Business strategy is very essential for every organization. It is the means by which business attain its end desired result (Haley and Haley, 2006). It is the business plans which are prepared for long term. Business strategy is concerned with major resource issues as well as extent of firm’s action. The topic business strategy is discussed in this report with respect to Apple. The present study covers understanding the process of strategic planning. Further the report entails to formulate new strategy for the organization. Along with the present study evaluates the approaches to strategy and also examines the means by which the plan can be implemented.
Strategic planning of Apple is informed by its mission, vision, objectives, goals and core competencies in the following manner:
Mission: Mission statement reflects the purpose of the business as well as it depicts the reason for which firm came into existence. Mission guides the management of business in decision making and provides them the direction to carry out its operations. Mission statement of Apple is to make great products which do not change (Eshun, 2009). Their aim is to make innovative products. This mission helps the firm to make strategic plans.
Vision: Vision statement of organization describes what the company wants to attain in long run. Through this business formulate strategic plans so that it can achieve its vision. Apple’s vision statement is to bring best computing and learning experiences for its consumers (Dandira, 2011). This can be done by launching of new products. The corporation aims at becoming best at designing and manufacturing the electronic products around the globe. The company has committed to provide high quality products and services to its clients.
Objectives: Objectives are the specific outcome which the company wants to achieve within a certain time frame and available resources. Aim of Apple is to maximize profits, to become high tech brand in the world, to discover products which appeal the customers. These strategic plans are formulated so that company can attain its objectives (Mission Vision and Goals of Apple, 2014).
Goals: Goals are those which can be measurable and they are the end results towards which the corporation directs its efforts (Kourdi, 2010). The goal of Apple is not to earn money but it wants to make to great products. On the basis of these goals business devises the plans.
Core competencies: Core competency is the unique feature of business which acts as its strength to get an edge over competitors. The core competency of Apple is innovative design of its product and technology. Based on this company can formulate business plans.
The following are the factors which are to be considered while formulating strategic plans:
Ability of human resources: Before formulating strategic plans Apple needs to know the ability of its human resources (Ireland and et.al., 2011). That is knowledge and skills of its employees to implement and formulate a new strategy.
Organization culture: The culture prevailing within the organization plays very significant role in its success. Apple is required to analyze the attitude of its employees towards strategy formulation and implementation of strategy.
Financial strength: In order to formulate strategic plans Apple needs to analyze its financial position (Hansen and Smith, 2006). This means that it has to give due importance to its cash flow and financial statement before formulating the strategy.
Organization structure: The structure of business has an impact over its activities. While formulating strategy the top management of Apple has to examine its structure capability. That is whether or not the company’s structure is flexible enough to implement a new plan.
Technological factors: While formulating strategy Apple has to view its technology. That means it has to understand that whether it possess the necessary technology in order to implement a new strategy (Marren, 2007). Technological changes have great impact on the business success so these factors are to be considered while devising strategic plans.
The effectiveness of the techniques used while developing strategic plans is discussed as under:
SWOT analysis: This technique will assist Apple in knowing in strength, weakness, opportunities and threats. This method is effective as the business can look at all these factors while developing strategic business plans (Oltra and Flor, 2010). Through this analysis the company can know about its strengths and further it can use it while developing plan so that it can gain competitive advantage.
Scenario planning: This technique is used by the business in order to anticipate its future. While developing strategic plans Apple is required to carry scenario planning so that it can maximize opportunities and minimize the risk. It is an effective technique as the corporation can investigate the uncertainties which may occur in implementing the plan.
External environment analysis: Pestle analysis is done in order to know the external environment of business which may affect the business plans in long run (Murthy, 2012). It is an effective technique as it facilitates Apple to know its external environment while developing business plans.
Growth share matrix: It the planning technique which is also known as Boston consultancy group. It helps the company to know its product lines. With this analytical tool company can know its position on the basis of relative growth and market (López, 2005). Apple can make future business plans by identifying its current position of market.
Strategic positioning of the business can be analyzed by carrying out the organizational audit that is SWOT analysis (Apple SWOT analysis 2014, 2012).
Strategic positioning of the company determines the way it competes and fulfills the needs of its customers (Smith, 2013). This is done by Apple by bringing new design of products and innovation in its technology. The strategic positioning of Apple is strong as it has more strength which gives it an edge over competitors. The factors such as uniqueness is the product of Apple put differentiate it brand with that of the competitors.
The environmental audit of the company can carried out through pestle analysis.
