Apple Inc: Why It Has Success?

Introduction

Apple is an American registered corporation that specializes in providing electronics to consumers with its headquarters based in Cupertino, California. Some of its best selling products include the Macintosh personal computers, the iPod line of portable music players, the iPhone, and the multimedia cellular phone that uses multi-touch interface. The Macintosh personal computer is Apples own creation produced and marketed by itself. During its inception period it was the first personal computer to be characterized by user graphic interface. (Cellini, 2004)

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The rationale behind this study is to look into some of the interesting features that make Apple Corporation a company of choice in the software industry. Apple is a unique company in that it has managed to develop its owns business model that is likely to shape the future of the media industry. Apple’s strategy is forward looking rather than many business strategies that are narrow minded on peer to peer reviews. The recent inclusion of Apple among the top fortune companies leaves a lot to be desired in the software industry. (Fisher, 2008)

A lot of research papers have been done by different professionals as well as business executives about this area. We work round the clock to ensure that research work is sufficient to provide data for the next future generation. This analysis will also form the basis on which potential investors willing to venture into this industry can build their confidence. Apple is a medium corporation with overseas branches and is one company that has prominently featured in most public talks including the American Fortune Magazine 2008. The uniqueness in it makes it a good area of study especially for management students with such future prospects. (Fisher, 2008)

This company was started on 1st April 1976 by Steve Jobs, Steve Wozniak, and Wayne Ronald and registered in 19 77 by only Steve Jobs and Steve Wozniak after Wayne had sold his shareholdings. During this period the company used to operate in the name of Apple Computers Inc but as time went by the name was changed to reflect the company legal registration requirements. It was the culmination of activities that saw the company doubling its business efforts by creating new product lines to match the changing environment. (Cellini, 2004)

Apple Corporation specializes in providing electronics and software products. These include the Macintosh personal computers, the iPod and the iPhone. Its software’s include the Mac OS X operating systems, the life suit of multimedia and creativity, the work suite productivity software, the final cut studio, the tunes media browser, and the proficient audio film industry. Apple operates numerous retail stores strategically extended in more than nine countries and an online store where customers buy hardware and software products. (Linzmayer, 1999)

Apples strategy includes stocking a variety of new products which are tailored towards customer’s requirement. This is evidenced by the way it designs its stores especially those in the international border. The stores appear like they are one stop shopping in electronics. Both hardware and soft ware products are found within one place providing clients with convenience. The success of Apple has been boosted largely by growth in the education sector. This has enhanced the company’s creativity more so in programming which eventually has contributed to tremendous growth in company’s products. Today Apple prides itself in product creativity, solid customer base and financial influence in the market. (Cellini, 2004)

The company also relies in employing technically qualified personnel.The dismissal and re-employment of professionals like Steve Jobs in this company can be said to have contributed to its continued outstanding performance. Jobs was one of the key founders of the company and was shown the door following their differences in managerial opinion with the then appointed board of directors. (Linzmayer, 1999)

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Apple has formed partnerships with big firms that it perceives to be a threat to its subsequent spectacular performance in the industry. This implies that they can join hands together to form an impossible business alliance that will definitely send their rivals packing. The notable alliance was in 1994 when it teamed up with IBM and Motorola to form AIM alliance. The main purpose of this alliance was to produce a computing platform where the IBM and Motorola hard wares would be used together with the Apples software to complicate matters for the Microsoft. (Cellini, 2004)

This company is so interesting why? The way in which it conducts itself is so innovative. During the year 2005 Steve Jobs one of the longest serving managers as well as the directors announced a new strategy involving the introduction of a new line of product that would be the Intel-Based Mac computers. They also produced Boot Camp that would help users install windows XP on their respective Intel Macs. These are some of the strategies adopted by this firm to ensure its survival both in the long-term and short run. (Fisher, 2008)

