Strategic Management Report: Apple Inc. Challenges and Strategies

This report provides a comprehensive analysis of Apple Inc.'s strategic management, examining the application of Porter's Five Forces model to assess competitive dynamics within the mobile phone industry. It identifies key challenges such as increasing competition, weak supply chain management, and the rising demand for smartphones. Through a case study approach, the report delves into these issues, highlighting their impact on Apple's market position. Furthermore, it proposes a detailed recovery plan, outlining steps to address identified problems, and includes a risk management strategy to mitigate potential future threats. The report emphasizes the importance of strategic decision-making and offers recommendations for enhancing Apple's competitiveness and ensuring sustainable growth. The analysis underscores the need for adaptive strategies to navigate the evolving technological landscape and maintain market leadership.

Strategic management

Table of Contents
Table of Contents.............................................................................................................................2
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
Comparison of theory and practice..............................................................................................1
Case study approach....................................................................................................................3
Recovery plan..............................................................................................................................4
Risk management strategy...........................................................................................................6
CONCLUSION................................................................................................................................7
RECOMMENDATIONS.................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Strategic management can be defined as the process of formulating objectives, analysing
business performance and forming future strategies to make improvements. It is mainly focused
with the future goals of the entity so that growth in upcoming period could be acquired. While
planning to carry out operations in systematic manner it is the key element which is focused by
all the top-level executives (Dagnino, King and Tienari, 2017). Aim of this report is to analyse
the way in which strategic management can help to find solution for all the threats and issues that
are faced by an organisation. The entity which is selected for this project is Apple Inc. It is one
of the largest companies which are operating business all around the world successfully. It was
founded in year 1976 by Steve Jobs, Ronald Wayne and Steve Wozniak. Currently it is having
more than 500 retail stores globally. This report covers various topics such as comparison of
theory and practice, case study approach to determine the major challenges faced by the
company. Additionally, a recovery plan along with risk management strategy for dealing all the
problems are also covered in this assignment.
MAIN BODY
Comparison of theory and practice
Porter’s five forces model was developed by Michael E. Porter in year 1985 for the
purpose of facilitating the business entities to determine different forces that are affecting the
functionality of business. With the help of it, all the organisations can analyse the implications of
all the elements of this model. Apple is one of the largest and successful mobile selling
companies around the world. In order to determine that the model supports the company or not
all the elements of it are analysed in detail in context of the entity. All of them could be
understood with the help of following discussion:
Competitive rivalry: All the companies that are operating business under same industry
and compete with each other are analysed under this element to determine the level of
competitive rivalry against each other. While implementing the model the managers of Apple
make sure that they determine all the entities which can affect the business of it. Some of the
main competitors of Apple Inc. are Motorola, Black Berry, Sony, Samsung, One+ etc. All of
them are giving tough competition to the organisation. The level of competitive rivalry within
the industry for the company is high (Dolata, 2017). Due to this, the enterprise is facing the issue
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of lower sales and another reason of it is weak management as the managers are not able to find
the ways which can help to deal with competitors.
Bargaining power of supplier: The external stakeholders who are delivering stock to the
company to manufacture its products are known as supplier. The mobile phone industry is very
large and there are various suppliers for the raw material. As Apple is a part of this sector
therefore it also has large number of outsider parties which can deliver its goods to manufacture
its mobiles. It shows that the bargaining power of suppliers for the organisation is low because if
one of them will sell the stock on higher rate then the company can switch to another one.
Bargaining power of customers: All the companies have the goal of increasing number
of customers who can buy their products. In order to reach this objective, it is very important to
be their first choice. Apple has a vey strong customer base and brand loyal clients. The target
market of it is the upper class of the patronages. The quality of all its mobiles is very high due to
which customers do not bargain and their bargaining power for the entity is low. The issue which
is affecting the number of clients of the company is its weak supply chain management due to
weak strategies of managers. In order to be the market leader, it is very important for the
organisation to deal with this problem systematically (Kodama, 2017).
