Apple Company
Introduction
Apple inc. came into being during the April 1, 1976; the company was incorporated during the January 3, 1977, as Apple Computer Inc. Apple Inc. is one of the key players in the computer and digital electronic industry. It is a multi-national corporation based in the United States; it focuses on the design of computer software, hardware and various brands of consumer electronics. Some of the most common products in the market produced by Apple Inc. include Macintosh computers, iPod, the iPhone and the iPad (Young 2005). Apple also various brands of computer software suites in its list of products. After thirty years of business, the company rebranded from Apple Computer Inc. to Apple Inc. to denote the diversification of its product ranges from computers to include diverse ranges of consumer electronic. Currently, Apple has at least 46000 full time employees and more than 2800 employee on the rest of the world. During the 2010 fiscal year, the company’s total sales amounted to approximately USD 65.23 Billion. Over the course of its business operations, Apple has managed to build a strong customer base on the consumer electronics industry; this is because of factors such as the company’s philosophy with regard to its distinguished advertising methods. Despite the company’s success in computer and digital electronics industry, there company has faced various criticisms concerning its business practices, contractors’ labor and the company’s commitment to environmental sustainability. This paper presents a critical analysis of Apple Inc. business environment, corporate and business level strategies (Young 2005).
Apple Inc. stands out as one of the most successful companies that were formed during the 1970s. An important aspect of the company is that its corporate culture is based on the conventional approaches to what organizational culture should entail. Initially, Apple did not embrace competition as evident by their key competitor, the International Business Machine (IBM) at the time of its formation. The company’s strategy aimed at differentiating itself from its competitors. This differentiation saw the company refuse to develop products that matched the industry’s standard requirements, instead, the company developed products that were distinctively different from those in the market. This approach to differentiation was an effective strategy that resulted to the company’s initial success after its formation (Leavitt 2007).
The incorporation of the company after its formation was a critical success factor for the company. Accompanied by diverse product launches, the company earned a name in the digital and computer industry. The company recorded a major breakthrough in the business world during their launch of VisiCalc Spreadsheet application program. VisiCalc spreadsheet increased Apple’s market share in IT compared to their key competitors IBM and Microsoft Corporation. By the end of the 70s, Apple had established itself in the computer industry (Leavitt 2007).
Despite Apple initial success, their differentiation from standard industry platforms can be argued to the cause of the company’s problems during the 1980 and 1990s. A typical example of this is due to their development of their Apple II business machine that performed poorly in the business market. The onset of the 1980s implied that Apple Inc had to change its marketing strategies. During 1982, Apple launched the first personal computer but performed poorly due the high price of the computer (Deutschman 2000). The following product launches witnessed initial success but follow up sales were not effective. The short-lived success was due to Apple’s creativity that saw the company engage in multiple product launches. However, maintaining market strength was a major problem for Apple. This is significantly due to the high prices of their products and ineffective follow up strategies of the company. Apple’s innovation saw them pioneer the Desktop publishing market, which was one of the critical success factors for the company. This is due to its advanced graphics and ease in user capabilities compared to other products available in the market. Having realized the bottleneck in their sale due to high price tags, Apple adopted the development of low cost products, such as the development of the first Laser Printer, which was offered at reasonable prices (Colvin 2009).
Internal infighting within the company is also one of the significant causation factors that hindered the success of the company in its early years of business. This was practically evident between the years 1981 and 1985, whereby Apple was concentrating on computer projects that would be released to the market at lower prices. Internal wrangles within the company resulted to corporate wars that almost jeopardized the project. This was evident between Apple Lisa’s corporate shirts and Steve Jobs faction called the pirates. The infighting was to determine which product between Macintosh and Apple Lisa would be shipped and released to the market first. The Company decision resulted to the release of Apple Lisa, but again, the marketing strategies were not effective enough due to the high price tags and in ineffective product development that resulted to limited software capabilities, which did not match the price that the computer was selling. During 1984, Apple launched the Macintosh, which is currently considered as playing a critical role in the company’s success during the years that followed. Just like past product launches, the initial Macintosh sale were high, but follow up sales strategies were not effective, resulting to short-lived success of the product. Power struggles were a characteristic of the company’s top management (Wozniak & Gina 2006). This was evident during 1985 due to the differences between Steve Jobs and the Chief Executive Officer. John Sculley. Steve Jobs focused on launching untested products that had high price tags, while the Board of Directors was thinking otherwise. This differences saw Steve Jobs attempt to overthrow Sculley from the executive position. This resulted to Job’s resignation and formation of a rival company, NeXT Inc. It can be said that internal rivalries within the company was one of the factors that hindered effective decision-making and ultimately the success of the company (Wozniak & Gina 2006).