Environment

Apple Corporation operates in a very dynamic and volatile business industry. In this environment competition has become so stiff that a firm’s products must undergo reformation processes to be able to compete with other products. Competition pressure is being exerted by Apple’s main rivals that include the giant Microsoft, consumer outlets like Wal-mart, Price Club, and Sears and Dell Corporation. Competition has also made firms to be more innovative and creative. This means a company should have the capacity to employ highly qualified staff with relevant technical competencies that will always tackle their job responsibilities with multifaceted approach. This has promoted a culture of professionalism in Apple. (Cellini, 2004)

Looking at the way Apple Corporation is able to invent new product versions and present them in the market is enough to learn about the industry. Big firms capitalize conducting staff appraisals regularly to identify the training needs. Once these needs are identified employees are taken for training in order to acquire the specific skills to better equip them for future challenges. The modern world has become dynamic and only individuals who are multifaceted can survive. This is the scenario in Apple Corporation, despite fierce competition from Microsoft it has managed to survive. Its product brand has remained the only sole customer choice in the market. (Fisher, 2008)

The Company Chief Executive Officer

The company’s Chief Executive is called Mr. Steve Jobs who is also a founder member of Apple Computer Inc. Mr. Steve Jobs together with Wozniak and Ronald Wayne are the pioneers of the current Apple Corporation. He was fired following his disagreement with the board of directors back in 1985 when a power struggle broke out between him and the new CEO John Sculley. He ended up being relieved of his management roles and then later resigned and founded his own company called NeXT Inc. it was until 1997 when Steve Jobs was re hired as the new Chief Executive Officer. He has proved instrumental in ensuring that he brings back the performance glory once lost. In the recent years Steve Jobs has contributed to a wonderful financial performance. (Linzmayer, 1999)

The chief executive brought in more than 30 years commercial experience dating from as far as 1970s. His performance has been extra ordinary recording sales revenue of $32.48 billion for the financial year ended 31 December 2008 with operating income of 6.28 billion. As at 31st January 2009 Apple Corporation had thirty five thousand employees. The chief executive is currently on his six month leave ending June this year. (Reardon, 2008)

The company’s financial performance

The performance of the company for the last three years has been on an upward trend. This has been attributed to company’s capacity to contain internal as well as external environmental pressures. Coupled with good leadership under Steve Jobs the company has been able to meet its performance target. Between 2003 and 2006 the share prices grew by more than tenfold. The shares were selling at $ 80, 97.80, and 100 respectively in 2006, 2007, and 2008. This was brought by the fact that new products were hitting the highest sales ever and there was a general growing positive perception about the company. This contributed to sharp rise in share prices. (Steve, 2009)

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The success of the entire particular firm has been brought by the global growing desire for digitalization. The need to go digital and desire to eradicate the traditional forms of information systems has a strong correlation with Apple’s industry performance. For the last thirty years the world has witnessed fundamental technological advancement. This led to a growing demand for electronic appliances and devices. We have seen how the invention of computers has changed the life of the modern man. Today we are proud of being in a global village from where we can work on the fields while communicating to people in offices; we can make online orders and pay for goods without the need to travel to the physical business premises.

Firms like Apple Corporation which were able to think of these ideas are today’s center of economic focus. (Steve, 2009)

Apple has an outstanding brand all over the world. As customers continue to develop a positive perception on its products, the image has contributed to an overwhelming growth in sales. Product differentiation and good customers has made many customers to believe that Apple is the only choice in the software industry. This led to dramatic increase in profits recorded during the financial years 2005, 2006, 2007, and 2008. The company’s financial result for the year 31st Dec 2008 shows gross revenue of $ 7.9 billion. This shows an increase of 34.7 percent as compared to last year. In the last years performance 41 percent of the revenue was accounted for by international sales. (Reardon, 2008)

The result is a clear indication of Apples continued upward trend since the year 2005 and is likely to be least affected by the current global economic crisis as the company already has $ 25 billion safety cash in the bank. (Steve, 2009)

Major current issues

Apple is working tirelessly to ensure that it maintains its competitive advantage. By introducing new products to the market within short periods Apple is sending a stern warning to its arch rivals that it is capable of holding their future by every means. Within the last three years the company has introduced more than fifty new fast moving electronics and soft wares. Some of the latest products include Mac Book Air, Mac pro workstation and Mac mini. This represents an organization that cherishes innovation and creativity. Right now the company is steadily involved in maintaining its competitive strategy. (Steve, 2009)

