Importance of Strategic Management in Apple Plc Company

This report focuses on the significance of strategic management in Apple Plc Company, discussing theories like SWOT analysis, lean management, and value chain analysis. It also addresses the problems faced by Apple and provides a recovery plan and risk management strategy.

Strategic Management
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Executive summary
This report sheds light on the importance of strategic management in an organisation. The
chosen organisation for this report is Apple Plc Company. This report discusses different
theories of strategic management that will help the chosen organisation to generate better
business operations. This report also sheds light on the problems faced by Apple Plc Company
and provides a recovery plan as well as a risk management plan that will help the company
recover from the problems.
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Table of Contents
1.0 Introduction................................................................................................................................4
2.0 Critical Analysis........................................................................................................................4
2.1 Comparison of Theory and practice......................................................................................4
2.2 Case Study Approach............................................................................................................7
2.3 Recovery Plan......................................................................................................................10
2.4 Risk Management Strategy..................................................................................................12
3.0 Conclusion...............................................................................................................................14
Reference List................................................................................................................................15
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1.0 Introduction
In the present business context of the world, it is very important for companies to use strategies
that will help business to manage better operations and function properly. Strategic management
plan involves betterment of organisation as well as ensure proper objectives within the
organisation. This report discusses the importance of strategic management and highlights few
theories that can help a company generate better revenues.
2.0 Critical Analysis
2.1 Comparison of Theory and practice
There are various theories that consists of strategic management, those theories helps in
identifying the strategies that Apple Plc Company needs to incorporate for improvement of their
business operations.
The first identified theory will help Apple is the SWOT analysis. It will be easier for the
company to acknowledge their strength, weaknesses as well as shed light on the present
opportunities and threats of the company (Yuan, H., 2013). This theory eventually helps an
organisation to improve their proficiency.
Strength:
 Efficient brand image
 The margin of profit is very high
 Apple often undergoes innovative
process in order to influence more
customers
 Capable of bring up new products in
the market.
 Competitors are not effective to take
away Apple Plc’s market
Weakness:
 The distribution network of Apple is
not very expanded due to the
exclusiveness in their products
 Due to high price, Apple is only able to
catch the interest of certain customers
who can afford their products
 Due to high range, the company sales
exists only in high end markets
 Limitation in the company’s pricing
strategy is a burning weakness.
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Opportunities:
 Expansion of the distribution network
to attract more customers
 Explore new affordable products to
reach out to new target market
 New and innovative product lines to
lead the company towards more growth
Threat:
 Lack of fundamentals that will help in
competitive market
 Chances of imitating Apple products
are high and the other firms sell those
products in less price which eventually
hampers the market shares
 The increase in labour costs in
countries like China is affecting on the
chances of profit and hence the prices
of Apple products are increasing.
Table 1: SWOT analysis
Source: (Created by author)
The second theoretical framework that will help the company initiate better business operations
is the lean management theory, which identifies the unnecessary costs of the business and
provides ways to minimize them (Van Weele, 2012). This theory will help Apple to identify the
waste costs caused by over and uneven distribution of products. This theory of strategic
management is relevant to inventory management of an organisation. With the help of this
particular theory, Apple PLC will be able to manage their supply chain, which is a severe
problem of the organisation as well as shed light on the improvement required in managing of
the company.
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Figure 1: Lean management theory
(Source: Myerson, 2012).
Lean management theory explains that every organisation needs to identify their value at first.
Secondly, they need to map their value stream. Thirdly, they need to create flow of products and
then establish a pull in the products in order to bring up perfect production management
(Myerson, 2012). This theory will help Apple to establish continuous growth in their business
operation and make it easier for the management to plan long-term goals. This theory also deals
with bringing more efficiency in the company’s workforce as well as impact on the quality of
their products.
The third strategic management theory that will help Apple PLC to practise a better business
operation is the value chain analysis. This theoretical framework will help the company to shed
light on the company performance as well as create more value of their products in order to
enhance the competitive advantage in the market (Beske et al., 2014).
Figure 2: Value chain analysis
(Source: Gereffi and Fernandez-Stark, 2016)
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Value chain analysis sheds light on the activities that a company carries out. Those activities are
divided into two parts that includes primary and secondary. The primary activities of a company
is shedding light on the inbound and outbound logistic, managing the business operations as well
as the sales and marketing services (Gereffi and Fernandez-Stark, 2016). On the other hand, the
secondary activities include HR management, technological managements as well as product
management. This analysis eventually helps an organisation to identify the value of their
products as well as their rivals. This analysis makes it easier for the company to create parity
among the organisation and their rivals. This theory also helps the company to improve their
business operations.