The period between 1986 and 1993 saw the company reinvent its products in terms of prices and product orientation especially after the Macintosh Portable performed poorly in the market due to the size of the computer. Apple redesigned the Macintosh Portable to PowerBook in order to eliminate the ergonomic issues associated with the previous designs of their products. The same year saw Apple upgrade the software capabilities of its Operating system to improve usability and user experience by adding color. This reinvention strategy was a milestone to the success of the company as it resulted to increased revenue for the company. It appeared as if Apple Inc. was at the peak of their productivity; since almost all their strategies were successful, coupled with product released that did well in the market resulting to increased profits and distribution of new products (Frank 2000).
Concurrent product releases by Apple did not seem to be successful, especially after the company witnessed the success of the PowerBook, Macintosh LC and Centris. The drawback associated with concurrent releases in different configurations confused the consumers of Apple products. According to Apple, different product configurations implied that the company was segregating itself to other competing brands such as Sears and Wal-Mart. Product differentiation from other competing models was catastrophic for Apple because of the consumers could not differentiate the models. At the same time, Apple attempted to diversify their products to targeted consumers such as digital cameras, video consoles, speakers and other digital electronics appliances (Colvin 2009). The failure of this product diversification strategy can be attributed to unrealistic market predictions by the Chief Executive Officer, Sculley. This strategy had a significant effect Apples market share in the computer and digital electronics sector, especially after the company had established a strong customer base on computing devices. The adoption of ineffective marketing strategies by Apple was an advantage to Apple’s Chief competitor, Microsoft Corporation. Microsoft was focusing on the development of cheap and interactive computer software for personal computers, while Apple was focusing on the development of expensive and richly developed computer software. The strategic plan by Apple was to depend on high profit margins and not numerous product sales. This did not report a positive response to their products and as a result, the company’s profitability and stock prices continued to go down. Apple Inc. should have focused on customizing their products to meet the requirements of both high-end and low-end products rather than ignoring the potential of low-end consumers; an opportunity that Microsoft capitalized to become one of the most profitable companies in the computing industry, beating Apple despite its strong customer base and richly developed computing devices. In addition, Apple’s management witnessed a series of product flops and late deadlines that tainted the reputation of the company (Colvin 2009).
After subsequent product failures and a reduction in the profitability of the company, Apple embarked on a reinvention strategy between 1994 and 1997. Apple strategy was to develop product alternatives to the Macintosh, since it was most successful product to be ever launched by Apple. The most significant drawback that the company failed to put into consideration during the development of its strategy was that the Macintosh was becoming outdated, considering the dynamic nature of the Information Technology. In addition, the company was under tight competition from new comers in the industry such as Sun Microsystems and OS/2, which were more developed to meet the computing requirements of the consumers compared to the Macintosh platform. This meant that Apple’s major product line was to undergo a significant overhaul and massive development in order to meet the current technological requirements (Colvin 2009).
In order to upbeat the competition, Apple embarked on partnership with other players in the computing industry. This saw the company partner with IBM and Motorola, which was later called the AIM alliance. The goal was to revolutionize computing technologies that would use the hardware from the IBM and Motorola and software from Apple. The main agenda behind the partnership was to upbeat the intense competition from Microsoft. This strategy was effective, but Apple did not put into consideration the requirements of the low-end consumers, since the AIM alliance opted to develop more powerful and portable computers, which were more expensive; instead of developing powerful and cheap desktop computers that Microsoft was investing in heavily. Several attempts to reinvent the Macintosh failed, meaning Apple had to deploy effective organizational structures in order to regain the company’s profitability. This saw the company made experience organizational restructuring characterized with massive layoffs and top management reshuffles that saw the company purchase Steve Job’s NeXT inc. in order to reinstate Jobs as the company’s advisor. Later strategies that the company deployed were aimed at restructuring the company’s product lines. For instance, during 1997, Steve Jobs fostered a partnership with Microsoft in order for Microsoft to develop versions of Microsoft Office that were compatible with newer versions of Microsoft Office. Apple adopted new approaches to its manufacturing strategies such as the build-to-order strategy using the Apple Store (Colvin 2009).