Plans are also underway to continue international market expansions. This is evidenced by the recent purchase of Brae burn Capital and File maker’s subsidiaries. We have also seen a number of management appointments. This reflects Apple’s future strategic plans. The company is facing litigation cases arising from its failure to observe certain local regulation. It was recently sued for online sales of music in the European Union where the company restricted its customers to buy products only from the country in which their payment details originate. When organizations grow one of the biggest challenges that they face is customer care. Apple Corporation is not an exception and already there are several criticisms about the speed at which it responds to local customer complain. This shows that the company’s customer care and satisfaction has been waning. (Cellini, 2004)

Another issue is about quality. Of late customers have been complaining about some of the computers experiencing jams and breaking at times. This is becoming a major issue and if it is not promptly addressed might spell doom for the company. Apple Corporation must be able to uphold its integrity and set example for others in the industry. This is not the case here as players in the industry are already blaming Apple of post-launch price changes. This was observed when the company reduced the price of iPhone by $ 200 just two months after its launching. These are some of the problems that the managers should concentrate on. If they are remedied accordingly then it will be a hallmark to them. (Leopold, 1999)

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Future out look

With continued discoveries and product creativity I foresee a bright future for Apple Corporation Inc. successful organizations are ones that rely on constant research and development. They invest on human power to drive them to their destinations. Apple Corporation is one such origination. With the wonderful financial and operational planning decisions characterized by Steve Jobs there is no doubt that it will continue to record the expected performance for the next foreseeable future? (Linzmayer, 1999)

Continued creativity will make the company to continue creating unbreakable barriers in the environment. This will ensure that it maintains its competitive advantage to position itself in the industry. The company is entering into partnerships with the like minded organizations that will establish strong foundation on which they can be able to benchmark performances over the past periods and recommend necessary changes where appropriate. These alliances can also create economies of scale as they enlarge in size. This may increase efficiency and effectiveness. It is therefore the responsibility of the management to take the company to where it should be. (Fisher, 2008)

SWOT Analysis Apple

Strengths

Apple is a very triumphant company. Sales of its iPod music player had improved its succeeding quarter profits to $320 (June 2005). The sympathetic brand awareness had also amplified sales of Macintosh computers. So iPod gives the company right of entry to a whole new sequence of segments that purchase into other parts of the Apple brand. Retailing of its notebooks goods is also very tough, and symbolize a huge role to income for Apple. (Fisher, 2008

Brand name is all-important. Apple is one of the most recognized and vigorous IT brands in the World, and has a very devoted set of excited clientele that campaigns the brand. Such a commanding loyalty means that Ample not only recruits latest clients, it keeps hold of them i.e. they approach back for additional products and services from Apple , and the company also has the opportunity to enlarge new goods to them, for example the iPod. (Fisher, 2008)

Weaknesses

It is stated that the Apple iPod Nano may have a defective screen. The company has remarked that a consignment of its product has screens that shatter under contact, and the company is reinstating all flawed items. This is besides harms with untimely iPods that had out of order batteries, whereby the company presented customers with liberated battery cases. (Fisher, 2008)

There is anxiety on Apple to augment the price of its music download file, from the music industry itself. Numerous of these companies make extra money from iTunes (i.e. downloadable music files) than from their creative CD sales. Apple has sold on 22 million iPod digital music players and more than 500 million songs though its iTunes music stockpile. It accounts for 82% of all officially downloaded music in the US. The company is unyielding, but if it provides in to the music manufacturer, it may be alleged as a business limitation. (Linzmayer, 1999)

Before time in 2005 Apple proclaimed that it was to conclude its ancient rapport with IBM as a chip broker, and that it was about to toggle to Intel. Some industry professionals observed that the swap could puzzle Apple’s regulars. (Reardon, 2008)

