Physical address
Introduction
Operational activities are critical component of businesses and organisations. Business ventures are started to provide services and products to clients. The operation is concerned with transformation of available resources into outputs which include products and services. Therefore, the management of company operations is crucial. The operation management involves planning designing, and monitoring the production process and improving systems and structures for purposes of achieving high efficiency. This requires a strategy which outlines how an operational objective is to be achieved. This report uses Apple Inc as an organization of my choice. The report will address various issues as will be outlined below to the CEO of the company. However before we continue, it is prudent to analyse the history of this organization.
BODY
Company history
According to Nancy and Nancy (2006), Apple Inc is a multinational electronic company based in California in the United States of America. It was incorporated in the United States under the name Apple Computer Inc with Steve Wozniak and Steve Jobs as the directors. Due to shift in production from computer manufacturer to digital and communication developer, the company changed its name to Apple Inc in 2007. Today, it has grown its portfolio to include designing, producing and marketing of consumer electronics. Its products include computers, smart phones, software such as OS X and iOS and media devices like Apple TV.
Although Apple had been crippled by operational inefficiencies at initial stages, its journey towards becoming the leading technology firm in America is phenomenal. Indeed today, Apple Inc. is the most capitalized technology company in America with market value of US dollars 659 billion. This exceeds the combined value of its competitors, Microsoft Corporation and Google Inc. While some analysts attribute this success to the adoption of market led operational strategy, others associate it with the late former Chief Executive Officer, Steve Jobs exceptional managerial skills. Immediately after assuming office in 1997, began to restructure the production line. He focused on improving existing product models to suit clients ever changing preferences. As a good innovator, he steered the firm in the production of Apple’s most liked products such as iPhone, iPod and iPad.
Organization SWOT analysis
Apple computer design, manufacture and market personal computers and other related apple products and services such as software and networking solutions. The company’s strong operating performance has greatly strengthened its market position and also increased investor confidence. Despite being one of the successful companies in the United States of America, Apple Company is likely to face intense competition from the other companies that offer almost the same product; hence could affect its profit margin. The following diagram represents a summary of the SWOT analysis of the company.
Strengths
Global presence
Apple has global presence spanning the America, EMEA, and Asia pacific. The company revenue is derived from regions outside United States of America. Balanced presence both in mature as well as the emerging markets has enabled the company to record a steady revenue growth.
Apple brand.
The apple brand is well regarded amongst most consumers both in America and outside America. Apple do leverages its brand image to differentiate its products so as to drive sales. Its strong brand enables it to create barriers to entry into the market. In addition, it enables it to create and command premium pricing for its products in the market, giving it a competitive edge over its competitors such as Sony and IBM.
Synergetic portfolio.
Apple company design, manufacture and markets personal computers and other related products and services such as peripherals and networking solutions.; portfolio which is highly synergetic in nature. The company also manufacture and designs variety of products such as audio books, music videos and short films. Such wide variety of products reduces its dependency on single products.
Strong media content
The growth of company’s products such as iPod and iTunes has been great success story in recent times.
Weaknesses
Low returns
In recent years, the company recorded low returns compared to the previous ones. This has significantly reduces its margin profit.
Opportunities
Wireless products
There has been a significant increase in the demand of wireless products across the world. Since the company produces a lot of wireless products, it is ideally positioned to capitalise on its growth. For instance, Airport is a wireless networking technology which allows users to create a computer network and connect to the internet without cables.
New digital platform
Apple’s main focus in recent time is to transform its Mac Platform into a digital hub which combines iTunes video content to customers’ television screens and other portable devices. This new platform will greatly enhance Apples rapidly growing digital content business.
Threats
The company faces stiff competition in various areas of business from other companies such as Sony and IBM. The market for the products that the industry deals with is very competitive.
Slow Eurozone
The economic crisis that hit most of the world markets greatly affected the company. The slowdown was accompanied by a higher oil prices in the world market. It is estimated that such crisis could reduce spending in information technology products hence adversely affecting the gross profit margin of the company.