Threat of substitutes: There are various products are available in the market that are
providing same benefits to the users but belongs to different manufacturers. For all the
organisations it is very important to be aware of all such items so that threat of substitute could
be reduced. Apple is the large mobile selling company and the price of its products is very high.
There are various small entities are in the market which are selling substitutes of I Phones which
are smart phones on very low prices. Due to this, some of the customers of Apple may get
affected and they switch to another one. It shows that the threat of substitute for the organisation
is moderate. Increasing demand and quality of smart phone is affecting sales of the entity and it
is a strategic management issue which is faced by the company because managers are not able to
find ways to respond them. If they will not find right solution for the same then it will leave
negative impact upon the organisation.
Threat of new entrant: Mobile phone industry is very large and there are various
barriers to enter in it. For example, huge funding, a great market image etc. If a new company is
willing to introduce itself in this market then it will be very difficult for it to sustain in it because
there are various well-established enterprises in the market with strong customer base (Kodama,
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2018). It shows that threat of new entrant for Apple is very low because a new entity in the
market will not be able to affect it negatively because its market image is very good. For a new
entrant it will be very difficult to capture the market share of the company.
From the above discussion it has been determined that Porter’s five forces model helps
and support practitioners to determine the factors that are leaving negative impact upon business.
It also helps to find the issues that may take place in future and leave unfavourable implications
upon the growth of company. Apple is also applying it and the managers of the company have
attained success in determining the issues for it with the help of it. By applying it the
management can find the ways to respond to all the challenges that are affecting it in negative
manner.
Case study approach
Apple is a large mobile and other electronic device seller around the world. The company
is carrying out all its operations properly and attain growth. Steve Jobs who is the founder of the
entity is required to management the company effectively so that the future goals of capturing
more markets could be accomplished (Lal and Johnson, 2018). In order to attain success, it is
very important for the board of directors of the company to analyse the key issues that are
affecting the company. Some of the challenges that are faced by Apple are as follows and Steve
Jobs is required to management enterprise effectively and find solutions for all the problems:
Continuously increasing competition: The competition in mobile industry is increasing
continuously and for Apple it is creating issues as it leaves impact upon the demand of, I Phones
in the market. Main reason of this problem is weak strategic management on the company as the
managers are not able to find the ways through which the competition could be dealt. There are
various companies that are giving tough competition to it These are Samsung, Black Berry, Sony
etc. For Steve Jobs it is very important to analyse the performance of business and formulate new
strategy so that the problem of competition could be responded properly. If the organisation will
not be able to deal with this challenge properly then it will be very difficult for it to sustain in the
market for long period.
Weak supply chain management: In order to reach the maximum number of customers
and make the product available for them it is very important for all the companies to manage the
supply chain properly. It can help to deal with all the problems that are leaving negative impact
upon business (Weak supply chain management of Apple, 2017). Apple’s supply chain
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management strategies are weak as the managers are not able to formulate effective decisions for
the same. It is affecting the customers base and resulting in decreased number of customers for
the company. Steve Jobs is required to take appropriate actions to deal with this issue and make
sure that it is dealt properly so that success for business could be acquired.
Increasing demand of smart phones: Demand of Smart Phone is increasing in the
market which is affecting sales of I Phones. In order to sustain in the market, it is very important
for Apple to formulate new strategies so that impact of this problem could be reduced. It is also a
strategic management issue because the managers are not able to formulate decisions to deal with
this problem. Currently, it is the major challenge which is faced by the organisation. If it will not
be responded properly then Apple may lose its market share. Steve Jobs should analyse the
business performance and find the strategy to respond this problem by making improvements in
company’s policies (Issues faced by Apple, 2020).
From the above discussion it has been analysed that if Steve Jobs will analyse the current
strategies of business and determine their efficacy then it can help to deal with all the problems
that are faced by the organisation. If appropriate decisions will not be taken then it will leave
negative impact upon the performance and business of Apple. The current strategy which is
focused by the organisation is differentiation which is helping the company to attain competitive
advantage. Now the company is required to formulate new strategy which can help to deal with
all the challenges that are faced by it.