Political factors: 52% of business of Apple is carried from outside so political unrest in those countries might impact the company (Shavarini and et.al., 2013). Also the company manufactures some of its parts outside US. Bad relation of countries with US might have an impact on the outcome of Apple.
Economic factors: Economic crisis had a huge impact on Apple. The increase in inflation rate and unemployment rate has influenced the profitability of business. The reason can be as the products of Apple are luxurious and costly so people have started spending less on its product. The dollar value in US keeps on fluctuating which has bad impact on company.
Social factors: Social factors such as demand, taste and preference of customers affects the business. Possessing apple products have become status symbol in most of the societies (Paswan and et.al., 2011). The company has experienced rapid growth with the emergence of music industry which has increased the market for Apple.
Technological factors: Apple spends largely in research for its product. It has been ranked on the top for its innovation in products. Technology keeps on changing across the globe which determines the product life cycle. The company has taken advantage of technology as it launches new product in market place which result in increasing its market share.
The importance of Stakeholder analysis while formulating new strategy can be assessed in the following manner. The stakeholders of the company are its customers, employees, government, shareholders and suppliers. It is important for the company like Apple to carry stakeholder analysis while it is formulating a new plan. This analysis is significant as the through the company can know the interest of its customers (Stonehouse and Houseton, 2005). When the business will be able to know the taste, preference and needs of its customers then it can make business plans as per their needs. Employees plays major role in executing a strategy. Through stakeholder analysis Apple can devise the plan as per the understanding of people working in the corporation. Moreover it will also provide information about the level of motivation staff required in order to adopt changes in business plan. Through stakeholder analysis Apple can know which stakeholders are relevant to the new strategy (Ulwick, 2005). That means it can know the stakeholders which can be impacted or which can impact the formulation of new strategy. Along with this, stakeholder analysis assists the corporation to identify the conflicts between the interests of various stakeholders which may occur in future while formulating business plan. Thus stakeholder analysis is highly important when the company is formulating its new plans.
In order to formulate a new strategy the company needs to change its vision and mission. These mission and vision so formulated are required to be as per the needs of stakeholders. That means that all the stakeholders associated with company would be befitted. The goals and objectives in the new strategy will resolve the problem relating to pricing issues. In order to achieve success on the new plan Apple needs to bring products which are required by its customers (Trim and Lee, 2006). It needs to increase in product breadth. For executing new strategy company will require skilled employees and financial resources. Need of specific capabilities, knowledge and skills are also essential while designing and implementing new strategy. This plan can bring success to organization as it will help Apple to resolve it various issues.
There are various alternative strategies available to Apple such as market entry, substantial growth, limited growth and retrenchment strategy. Analysis of the following is carried out as under:
Market entry strategy: It is comprised of the plans which can be used by the firm to discover new market for existing product. Apple can enter new market segments by mergers and acquisition or by joint ventures. Adopting such strategy can help the business to grow as it can diversify its operation in new markets through these strategies. Mergers and acquisition can be helpful for the Apple as it can merge with a company and can bring innovation in its product (Langenberg, 2007). Moreover by doing this the company can increase the range of its product.
Substantive growth strategy: This strategy can be useful to business as through this firm can expand and diversify. Expansion can be done by introduction of new product for existing market segment or by development of new market for existing product. The firm can plan to diversify in related and unrelated activities (Business strategy, 2014). Diversification in related activities will help the business to expand in existing product line whereas diversification in unrelated activities will assist the Apple to grow its operation in various product lines. These plans will require huge cost to be put in by the corporation (Kruger and Mama, 2012). Also there is a huge risk involved with this.
Limited growth strategy: Apple can adopt such strategy by market penetration. With this strategy firm can increase its market share (Advantages & Disadvantages of Limited Growth Strategies, 2014). Market penetration is done by reducing the prices of the product in order to attract more customers.
Retrenchment: Under this strategy the firm can grow by liquidation or divestment. Liquidation means the company shut down its business unit which are loss bearing (Mwalenga, 2014). The company can also use divestment strategy whereby it can sale the asset or the business unit which are not profitable and not in use.