Apple design, manufacture and markets personal computers for sale and other related products and services such as software and networking solutions. Some of the key products and services offered include the following:
Hardware products:
Macintosh computers
iMac
iMac
Music products and services:
IPod
iTunes music store
Internet software and services:
AirPort Extreme
AirPort Express
These are just but a sample of products and services offered by the Apple Company. For the case of this report, the paper will discuss three environmental variables and three physiological variables which affect the consumers’ decision making process while choosing this product (Apple personal computers).
Environmental variables
Competitive environment; as mentioned earlier, Apple Company is currently facing stiff competition from different companies such as Sony and IBM and other PC providers like Dell and Hp. Consumers have a wide variety of personal computers to choose from hence influencing their decision on what company to choose from. However, because most of the Apple PCs are very expensive, some consumers may decide to buy the other cheap personal computers which may be available in the market.
PRICE; most of the consumers are likely to make decisions based on the price of the products. Since variety of computer products exist in the market, the average consumers will go for the low priced personal computers as opposed to the high priced Apple product.
Technology; change in technology affect the consumer decision to buy a product. Technology is associated with high quality product; such product greatly affects the consumer decision. Since the Apple Company produces variety of products that is in line with modern technology, they are likely to attract a big customer base both locally and outside the domestic market. For instance, Airport is Apple’s wireless networking technology which allows users to create a computer network and connect to the internet without cables. Such products attract a big customer base.
Physiological variables.
Attitude; various customers both locally and outside the domestic market prefer Apple products irrespective of their prices; they believe that Apple products are of high quality. We can therefore acknowledge the fact that the Apple brand is well regarded amongst most consumers both in America and outside America. Apple do leverages its brand image to differentiate its products so as to drive sales. Its strong brand enables it to create barriers to entry into the market. In addition, it enables it to create and command premium pricing for its products in the market, giving it a competitive edge over its competitors such as Sony and IBM.
Social factors; various social factors influence the decisions made by customers in their pursuit to purchase products. For instance, consumers seek to imitate people they admire and are likely to buy the same brands as their favourites. Therefore, social factors will tend to influence the decision made by various clients both at the local market and foreign market. Different clients therefore will make their purchasing decisions based on the decision made by the people they imitate.
Cultural influences; cultural influences is to do with beliefs, values, rituals and norms. The belief that certain products are better than others tends to influence the decision made by consumers to purchase Apple personal computers. Since many people believe that Apple products are superior compared to other related products, they are likely to make their decision based on that belief.
Marketing mix are tools which the organization uses for the purposes of marketing their products, they are commonly referred as the four Ps for marketing and they include product, place price and promotion.
Product/service
Consumer preferences is never constant, they keep on changing from time to time. Therefore, the organization has to keep on changing with the change in needs and wants of the customers. However, to ensure that the consumer needs and wants are taken care of, the company has constantly come up with different types of personal computer products that suit the needs of different customers. Because the company had initially developed brand loyalty, the company has been able to charge premium price without necessarily losing its loyal customers.
Suppose the organization wants to extent its geographical coverage, the following will form some of its objective:
Despite the fact that the company might find it difficult to offer premium price in the new geographical location, the company can ensure that it win the loyalty and trust of the clients in the new geographical location by maintaining the flow of superior products compared to its competitors. After winning the customers’ trust and loyalty, the organization can go ahead and set premium prices for its products.
Assuming that the foreign market in which the organization is trying to extend its roots is Kenya, the following are some of the behavioural trends and patterns that will affect the consumers buying behaviour:
Price; most of the consumers are likely to make buying decisions based on the price of the products. Since variety of computer products exist in the market, the average consumers will go for the low priced personal computers as opposed to the high priced Apple product. Since majority of Kenyans are middle income earners, very few people might bought the products.
Attitude; most of the customers especially the high income earners prefer Apple products irrespective of their prices; they believe that Apple products are of high quality. We can therefore acknowledge the fact that the Apple brand is well regarded amongst most consumers both in America and outside America. Apple do leverages its brand image to differentiate its products so as to drive sales. Its strong brand enables it to create barriers to entry into the market. In addition, it enables it to create and command premium pricing for its products in the market, giving it a competitive edge over its competitors such as Sony and IBM. This is why despite Apple products being expensive, still most of the clients especially the middle and high income earners and also most of the youths prefer them irrespective of their price.