Apple’s return to success can be attributed to the new marketing and product development strategies that saw the company redesign its Macintosh to iMac, and later development of other consumer devices such as the iPod and the iPhone. The challenge was to maintain the newly acquired success of the company in order to avoid previous associated with ineffective follow-up strategies. Apple deployed effective marketing strategies that resulted to the iMac selling approximately 800 000 units during the initial five months of its launch. Apple strategy to maintain the regained market share was through various partnerships in order to establish a consumer oriented marketing platform. For instance, Apple Inc. bought Macromedia’s software used in video editing called Final Cut, expanding the Apple’s market into video editing market. Apple influence in the video editing sector increased in the following years following its release of the iMovie and Final Cut Pro, which is one of the most popular video editing software. One of the most effective strategies deployed by Apple was to focus on a particular domain of product line, as for the case of video editing applications. Product diversification and specification played a significant role in ensuring Apple’s re-entry into the computing and consumer electronic market. In addition, Apple Inc began to develop products that met all the needs of the high-end and low-end consumers. For instance, the MAC OS X combined all the requirements that professionals and ordinary consumers would need in a computer application (Colvin 2009).
The period between 2005-2007 saw internet collaborate with Intel in order develop computers that were powered by Intel-based processors. This decision by Steve Jobs was a redesign of the company’s products in order to eliminate the differences in the industry standards. This period saw Apple success as reflected in the price of its stock and the surpassing of Apple’s market cap to that of Dell, which is also a major product line in the computing industry. Apple’s market share has significantly increased during this period, although it did not manage to upbeat Microsoft’s dominance in computing technology. Another successful strategy by the company was the recent developments in product diversification to shift attention away from the initial focus on computers. This resulted to the development of mobile devices and consumer electronics such as the iPhone and Apple TV. The post PC of Apple denoted the company’s profitability (Wozniak & Gina 2006).
An overview of the history of Apple Inc. reveals that the down falls of the company is due to the ineffectiveness of the company’s corporate strategies. Corporate decisions and marketing strategies deployed by Apple were ineffective during their deployment. For example, the unrealistic market forecasts of 1992 that resulted to product flops, late deadline and a tainted corporate image that made Microsoft Corporation took advantage of that opportunity to increase its market share. The return of Steve Jobs can be argued to be the return of profitability to Apple Inc. Each of the executives at the company had different perspectives towards the success of the company. The onset of the 21st century coupled with the return of Steve Jobs to the company was the dawn of Apple’s success after a series of product launch failure and misappropriates corporate strategies. In addition, the company product diversification to invest in consumer electronics apart from computers was a critical success strategy for the company. In addition, the company embraces innovation by attracting one of the best minds in the computing technology industry (Frank 2000).
There are various ethical concerns regarding the Apple’s corporate decisions. Apple has been for a long time been criticized regarding its commitment to environmental sustainability due to their continued development of hardware components using components that cannot be recycled. In addition, there are toxins in the hardware of their iPhone. Apple’s environmental concern is due to the inclusion of chemical toxins in their products. These chemicals are somewhat dangerous to human life. The company requires implementing policies that aim to promote environmental sustainability through elimination of toxic elements in the design of their products. The realization of success by the company implies that the company has the corporate responsibility of ensuring environmental sustainability and putting into consideration the negative effects that the company’s products have on its consumers (Wozniak & Gina 2006).
Despite the need to achieve high success levels, the company’s labor practices have been under criticism due to the working conditions of the company’s factories. The criticism of the company’s labor practices is due to the allegations concerning the company’s concern to the needs of their laborers. For instance, one of Apple’s plants that manufactures iPod and other consumer electronics houses about 200000 workers in the same facility, yet some of the workers are reported to earn approximately $ 100 per month. In addition, the company policies require that the workers should live on the company premises, yet they pay rent to the company. Violations of worker’s rights is a common protocol in most the plants owned by Apple (Colvin 2009).
Conclusion
It is widely evident that the various phases of Apple’s growth depend on the corporate strategies and the corporate management. Corporate strategies are an effective approach to fostering success corporations. This is widely evident by the departure and the return of Steve Jobs to Apple Inc. The period that Steve Jobs was absent in the company resulted to lot problems in the company as evident by unrealistic market predictions, product launch failures and missed opportunities that resulted to a tainted corporate image. This translated to negative financial impacts to the organization that saw the stock prices reduce.
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