Recovery plan
Currently Apple Inc. is dealing with different problems and it is very important for it to
make sure that it resolves all of them and recover as soon as possible. If effective decisions will
not be taken then it will affect the market share of the company. For this purpose, a recover plan
is required to be generated (Lasserre, 2017). For this purpose, following steps could eb followed
by managers of Apple and find ways to deal with all the issues that are faced by it:
Step 1 – Identifying the current issues: It is the first step where the managers will be
required to identify all the issues. Here, they will analyse actual performance of business and
determine the problems that are resulting in weak performance. Management of Apple can assess
all the problems of business at this stage and determine their negative impact upon business. If
they will not able to find the actual challenges then it will be very difficult for them to deal with
the systematically. The main thing which is required to be focused at this stage is evaluating the
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current position of business because without analysing it, it will be very difficult to identify the
problem.
Step 2 - Figuring out causes of the issues: When all the issues such as weak supply chain
management, increasing competition and demand of smart phones etc. will be identified by the
managers of Apple then they will have to find causes of them. For this purpose, the management
will be responsible to analyse each and every problem in detail. It will help to analyse the roots
and facilitate to find the ways to deal with them (Ou, 2017). In order to respond to all the
problems, it will be very important for the mangers to make sure that they pay attention towards
each and every element of all the challenges. It will help to resolve the issues properly.
Step 3 - Finding alternative solutions for the problems: When the causes of all the
issues are analysed then it is very important for the managers to find the alternative solutions for
all of them. All the problems are required to be analysed separately so that ways to deal with
each one of them could be figured out. For example, the problem of weak supply chain
management could be responded by formulating new strategy or muddying the exiting one. The
managers have to evaluate both the solutions and then select one of them which will help to
respond the issues properly. On the other hand, the problem of increasing competition could be
dealt by launching a new phone in the market with a new innovation or making changes in
current strategies such as marketing, pricing etc. Formulating alternative ways for the problem
can help to reduce the complexity in dealing the issue (Payne, 2017).
Step 4 - Implementing the best suitable solutions: When different solutions for each
and every problem will be formulated by the managers then they will be responsible to
implement the best suitable from them which can help to respond the problem. One of the
solutions is selected by discussing with the teams and the one with higher votes is implemented.
For example, the managers in Apple will implement the strategy to making modifications in the
existing supply chain strategy to resolve the problem of weak supply chain management. On the
other hand, the option of launching a new mobile in the market with innovation will be adopted
to respond the challenge of increasing competition. In order to make sure that the implemented
solutions will help to recover the company the management is required to select the best suitable
one. Wrong selection may make the business’s situation worst (Rothaermel, 2016).
Step 5 - Analysing success or failure of the plan: This is last stage of the recovery plan
where the managers of Apple will be responsible for assessing success or failure of the plan. For
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this purpose, they will again analyse performance of business and determine that the plan have
made any changes or not. If the plan will not be able to make any changes in the performance of
the company then it will be declared as failure and positive changes will be considered as
success.
While formulating recovery plan it is very important for the managers of Apple to make
sure that all the above described steps are followed by them. It can help to make sure that all the
problems are responded properly and their negative impact upon business is decreased. If the
management will not be able to follow them one by one then it will be very difficult to deal with
problems properly (Wenzel and Koch, 2018).
Risk management strategy
Risk management strategy can be defined as a specific strategy which could be focused
by organisations to deal with all the risks that are taking place and affecting the business
unfavourably. If the entities will formulate it properly then it will result positively and also
contribute in the growth of business. A slight mistake or ignorance of important factor may result
in failure in implementation of risk management strategy. As Apple is facing different types of
problems which is affecting its business therefore it is also important for it to formulate it. With
the help of it the organisation will be able to deal with all the problems that are affecting its
negatively (Yang, Nam and Kim, 2018).
It has been advised to the managers of Apple to figure out all the risks and conduct
critical evaluation of all of them. It will be beneficial to analyse the main reasons due to which
all the issues are taking place. While implementing the risk management strategy the managers
will be responsible to make sure that they analyse each and every element related to the issue. It
will help them to evaluate the level of the issue and the impacts that could be left by it upon the
business.