Cultural influences; cultural influences is to do with beliefs, values, rituals and norms. The belief that certain products are better than others tends to influence the decision made by consumers to purchase Apple products in Kenya. Since many people regard Apple products as being of high quality, most of the middle and high income earners are likely to go for the Apple products because majority of Kenyan prefer high quality products irrespective of their prices. Therefore, the product quality is likely to affect consumer buying trends and patterns.
Apart from the above mentioned behaviour buying trends and patterns, macro-environmental factors are also likely to affect consumer buying patterns. Some of the macro-environmental factors that affect consumer buying behaviour include the following:
Technological change; Change in technology affect the consumer decision to buy a product. Technology is associated with high quality product; such product greatly affects the consumer decision. Since the Apple Company produces variety of products that is in line with modern technology, they are likely to attract a big customer base especially the youth. Therefore, technology is likely to affect the consumer buying behaviour because most of the youths prefer products that are in line with the current state of technology. Products like iPod and iPad have gained a big market in Kenya especially from the youths.
Economic factors; the inflation that hit most of the Kenya’s financial institution following the 2007/2008 post election massacre greatly affected the consumers buying behaviour. It is estimated that the Apple products bought reduced significantly during the period since the consumer purchasing power was reduced greatly.
The two theoretical factors that underpin globalisation include: technology and regulation
Technological innovation; the change in technology is accelerating the globalisation process. By the use of new technology, different people across the world can now get connected and transact business. This is justified in this organization because technology has enable the company distribute and market its products in different parts of the world.
Regulation is another factor underpinning globalisation; regulation has created an enabling role for globalisation because it has enabled the existence of supraterritorial links that connect different parts of the world hence creating an enabling environment for the distribution of goods and services across the country.
Capitalism is another theoretical concept that underpins globalisation. According to Karl Marx (1859), capital drives beyond every spatial barrier to conquer the whole earth for its market and more specifically the global market offer increased profit to the organization as a result of increased sale volume. In addition, the larger productions run to occupy the global market because of the benefits associated by it hence contributing to globalisation. We can say that capitalism is justified in the organization because most of the products and services offered by the organization have been made available in the global market so as to increase sales.
Explain how the following elements will affect the organisations international business management process
International Human Resource Management:
Well managed human resource will affect the business by adding the value to the organization internationally. The human resource experts are great source of good advice that might affect the organization positively. For instance human resource experts advice managers how to take a sensitive approach to different problems with employee performance such as how to effectively coach week performers and how to correct inappropriate behavior. Such advice is important if the organization is to continue increasing its customer base.
International marketing
International marketing will call for a better management team; therefore, the organization will have to spend more in order to employ highly qualified personnel to manage international marketing. Failure to employ experts will see the business losing its international market share.
International Logistics
Logistics can be defined as the management of the flow of resources from the point of manufacture to the new destination. So international logistics will affect the business in various areas such as: marketing and distribution. For is there is good international logistics there is likely that the company will easily market most of its products internationally.
Conclusion
The success of Apple Inc is a pointer to the fact that its operational strategies are realistic practical and appropriate. The corporation has continued to register a positive growth in revenue despite operating in a sector characterized by stiff competition and high capital investment. Its investment in key areas such as research and development, distribution channels and technology promises good future returns and sustainability. The outsourcing of labour intensive operational activities like manufacturing is well informed cost cutting measure. However, the poor performance of company products in Africa and Middle East market raises a lot of questions. Perhaps the company is not doing enough to markets its products in these regions. This is an operational issue which should be fixed through the establishment of distribution channels targeting the regions. Finally, the company should consider producing low cost electronic products for developing nations.
References
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Ruggles, F.W.1991. Apple: certain conditions of competition between US and Canadian industries. Washington: USITC Publication.
Saxena, J.P., 2009. Production and operation management. New Delhi: MC Graw Hill.
Lashinsky A.2012. Inside Apple: How America's Most Admired--and Secretive--Company Really Works. U.S.A: Grand Central Publishing.
Lusted M.A. 2012. Apple: The Company and Its Visionary Founder, Steve Jobs.U.S.A: ABDO.
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