Apple can adopt the strategy of limited growth wherein it will require limited financial resources. Justification on the selection of this strategy can be as follows. Under this strategy Apple can adopt for market penetration. This can be done by reducing the prices of product. As Apple products are seemed to be luxurious so every class in society cannot afford its product. Moreover because of economic down turn purchasing power of the individual has decreased. Apple can increase its market share by reducing prices of its product so that it can attract more prospects towards its products (López, 2005). Under this strategy the company can also plan for new product development. With the new product development the business can increase the extent of product line it is offering to its existing market segment. Advantages of adopting such strategy can be that the business will require less finance. That means it will have less debt and less liability upon it in order. This strategy will help the business to expand with the available resources and has less risk factor (Ghezzi, 2013). If the business will adopt limited growth strategy then its investor will put less pressure on it to grow faster. Business can easily manage its operations when its plans for limited growth. It can be difficult for Apple to manage its existing and future operation when it adopts strategy which has rapid growth. Implementing such strategy will help Apple to position itself as an innovator. Moreover bringing innovation can help the corporation to succeed long run course of business.
Implementation of strategic is crucial part in strategic planning process. The execution of strategy affects the roles and responsibilities of employees who execute it. The role of the top management is to communicate the strategy to different levels. The role of manager is to convey the strategy to subordinates. Manager is responsible to observe the performance of the employees (Galbreath, 2009). They are required to provide guidance to the employees. In case of strategy failure they are accountable to the top management. Along with this manager conveys the strategy to various departmental heads. The role of the operational level employees is to understand the way how strategy has to be implemented. They are responsible to their managers in case they do not fulfill the job as per requirements. Lower level plays major role in Apple as real execution of strategy is done by them.
In order to implement limited growth strategy Apple will require following resources:
Financial resources: To perform the strategy the company needs financial resources such as money. In order to make new product for existing market funds are very essential. Apple can evaluate the funds which it has already such as retained profits. In order to grow the firm can also borrow the funds from outside in case it has not enough of funds internally (Eigenhuis and Dijk, 2007).
Human resources: Human resources are very important while implementing strategy. The company needs employees that possess the necessary skills in order to implement the new strategy (Allio, 2006). If not then Apple can organize training session for the personnel.
Technological resources: Apple needs to analyze the whether or not it possesses the necessary technology which is required in order to implement new strategy.
In order to achieve success on strategy implementation Apple needs to set SMART objectives. These objectives are those which are specific, measurable, attainable within the cost, relevant and time bound (Belohlavek, 2011). These objectives will help the company to overcome issues which obstructs strategy implementation. If smart target are set then company can avoid confusion as they are specific this will lead to success of strategy. When the goals are measurable then Apple can reduce the risk of failure by improving its performance. Smart target can help the business to attain success within the time frame. Strategy implementation will succeed when the objectives set are relevant to it. Apple can formulate smart target so that it can achieve profits in short run. Moreover if corporation form smart target then they can reduce the risk related to uncertainties thereafter it would result in success of strategy implementation.
1. There are various kinds of topics discussed in the class. It comprises of following such as business strategy, importance of strategic business plan, roles of different types of tactics such as market entry, substantive growth and limited strategy along with the responsibility of personal in the process of strategy implementation etc. This has helped me a lot in terms of enhancing my understanding with respect to the varied type of business strategies can be used in an organization and how the identified strategy can be implemented in an enterprise.
2. The article as given by author on the topic named as Apple premium pricing strategy and product differentiation has helped in terms of improving my knowledge in an effective way. I appreciate the ways that author has used with an aim to present the business strategy of Apple. On the other hand, article has properly discussed the benefits of identified strategy in an organization. The point discussed over here clearly explains importance of differentiation and premium pricing related tactics.
3. The process of preparing this report has helped me a lot in improving my understanding with respect to how strategies are framed within an organization. I have also improved by knowledge with respect to the technique used by the managers of an enterprise when they comply with the practice where they formed strategic plan in corporation. However, there are some difficulties are being faced by me during the process of preparing the portfolio. It is related to in ability to access some sites of selected corporation named as Apple and it is because of the presence of such type of limitation only content and quality of portfolio has hampered in some sort of way. On the other hand, with an aim to assess information on the given topic I have used both sources of collecting information such as primary and secondary etc.
It can be concluded from the study that strategic planning is key for organizational success. There are various factors such as organization culture and its structure which are to be considered while formulating a new strategy (Bonomo and Pasternak, 2005). In order to develop new strategy Apple can use technique such as SWOT analysis, scenario planning etc. It is also evaluated that stakeholder analysis is important while formulating new strategy. Through this firm can plan strategy as per need of various stakeholders. There are various strategies available such as substantial growth, market entry which the firm can adopt in order to grow and expand its business operation. Lastly Apple is required to analyze financial and human resources so as to implement the strategy.