How the theoretical concepts of management are implemented in Apple Inc: Impact on corporate objectives

Author: Iloka Benneth Chiemelie
Published: 25th March 2017

Introduction

In 2011, Apple Inc., which has a market capitalization of over $600 billion as of 2012 (Lashinsky, 2012) was described by the president of the United States, Barack Obama, as one of the most successful companies on planet earth that have significantly contributed towards information revolution, not only by making it more fun but also by making it more accessible. Added to this, he also described Steve Jobs, one of the founders of Apple Inc., as America’s greatest innovator and also as an example of what American inventive talent is all about (Knop, 2011).

In view of the above understanding, this paper is designed to understand how the theoretical concepts of management are implemented in Apple Inc., and how these concepts have helped the company to develop their desired core objectives over the years.

Industry attractiveness

The concept of industry attractiveness deals with how the expected returns that companies in the industry will gain. It covers the needs of consumers and how the industry is able to fulfill these needs as well as the value that the company will be creating for its assets by fulfilling these needs (Decker, 2013). In the right industry, companies are able to ensure sustainable performance by offering the right products and services for the right price. That is to say, the products and services must not only meet the needs of the consumers, but should also be more affordable than that of the company’s competitors.

Resource based view

The concept of resource based view is used to identify the internal competence of a company in the course of formulating its strategy towards gaining sustainable competitive advantage in the industry it operates in (Henry, 20008). Companies are built in relation to their resources and capabilities, which can be managed and reconstructed in order to provide such company with desired competitive advantage. Additionally, the internal capabilities of a company does determine the strategic choices that such company makes, and the company is able to ensure successful competition through these strategic choices. That is to say, what the company has inside, is what it can give the market outside (through quality products and affordable prices).

Competitive advantage

In line with view presented by Barney (1991), companies are able to attain sustainable competitive advantage by adopting the right strategies designed to exploit its internal strength, generate the right response to environmental opportunities, and also neutralize external threat while avoiding internal weaknesses. The concept of sustainable competitiveness suggests that it is important to understand the sources of sustainable competitiveness in a company, and they can be found by conducting an analysis of the company’s opportunities and threats within its business environment.

How these theories influence strategic management in Apple Inc.

The success of Apple today is mainly due to the above theories. In the concept of industry attractiveness, Apple Inc. is operating in the telecommunication industry; a sector that is in high demand. Due to continued innovation and technological advancement, consumers’ needs are continually changing as they seek to become more connected. However, it is a highly competitive industry with new entrants plunging into it from all over the world. China and over developing nations remain the biggest threats to sustainability of Apple’s business due to the fact that they continually bring new innovative products into the market.

Apple have been able to meet such demand through its resource based view concept. Apple boosts one of the most qualitative resources in the industry with numerous years of continued creativity and innovation. Its brands are very distinct and have been very difficult to imitate by the competitors. All Apple products run on their own operating systems, while also boosting numerous advantages that competitors find difficult to math. Thus, the company has the right internal resources to maintain sustainable competitive in the long-run.

The telecommunication industry is very competitive and price is a key factor. This is where Apple has an issue because there are numerous brands that offer quality products at an affordable price. The Apple brands are considered a luxury across the world. Thus, while serving a specific niche (the luxurious market), they are missing out on varied opportunities because majority of the consumers in the industry do not belong to the luxurious market segment. This opens up the desired competitive edge for its competitors (such as Techno, Samsung, LG, Sony etc.), who have focused on the major market niche and have been able to penetrate vast market across the world with their lowly priced products.

Recommendation for enhanced strategic management in Apple Inc.

In view of the above understanding, it is clear that Apple Inc. operates in an attractive industry while boosting the right resources for sustainable business operations. However, it is facing stiff competition mainly due to its products being highly priced. This has resulted to competitors gaining high market share in the global telecommunication industry.

As such, it is recommended that the company should seek to redress this issue of price by competitively pricing their products. This will generate higher sales as they are already renowned globally as a quality brand. Making the price affordable will in essence increase its market share as more consumers will be buying their products. However, it is unlikely that this will be the case in Apple as the company has a clear cut market niche, which it might not be willing to give up. If such is the case, it is suggested that the company should seek to develop a subsidiary designed to serve the non-luxurious market segment. This will allow it to retain its brand value with its main market, while penetrating other markets.

Conclusion

In conclusion, strategic management is an important feature for the success of any given company and this is based on the understanding that it allows companies to easily access their competence and use such to develop the right products and services for the consumers. Considering that production is only completed if final products have reached the final consumers, it becomes obvious that the focus of companies should be to ensure that their products and services are easily sellable.

References

BARNEY, J.B. (1991). Firm Resources and Sustained Competitive Advantage. Journal of Management, 17(1):99–120.

DECKER, A. (2013) Resource Based View, [Lecture Notes] Lecture Notes on Resource Based View. Economics and the Organization of Economic Activity. Aalborg University, International Business Centre, Fibigerstraede 2, room 21, September 2013.

HENRY, E.A (2008). Understanding Strategic Management. 2 nd edition. USA: Oxford University Press.

KNOP, C. (2011) BIG APPLE - Das Vermächtnis des Steve Jobs. 2nd edition. Frankfurt am Main: F.A.Z.-Institut für Management-, Markt- und Medieninformationen GmbH.

LASHINSKY, A. (2012) How Tim Cook is changing Apple. [Online] Available from:http://tech.fortune.cnn.com/2012/05/24/apple-tim-cook-ceo/. [Accessed: 28th December 2012]