Apple Company is a US based company that manufactures and designs mobile market communication and all the media services such as computers and portable digital music players. They also sell the communication and media devices and offer network solutions to the third party digital content and application across the world. The product includes iPhone, iPad, Mac, iPod, Apple among others. The case provides the in-depth analysis of Apple Inc. by focusing on other parameters such as what triggers or drive change in the company and report of the internal environment that has encouraged the success over the business over the last four decades.

Drivers of Change

Apple Company has been successful in the tech industry for over the last four decades. The success has been driven by the team of competent staff who toil around the clock to ensure the clients get the quality product that can meet the customer’s expectation and also charge a fair price for the product.   The drivers of change in the Apple Company are the vision and mission statement in which spells out how to accomplish the goals of the company

. These goals have proved to be significant in the Apple’s general strategy and accelerated growth in which its primary focus aims at counteracting the effects of the competitors in the tech-industries such as Samsung, Google among others. This implies that the corporate vision and mission need to be dynamic to reflect the changes in the company from the reign of Steve Jobs as the CEO to the current one. The corporate mission and vision ensure that they push for the company’s growth despite the increasing challenges and the competitive nature of the industry in which the business operates.

One of the significant drivers of change in the Apple Company can be traced from the availability of a competent team who work to ensure the company success becomes a reality. This is done through monitoring the performance of every departmental unit across the world by assessing the market niche that exists in the industry. Being a performance oriented company, the company has recruited competent CEO after the demise of Steve jobs who are concerned with the Sustainability of the company’s innovative culture as well as ensuring the employees work according to the expectation of the organization. Furthermore, proper control systems have been vital in providing that the right employees and those who qualify are hired.

Additionally, the innovative nature of the company has been instrumental in driving the change and which guarantees quality products such as having a cycle of product release based on the market demand when they are ready. For instance, the version of the iPhone whose success is superior and targets differentiated product that matches the proprietary rather than the application of the open source approach to technology which locks the customers for a longer time. The invention of the 3D touch changes app design was a pivotal reinvention to drop down menus which have been a significant challenge to the information provided on the Web.

The other external drivers of change are the competition in the market in the tech industry. The tech industry is a competitive one in which changes occur periodically, and innovation is required to meet the customer’s expectation as well as the needs of the market. The basis of continuous innovation is enhanced by adequate research and development that achieves the goals and expectation of the market. For instance, the innovation of the new product and services which brings the new customer and justifies the reason to buy Apple’s product. The impressive growth in the industry has attracted the market players in the emerging market economies where they can access cost-effective product on their affordability such as iPhone market share of new smartphone sales in the global market. Apple’s company have a profitable business and continue to win the market.  This has led to increased sales revenue at $74.5 million units which accounts for 46 percent in the first quarter and 69 percent revenue of the company.

The aggressive share buyback program is also a driver after the announcing plans that meant returning to the shareholders. The announcement is meant that the dividend of the company and its share repurchase program will increase yearly.The aggressive share repurchase outweighs the dividend increment by a significant margin leading to an increase from $10 billion to 90 billion. The existence of the scheme attracted numerous investors who invested heavily, and this led to increased investor’s equity for the company over the period.

Apple undertakes the scheme as a means to supplement the market through rights and share investment scheme by allowing the shareholders to invest in their market, and this has been a source of finance to the company over the region and in return obtain dividend to support them through their initiatives. Apple’s aggressive repurchase option own their shares through the more substantial cash flow and corresponding earnings per share increases more than the net income. For instance, the Apple net income increased to 37 percent whereas the EPS rose to 48 percent in 2018.

The change strategy employed by the company has been instrumental in driving change. Such as replacement of the CEOs and employees with those that are competent. The company has been having a complete change in the top executive over the period from the Chief executive officer and the Chief finance officers and others. The performance-based management has been crucial towards driving the change.For instance, Tim cook the former CEO made changes in the department in the Apple Inc. to ensure that the success is guaranteed. The overhaul in the departmental changes and replacement with the competent staff has been at the behemoth of change management.

Impact of the Change Drivers in the Tech-Industry

One of the fundamental impacts of the change drivers is that it guaranteed a higher revenue base and smooth flow of the operation of the company. This has led to an increased revenue base of the company over the period. This implies that for instance, high innovation has been crucial to the manufacturing of quality tech-product that meets both the market and customers demand across the period. This has led to radical changes which ultimately has improved its growth. Additionally, the change has been instrumental in controlling fraud and encourage transparency and accountability which to a greater extent improved the performance of the company globally. Furthermore, the drivers of change have increased Apple’s Company’s reputation in the market as they offer a quality product at a cost-effective product to meet the quality standards.

