Strategic Management Analysis of Apple
Added on 2020-07-22
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STRATEGIC CHANGEAND ORGANIZATIONS
Executive SummaryThis report focused on strategic options for development of business of Apple inGermany. Apple Incorporation is one of the leading American Multinational technologycompany that specialises in manufacturing computer products, software, mobile devices andgadgets to its target consumers. The internal and external environment environmental audit hasbeen made in the report. To carry out internal environment analysis, McKinsey's 7S strategic tooland SWOT analysis has been used. In order to gain competitive advantages it is crucial formanagement to align the internal elements effectively and efficiently. In this context it wasidentified that internal elements at Apple are precisely aligned with each other thus enhancingthe shared values within the company. Apple possess immense strengths and opportunities togrow substantially and be the market leader worldwide. It has efficient brand reputation, loyalcustomers and large number of stores. To carry out external analysis, PESTLE model has beenused in which it was identified that there are numerous elements such as unstable politicalconditions, environmental factors which could affects the growth and development of theorganisation in Germany. Market Development strategic option has been recommended to theApple after using Ansoff Matrix. The barriers such as financial, human resource andenvironmental negatively effects the productivity and profitability of the organisation. Toovercome these barriers, precise plans and mitigation strategies such as proper allocation ofbudget, raising captial through bank loans, providing training to employees and consideringenvironmental impact has been recommended to Apple.
Table of ContentsINTRODUCTION...........................................................................................................................1a) Strategic internal and external audit............................................................................................1Internal Audit..........................................................................................................................1External Audit........................................................................................................................8b) Strategic options for Apple........................................................................................................11CONCLUSION..............................................................................................................................19REFERENCES..............................................................................................................................21Illustration IndexIllustration 1: Apple McKinsey 7S Model ......................................................................................2Illustration 2: Apple SWOT Analysis..............................................................................................6Illustration 3: PESTLE analysis ....................................................................................................10Illustration 4: Bowman Strategic Clock Model ............................................................................15
INTRODUCTIONBusiness organisations in order to earn higher profits and revenue opt to expand theiroperations in overseas market. Apple Incorporation is one of the leading American Multinationaltechnology company that specialises in manufacturing computer products, software, mobiledevices and gadgets to its target consumers (Rothaermel, 2015). The company would like toexpand their business in Germany for enhancing their productivity and profitability in Europeanmarkets. The focus of present report will be on analysing internal and external environmentalfactors which could affect and influence the operations of Apple in Germany. In order to do thatprecise strategic tools will be applied in the report in order to conduct robust analysis and togenerate deeper insights. Furthermore, the strategic direction for expanding business in Germanywill be provided to the management of Apple in this report. The challenges that could be facedby the organisation will be identified and eventually mitigation strategies will be provided to theApple to overcome those barriers and obstructions. a) Strategic internal and external auditAnalysing both internal and external environment is essential for strategic planners anddecision makers. Internal factors represents the internal positions and internal strategic capabilityof the organisation whereas external environmental factors are those factors which affects theorganisation externally (Taghavifar and Mardani, 2015). Internal AuditIn order to expand globally, the management of Apple needs to focus on their internalstrategic capabilities by analysing the internal environment. Strategic capabilities refers to thecapability of business to successfully employ competitive strategies which enables them tosurvive and enhance its value over time (Tan and Carrillo, 2017). In order to analyse the internalenvironment of the organisation, McKinsey 7S mode and SWOT analysis will be used. By usingthese models the internal position of Apple can be assessed. Internal Audit, also called as internalanalysis is the overall procedure of identification and the evaluation of an organization's specificproperties (Grant, 2016). It includes all its resources, abilities, core competencies etc. It can alsobe considered as an exploration of the cost, position and competitive viability in the market. Theinternal audit provides essential data about the strengths, weaknesses, opportunities and threats. McKinsey 7S model1
McKinsey 7S model is a tool which analyses firm's organisational design by consideringat 7 key internal elements which are structure, strategy, systems, shared values, style, staff andskills. It was developed in 1990 and has been broadly used by academics and practitioners. It isone of the efficient strategic tool that helps in analysing the internal environment of theorganisation (Neto, Abrita and Parré, 2017). It sought to present an emphasis on humanresources rather than traditional mass production of capital, infrastructure and equipment as akey to higher organisational performance. In order to achieve effectiveness in a company it isessential to align these 7 elements. The McKinsey 7S model applied for Apple is describedbelow:1.Structure: Structure represents the manner in which the divisions and departments of theorganisation are divided and organised. In simpler terms, structure represents theorganisational chart of the firm. In order to attain set goals and targets, management ofbusiness organisation needs to create robust organisational structure. Apple incorporation2Illustration 1: Apple McKinsey 7S Model (Source: Dudovskiy, 2018)
has ability to attract large human resource base because of its flat organisational structure(Wheelen, Hoffman and Bamford, 2017). Flat organisational structure has anorganisational structure with few or no levels of middle management. For attaininghigher effectiveness within the organisation it is important for the management to alignits flat organisational structure with other core internal elements. Organisational structurecan be transformed by the management so that all the elements can be aligned effectivelyand efficiently.2.Strategy: Strategy refers to the plan which developed by the strategic thinkers anddecision makers after analysing the aggregate position and resources of the organisation.Strategy falls under Hard S category of McKinsey model. In order to sustain in thecompetitive environment it is important for the management devise precise plans andstrategies (Michaely, Rubin and Vedrashko, 2016). The management of Apple focusproduct differentiation strategies where they provide premium quality of products andservices to their target customers. This is essential in order to gain competitiveadvantages. The strategy formulated by Apple is aligned to other internal elements whichinitially helps provides them assistance in enhancing the effectiveness in the quality ofwork within the organisation (Morán‐Ordóñez and et.al., 2017). Strategy must beformulated for long term purpose as it helps in providing precise direction to themanagement through which they can attain desired goals and objectives.3.Systems: Systems are the process and procedures of the company which reveal dailyactivities of businesses and the process of decision making. System is the sector of firmwhich determine the operations of business, its main focus and role of manager duringtransformation in organisation. In Apple, the management set explicit policies andprocedures which employees and staff members have to follow. The system withinorganisation is aligned with other elements effectively (Sathappan, 2017). The role ofmanagers and executive officers within the organisation has been explicitly defined.Apple Incorporation boasts unique and non conventional organisational structure knownas “Apple Core Structure”. Through this structure and system the company has managedto streamline interactions between the company management and employees (Saha,Sarmah and Modak, 2018). 3
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