2.2 Case Study Approach
Apple Inc is a technical and electrical giant with headquarters in California, USA. This
multinational organisation involved in designing and production of electronic equipments and
operating software for computers. Along with this the company has presented a wide spectrum of
services in the recent past. The product the company presents are a worldwide phenomenon and
the present scenario of the business market is dictated by the company. The work setting of
Apple is 123 thousand as of 2017 and with employees from all around the globe (Apple 2018).
Apple Inc is currently positioned as the 2nd largest technical industry. However, there are certain
limitations and issues that the company has witnessed in the recent past which has affected the
business output. There has been severe contention on the company for presenting a heavy,
corrupt and venomous work environment. The employees and workers involved with the
company have expressed grievance about the transactional leadership policy that the company
follows. With this enormous pressure and work load many employees are unable to continue and
there were many cases where the employees have reported alarming degradation in mental and
physical conditions. This was first observed when one of the employees working for the
company committed suicide because of the unbearable pressure of the tasks. This was a serious
blow to the technical giant and the ambiance inside the system (Lubitz 2018).
Along with this the company has been batting issues regarding the distribution of the products.
The logistics organisation Hon Hai Precision Industry is one of the principle distributer for Apple
Inc. The company went on record expressing concern regarding the carelessness and
unprofessional approach of the company. There has been severe malfunction considering the
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delivery of the products. There are certain set of quality standards that an organisation needs to
follow in order to achieve successful distribution and management of the final products.
According to the autonomous distribution units Apple Inc was unable to meet those standard
protocols. Along with this there has been a opaque mode of communication among the
companies and Apple. The dates and other necessary data were unclear and it was difficult for
the company to address the details. In the recent past, after introduction of the Apple i Phone 5
there have been accusations and complaints of delayed delivery and other issues regarding
supply chain. Since the company is incapable of gathering the needs and requirements of the
customers, there has been a serious impact on the business structure and the output of the
company (Angalich 2012).
Though Apple Inc is one the largest technical company present today and the 2nd best company
in this area of business, there are certain parameters that the company needs to address in order
to withhold its position in the market. The company needs to incorporate more ideas and
strategies in order to improve the production and designing process of the products and services.
There have been stern complaints regarding the products of the company. Apple not so long ago
had introduced the i Pad and it featured the 4G attuned medium of data communication.
However, there were issues with the compatibility of the service and there were other glitches
which had a pessimistic impact on the customers and the possibility of a possible customer base
(Sherman 2012). The i cloud service of the company has also witnessed serious criticism because
of frequent technical issues and glitches that the service battles. There have been cases where the
users were unable to handle their accounts and access files for a long period of time. There have
been issues reported where the software that the company provides is backdated compared to the
other products presented by the competing companies and there needs to be improvement in the
software. The users have witness system lags and frequent bugs which affects the working
process and there is a huge possibility of security and data breach.
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Figure 1: I Pod sales
Source: (Hughes, 2015)
Figure 2: I Phone sales
Source: (Hughes, 2015)
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It can be deduced from the above statistics presented that there has been a downfall in the
company’s business output in the recent past. With involvement of worthy competitors like
Samsung and Nokia, the company needs to improve its approach and its services (Hughes 2015).
2.3 Recovery Plan
A recovery plan is a strategic process, which is carefully developed and needs to be executed
effectively to overcome the barriers that prevent the firm or organisation to increase productivity
(Bryson, 2018). In this part of the assignment, the issues faced by Apple Inc. will be highlighted
again and a prospective recovery plan will be presented. Few of the issues faced by the company
and a suggestive recovery plan is presented below:
HR issue
Several articles and journals have stated the pressurising work environment at apple and only a
few employees were willing to comment on it and disclose a few details in relating to the work
atmosphere and the bad work culture they faced (Lubitz, 2018). It has also been stated by them
that the HR or the department supervising the employee relationship with the organisation were
incapable of addressing or recognizing potential problems which the employees faced and lacked
the skills to solve them. It is also said that they perhaps overlooked such issues and just
concentrated on the smooth flow of the work being done and the delivery of productivity. The
toxicity of the work culture seems to be attracted by the hostile work environments shared by
other tech support giants and start-ups at the Silicon Valley.
Recovery Plan
A suggestive recovery plan to overcome these hostile situations work could be provide a
specially designated cell within the organisation that helps the employees to address their
concerns and issues to the management. In return, the management needs to provide a resolution
within a short turnaround time to all the grievances and complaints received. This cell should
take care of all the possible problematic areas of the employee-management relationship and
start the execution of the formation of such cells as soon as possible (Bardach and Patashnik,
2015).
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Supply Chain Issue
The issues faced by Apple Inc in the area of supply chain management is that it has been not able
to provide a consistent maintenance of quality in the products manufactured thus been unable to
deliver the required number of the units to suppliers and distributors upsetting the market and
consumers expectations. The company has been reported to been shipping lesser volume of units
than the number which was need by the market because of the production glitches and the
increasing number of faulty manufactured products which do not meet the required standards set
for the products. Some observed tension between the workers and the management at the
production line as well and it too resulted in the missing of the targeted deadlines and number of
units deliverable (Angalich, 2012).