The risk management strategy of Apple Inc. should be formulated by paying attention
towards actual performance of company. It will help to form the strategy according to the
weaknesses so that possibility of becoming threats could be reduced. The top level of the
company is recommended to make sure that past and future risks are taken in to consideration as
it will support the organisation’s strategy to respond the problems that are faced by the company
(Yoffie and Baldwin, 2018). As the competition for Apple is increasing, demand for smart
phones is also inclining and the supply chain management of company is weak so all these
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problems may create different issues such as lower market share, decreased profits etc. In order
to deal with all of them the managers should make sure that they analyse each problem properly
to form risk management strategy.
CONCLUSION
From the above project report, it has been concluded that strategic management is the
procedure which is focused by all the companies to analyse actual performance of business form
strategies for future. Porter’s five forces analysis help the organisations to analyse impact of
different factors upon the business. All the key elements of it are competitive rivalry, bargaining
power of suppliers and customers, threat of new entrant and substitute. In order to deal with
problems such as higher competition, increasing demand of substitutes and weak supply chain
management recovery plan should be formulated by companies. There are five main steps of it
which are identifying the current issues, figuring out causes of the issues, finding alternative
solutions for the problems, implementing the best suitable solutions and analysing success or
failure of the plan. By following all of them solution for business’s problems could be
formulated.
RECOMMENDATIONS
 Apple Inc. is recommended to modify all its current supply chain management strategies
and policies. It will help to improve the supply chain and increase the number of
customers.
 Apple Inc. is also suggested to launch a new mobile phone in the market with new
features and lower price. It will help to deal with the risks that are taking place due to
increasing competition and demand of smart phones.
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REFERENCES
Books and Journals:
Dagnino, G. B., King, D. R. and Tienari, J., 2017. Strategic management of dynamic growth.
Dolata, U., 2017. Apple, Amazon, Google, Facebook, Microsoft: Market concentration-
competition-innovation strategies (No. 2017-01). Stuttgarter Beiträge zur
Organisations-und Innovationsforschung, SOI Discussion Paper.
Kodama, M., 2017. Strategy Transformation Based on Holistic Leadership: A Case Study of
Apple', Developing Holistic Leadership.
Kodama, M., 2018. Apple versus Sony: strategy transformation by capabilities congruence
through asset orchestration: Driving Congruence in Capabilities. In Sustainable Growth
Through Strategic Innovation. Edward Elgar Publishing.
Lal, R. and Johnson, S., 2018. Amazon, Google, and Apple: Smart Speakers and the Battle for
the Connected Home.
Lasserre, P., 2017. Global strategic management. Macmillan International Higher Education.
Ou, Y., 2017, June. The application of the" two-way broom theory" to solve Huasheng's apple
single product supply chain management" pain point". In 2017 2nd International
Conference on Education, Sports, Arts and Management Engineering (ICESAME 2017).
Atlantis Press.
Payne, B., 2017. Brand Positioning and its Usefulness for Brand Management: the Case of Apple
Inc. Newcastle business school student journal. 1(1). pp.51-57.
Rothaermel, F. T., 2016. Strategic management: concepts (Vol. 2). McGraw-Hill Education.
Wenzel, M. and Koch, J., 2018. Strategy as staged performance: A critical discursive perspective
on keynote speeches as a genre of strategic communication. Strategic Management
Journal. 39(3). pp.639-663.
Yang, S. H., Nam, C. and Kim, S., 2018. The effects of M&As within the mobile ecosystem on
the rival's shareholder value: The case of Google and Apple. Telecommunications
Policy. 42(1). pp.15-23.
Yoffie, D. B. and Baldwin, E., 2018. Apple Inc. in 2018.
Online
Weak supply chain management of Apple. 2017. [Online]. Available through:
<https://www.industryweek.com/supply-chain/article/22024392/apples-supply-chain-
struggles-are-a-major-threat>
Issues faced by Apple. 2020. [Online]. Available through:
<https://www.computerworld.com/article/3505838/9-challenges-apple-based-
enterprises-face-in-2020.html>
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