Competitive Environment

The Porters’ five forces are a crucial component that has an impact on the firm’s profitability in the Apple Company. The forces outline the external factors existing in the business environment which is as a result of the rivalry and strong competition, bargaining powers of both buyers and suppliers and crucial factors that are included in the strategy formulation to ensure that the business success does not stop. Porter’s model indicates the strength of the external factors in the tech-market industry. The five forces include the threat of new entrants, bargaining power of suppliers and buyers as well as the threats of substitutes and rivalry among the competitors. Thus, Apple needs to focus on the weakest aspect such as the competitive rivalry and bargaining power of buyers to drive continuous innovation. Addressing the external environment will strengthen their position in the market which aids them in attracting the customers to purchase more Apple product a. Competitive Rivalry (strong force)

Apple has a diversified portfolio framework on the tech-based product, which put her in a difficult situation to compete globally. This has led to a highly competitive market which has led to a growth in sales to 50 percent in America and 27 percent in Japan. However, it is losing the market share in the sale of smartphone which has decreased by 14 percent of the market and the growth in the iPad has slowly declined to 13 percent compared to the competitors who are at 79 percent. Companies such as Samsung and LG supports the aggressive encourage rapid innovation and advertising. The strategy involves switching cost to enable the customer to be able to switch from apple to other brands, which stiffen the competition and a strong consideration to Apple’s strategic formulation.

1. Bargaining Power of Apple’s Customers/Buyers (Strong Force)

Customers often require a lot from the company in which they purchase the product at the best minimum price. However, this has a spillover effect of reducing Apple’s Inc. Profitability in the long-run. This implies that the customer base for the company results in higher bargaining power and ability to obtain the discount and other company attractive offers. In a bid to ensure this is achieved, Apple does the bargaining power of buyers by:

• Establishing the number of customers and building the larger customer base which will reduce the bargaining power and provide an opportunity to streamline the sales and production
• Innovating new products by seeking discounts and other offerings for the company product which encourages innovation and eventually bargaining powers of buyers.
• Offering new product which will reduce the customer’s chances of switching to competitors c. Threats of Substitute Product or Services (Weak Force)

The existence of a new Apple product in the market will meet the customers’ needs differently. The threat of substitute for the product will be higher if it provides a unique offering which is not existing in the industry. To address this, it will provide service-oriented rather than targeting the product-oriented strategy. Secondly, offer a product that focuses on the need of the customer rather than what the customer purchases and thirdly increasing the switching cost for the customers.

1. Bargaining Power of Suppliers (Weaker Force)

The suppliers of the electronic equipment purchase their raw material from different suppliers. This supplier’s position in the market can be favorable or unfavorable by either increasing or decreasing the profit margin. This implies that dominant suppliers will negotiate for the prices to charge higher prices to their competitor in the same field.

Consequently, this leads to an overall impact resulting in higher bargaining power which lowers the profitability. Apple handles the force by building an efficient supply chain with different suppliers across the world. Experiment the product design using the variously available material as a contingency plan in case the price of one raw material increases one can shift to another supplier. Finally, develop a dedicated supplier whose business will be dependent on the Apple Company. This will involve creating a scenario where they will have a bargaining option advantage power to compete favorably in the market e.    Threats of  new entrants (Moderate Force)

The new entrants in the tech-equipment through innovation and new ways of doing things which have put pressure on the market for the product which means that a lower price will be charged to the product by reducing cost and adding new value. To enhance this creates a substantial barrier to deter the competitive edge through innovative approaches to the new product that guarantees future success in buying the Apple product and building economies of scale that lowers the fixed cost per unit. Additionally, build strong capacities on market research and development to deter the new entrants in the market.

3. Internal Analysis:

3.1    A Resource Audit, distinguishing between Basic and Distinctive Resources

VRIO analysis of Apple:

It is a tool used to assess the domestic business environment and a complement to the PESTLE analysis. Valuable Resources difficult to imitate In the Apple company intangible asset and total asset becomes the prime target.

Brand image/equity:

Apple’s brand image has been its key strength in the market because of the emphasis on the quality design that meets the market standards. Additionally, the customer focus has also been instrumental in building a sustainable brand image in the market

Global presence:

Apple Brand is available in the worldwide market and sells through both online and physical selling to its customer. This has enabled them to build a secure network in the market.

Premium product range:

It also provides a premium product range that makes her enjoy more considerable profit margin and makes the company ranked highly in the global market segment in the tech-market industry.

Customer loyalty:

The company has built huge customer loyalty by focusing on innovation that targets customer needs.This makes their brand to be acceptable worldwide owing to the larger customer base.

Supply chain:

The company has strong networks, which handle a different network of suppliers and the larger part of the global supply chain segment, which provide the raw materials and labor at an affordable price relative to other parts

3.2 Design and innovation capabilities:

The excellent design and innovation capabilities create room for elegance and the use of innovative technologies

HRM & culture:

The company hires competent staff who are talented and trained to deliver results. This is due to the strong culture exercised by the organization and has been built for a relatively long period. This means that as part of their culture they include high skills employee most complex technological brands to handle them.

 
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