Recovery Plan
To overcome these issues and barriers the first thing needed by the company is to review its
production line, methods to ensure no faulty products are produced and the number of production
defects kept to an insignificant number. Another area to look into at the production line is the
redressing of the complaints and grievances of the workers working at the assembly unit. A good
relationship plan and a process to identify their concerns is need to be developed by the company
and carried out with effective execution (Ross, 2015).
Operational Issue
The final products from the company have showed some negative features such as overheating,
internet and wi-fi connectivity, crashing apps, glitches at accessing i-cloud storage and others
(Hughes, 2015). These operational issues should be dealt with astutely as these can lead to the
consumers opting out of the selection of the company product and choose to use the products
offered by the market rivals. The success-providing product of the Apple Inc, the I-phone, which
led to its come back in the market, has been reported to show a list of glitches in its software as
well the LCD display and the hardware.
Recovery Plan
The suggestions and the unpleasant experiences of the product users should be taken as the
guidelines and areas where the Apple Inc should be working upon to overcome the operational
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issues. The company should chart out the defects of the operating system, incorporate a new
body of technical support and development team to look into the improvement of the operating
system to support all the features it lacks, and drop the bad ones currently being borne by the
products (Sekaran and Bougie, 2016).
2.4 Risk Management Strategy
The risks of the company are usually considered as threat towards the brand, the reason after this,
the customers goes for their own benefit, if a particular brand is unable to give them the required
service, and then the consumers will go for any other brand. Brand name is a huge thing; it takes
a lot of time to make it, but a single problem have the potential to ruin the brand name, this is
why the business organisation should always be prepared for the sake of the risky situations.
Apple is considered as one of the biggest brand in the globe right now. Even after such big
designation the company have some major issues like HR issues, the supply chain issues and
operations problems (Hopkin, 2017). The risk management strategies are described below.
 HR issues
The employees of the brand named Apple are facing some of the major mental health issues and
some of the employees of the company are even considering the issue as a toxic environment of
the company. There are few of the employees in Cupertino, California who tried to commit
suicide, because this environment of the company was being the issue of their mental health
issue. The employees of the company are the major assets of it. Whenever, they go outside and
discuss about any problem which they are facing in Apple is one of the major harm towards the
brand name. It is HR’s responsibility to maintain a good work environment for the employees,
they should not feel toxic because of the work environment, and there are several ways through
which this problem can be solved the HR can have a face to face talk regarding the problem they
are having, the HR can try to solve the problem through this. As per as this has become a major
problem of the employees, this is why the HR department can make a cell for the sake of the
solution of the problems. These practices should be there to solve the problem of the HR (Lubitz,
2018).
 Supply chain
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The brand Apple is known for the sake of its popularity, as per as the brand has enough
popularity, and it is even niche enough as well. It is a class or a standard to use a smart phone of
the brand Apple; this is why before the brand launches a new model of the phone, the potential
customers have the craze to have that brand’s phone earlier. The date when the phone launches at
that time there is a huge demand of the phone. Now when the demand of the product is quite
good the supply should also be just like the demand. The problem with the brand apple lies in the
supply chain. There are a lot of people there between the business organisation and the product.
It is the brand’s responsibility to look after the factor of major supply. They need to discover that
if the problem lies with the distributor, retailer or any other stake holder, then after the
identification of the problem, they should provide a proper solution to that particular problem.
Even though the brand is immensely popular but they need to be a little particular about their
supply chain (Angalich, 2012).
 Operations problem
This is also one of the major issues of the brand named Apple. Though it is made by one of the
greatest and best upgraded equipments, but still the customers of the phone have several
operational issues with the phone. The major issue of the phone is it has got hitting issue very
fast, as per as the factor is there, that Apple has different IOS system. There are lots of
applications in the phone which does not work in a proper manner. This is why the users are
facing major problems. The cost of the smart phone is quite high from the other brands. This is
why Apple should maintain the quality of its. The brand should be prepared for this kind of
problems. Then only they will be able to recover from this kind of problems (Sherman, 2012).
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3.0 Conclusion
A particular brand is unable to give them the required service, and then the consumers will go for
any other brand. Brand name is a huge thing; it takes a lot of time to make it, but a single
problem have the potential to ruin the brand name, this is why the business organisation should
always be prepared for the sake of the risky situations. The employees, they should not feel toxic
because of the work environment, and there are several ways through which this problem can be
solved the HR can have a face to face talk regarding the problem they are having, the HR can try
to solve the problem through this.
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Reference List
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Myerson, P., 2012. Lean supply chain and logistics management. New York: McGraw-Hill.
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