advantage (Sharma, Wingfield & Li Yuan, 2007) Microsoft operates under the culture of innovation and technological democracy. Their much concentration is on innovation which has in the long run contributed to their world wide leadership in operating systems as well as operational software (Pavlou, 2007) Conclusion Conclusively, a comparison of the management strategies between Apple and Microsoft indicate that, Apple strategies position it in a better competitive position. However, Microsoft concentrated on a bigger market share which means that Microsoft makes a good reap out of their business more that Apple does. It is therefore noted that, Microsoft makes much revenue from their business compared to Apple. References Aaker, D., Robert J., (2001), “The Value Relevance of Brand Attitude in High-Technology Categories,” Journal of Marketing Research, 38, 485-493. Aghion, P., Blundell R., Griffith R., and Howitt, P. and Prantl, S. (2009). The Effects of Entry of Incumbent Innovation and Productivity,” The Review of Economics and Statistics. vol. 91(1), pages 20-32. Aghion, P., Harris, C., Howitt, C., & Vickers, J. (2001) Competition, Imitation and Growth with Step-by-Step Innovation,” Review of Economic Studies, Blackwell Publishing, vol. 68(3), pages 467-92, Berndt, E. and Rappaport, N. (2001). Price and Quality of Desktop and Mobile Personal Computers: A Quarter-Century Historical Overview,” American Economic Review, American Economic Association, vol. 91(2), pages 268-273, Cusumano, M. (2010). Technology Strategy and Management: The Evolution of Platform Thinking.Communications of the ACM 53, (1): 32-34. Dedrick, J., Kraemer, K., & Linden, G. (2010). Who profits from innovation in global value chains? A study of the iPod and notebook PCs”. Industrial and Corporate Change 19(1): 81-116. Etro, F. (2004). “Innovation by Leaders”. The Economic Journal, Vol. 114, No. 495: 281-303 (23). Gawer, A. & Henderson, Rebecca (2007). Platform owner entry and innovation in complementary markets: evidence from Intel. Journal of Economics and Management Strategy, 16 (1), 1-34. Gordon, B., (2009) A Dynamic Model of Consumer Replacement Cycles in the PC Processor Industry” Marketing Science 28(5), pages 846-867. Linden, G., Dedrick, J., Kraemer, K.L. (2011). “Innovation and Job Creation in a Global Economy: The Case of Apple’s iPod.” Journal of International Commerce and Economics, 3(1), 223-239. Pavlou, G. (2007). On the Evolution of Management Approaches, Frameworks and Protocols: A Historical Perspective, Journal of Network and Systems Management, Volume 15, Pages 425-445 Sharma, A., Nick Wingfield, Li Yuan. (2007) “How Steve Jobs Played Hardball In iPhone Birth,” Wall Street Journal, p. A1. Wingfield, N., (2006), “'Boot Camp' May Boost Sales of Apple's Macs,” Wall Street Journal, 6 April, 247(80), B1B4. Read More