Apple – Describe the Key Strategic Challenges Facing Apple Computer
Ayomipo Burch Williams Loelius Strategic Management Concepts & Cases 07/22/2011 * Describe the key strategic challenges facing Apple Computer. * One of Apple biggest key issue will be the rate that technology is growing and the ability to keep up with and also the prices at which there products are sold for; they are face with constant new arrivals at prices that are more affordable especially in today’s economy where everybody is looking for ways to save money.
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They are also faced with having to maintain its marketing, relationship building and brand management techniques as they spread into a much wider market, gaining a much larger customer base that includes a lot of more diverse customer. Technology and entertainment industry is constantly evolving; there are some doubts if apple will be able to maintain the reputation of its brand, their exclusinve design and constantly able to put something new out in the market that will keep catching their consumer’s attention and justify why they would rather spend the money on a Mac instead of the much more affordable brands.
The company has a lot of advantages by being able to keep software and their markets private, meaning if you bought a mac computer you will still have to purchase a software through them, I just bought me a mac about a month ago and now am starting to realize that more affordable software’s are not compatible with the computer. The company has been able to brand and market itself and maintain a reputation that makes it consumers return for more exclusive offers that none of their competitors can offer, while securing its media contents. Describe the dimensions along which company success can be measured.
Success can be measured by the company’s cash flow, they can maintain an adequate cash flow by differentiating between their short time and longtime goals, also by doing this you can take your time in evaluating product to make sure consumers will remain interested. Another measure of success is by evaluating their alliances. They have a contract with the 5 major music recording company for iTunes, they also have contracts with the 2 biggest wireless company AT& T and Verizon wireless for the iPhones, their Mac computers can also only be found at one of the biggest istributors of electronic, Best Buy. * Describe the critical external and internal environmental factors that have strategic implications for Apple’s future. Internal factors include their marketing style, the company is known for having strong marketing skills and commercial, their ability to develop and implement new products that are appealing to their consumers, their research and development teams, their alliance with other companies, including the 5 major recording companies in 2003, that gave them exclusive right music content creating iTunes.
Their strengths internally includes the iPod which has the largest market share of 70% and a net profit of $3. 5 billion when it comes to digital music while their competitors on that on holds 8%, they also have total control over their suppliers and distributors. They were also the Exclusive brand management and reputation for brand development that continues to obtain customers through well planned and carefully executed marketing strategies, exclusive partnership with recording companies.
One other advantage that apple has when it comes to their customers is the ability to keep safari safe from internet hackers, all their hardware and software are internally made and that gave then a good base of devoted customers, and they also invented a lot of time in training their employees when it comes to customer service.
Some of their weaknesses are that software are usually not compatible example include the music format on their iTunes, they hold less than 5% of the computer market, 1% of the phone market, the computer is still solely basis it success on Jobs vision, they need to start investing in more training people in coming up with ideas for the company, creating a succession plan. Externally the company faces ample amount of competition, they face competition in all areas of their business adventures, phones, computer, and music, the industry the company is in is a constantly changing industry because of the level of technology.
More company is finding ways to provide the same level of technology but at a much more affordable price. It is a common practice in order to stay in competition that manufacturers cut their prices to adjust with what the average consumer is willing to pay, but Apple has remained constant in what they are willing to sell their products for, and they are losing out on a lot of potential consumers. The company also face a lot of competition when it comes to their music products because more and more company are now able to gain the same contract with recording ompanies to provide the same service at a cheaper rate. Other factors also include performance, availability and distribution. Describe how Apple’s strategy stands up against industry rivalry Apple stands up against its competitors by having a very strong marketing strategy and by constantly reminding their consumers why spending more money can give you more in a product. The company is known for their products to be unique by carefully evaluating and testing their products before releasing them for sale.
They carefully evaluate the designs and steady looking for ways to be different from their competitors, they believe if they remain different it will increase their chances of brand loyalty, meaning if you getting Apple computer, you already know what you getting. They also compete by placing their primary focus on their consumers wants and needs and not the market place traditional products. The company is also involve in many different market, gives them profits from different market just in case one market fails.
They also have a competitive advantage because they have an exclusive distributing contract, you cannot purchase an Apple product just from any distributor. The company has also manage to expand it self globally, to gain a much more diverse group of consumers. Describe the recommendations you would make to enhance the effectiveness of the company’s strategy or to change its strategic approach for better results.
Some recommendations that can boost Apple reputation include stay in the high end market as they have been, do no invest too much time in lower-end market, this can tarnish their reputation as a high end, high technology manufacturer, keep a steady management on brand exposure, and continue to strive ahead of the game by remaining different, keep on maintaining and upgrading their designs that keep attracting their consumer.
The company need to keep in my mind that the industry that are involved in is always changing due to technology, so constantly perfecting and improving their technology, keep on expanding their range. Steady improvements on their current product en example will be the iPhone, then they released better versions such as iPhone 2, 3 and 4, iPhone 5 is expected to be released in the near future.
Improving their security and not letting another competitor be able to re-release any of their software or copy from it. The company should also continue studying what consumers preferences are since they are now moving into a global market and every market has different demand. Develop a good and effective management team and a successor plan that has been tested and proven. * * * References Case 14: Apple’s Computer Inc. Maintaining the Music Business While introducing iPhone and Apple TV