Opportunities

Apple has the opportunity to expand its iTunes and music player technology into a mobile phone set-up. The Rokr mobile phone machine was designed by Motorola. It has a color monitor, hi-fi speakers and a press on camera scheme. An adaptation of Apple’s iTunes music stock up has been developed for the phone so consumers can administer the pathway they amass on it. Downloads are accessible through a USB cable, ands software on the earpiece pauses music if a phone call draws closer in. innovative technologies and tactical coalitions proffer chances for Apple. (Linzmayer, 1999)

Pod casts are downloadable broadcasting shows that can be downloaded from the Internet, and then engaged in recreation flipside on iPods and other MP3 devices at the expediency of the listener. The listener can access to Pod casts for free, and eventually revenue could be spawned from paid for contributions or through income generated from sales of other downloads. (Linzmayer, 1999)

Threats

The biggest danger to IT companies such as Apple is the very elevated intensity of rivalry in the know-how markets. Being victorious draws competition and Apple works very firm on investigations and expansion and promotion in order to hold its competitive situation. The reputation of iPod and Apple Mac are subject to demand, and will be exaggerated if economies begin to tail off and demand cascades for their products.

There is also a high product changeover effect in the pioneering and fast moving IT consumables market. So iPod and MP3 rule today, but only yesterday it was CD, DAT, and Vinyl. Tomorrow’s technology might be absolutely dissimilar. Wireless technologies could substitute the call for a corporal music player. (Linzmayer, 1999)

In 2005 Apple triumphed a legal case that forced Bloggers to name the sources of information that forestalled the commencement of innovative Apple products. It was deduced that Apple’s individual workers had trickled hush-hush information about their latest Asteroid product. The three individuals’ indicted, all owned Apple acknowledgment locations, and were gigantic devotee of the company’s products. The quagmires had emerged on their sites, and they were strained to make public their source. The judgment saw commercial discretion as more essential as the right to communication of individuals. Apple is susceptible to disclosures that could reduce their future profitability. (Cellini, 2004)

The sickness of the company’s chief executive Mr Steve Jobs also appears to threaten the future survival of Apple Corporation. Since he took over from the then manager the performance of the company has been on an upward trend, his absence is highly felt and will continue to be noticed I terms of strategic decisions and policy implementation that has ensured successful industry positioni9ng of Apple Corporation. (Cellini, 2004)

Conclusion

Big organizations are associated with small but very sensitive issues. Apple is on an upward trend and this may continue if clients continue to get service delivery that they expect. In this particular company we had a number of issues ranging from customer dissatisfaction to non compliance. Good organizations put customer needs first by establishing a mechanism from where customers can be able to air their complaints. If this is done then Apple Corporation will be able to determine whether they are meeting their customer expectation or not and recommend the appropriate action.

Prosperity in business is brought by adhering to customer care, good relationship with the outside parties. Even though Apple’s brand has attracted a large public attention, still a lot needs to be done in maintaining its reputation. This entails establishing mechanism for addressing customer complaint, schemes for rewarding customers perceived to be loyal to the company and committees for explaining the importance of compliance.

The company should be able to invest in other industries as well. The rationale behind this is to mitigate intrinsic risks in a particular industry. Apple Corporation has invested heavily in the industry of electronics and it would be wise to invest in a different industry i.e. Agriculture. This is a financially sound decision. Modern day managers are known to be risk averse and may not be able to undertake risky investment decisions.

It is also important that within this line of electronics different products are produced to match the changing environmental needs. Apple Corporation has ambitious and aggressive future plans that will be able to maintain its competitive advantage while at the same time taking the responsibility for its actions on the environment.

References

Cellini, Adela. “The Story Behind Apple’s ‘1984’ TV commercial: Big Brother at 20”.2004. Macworld 21.1, page 18. Web.

Fisher, Anne. “America’s Most Admired Companies”. 2008. Fortune 157 (5): 65–67. Web.

Leopold, Todd. “Why 2006 isn’t like ‘1984’”. 2009. CNN.

Linzmayer, Ronald. Apple Confidential: The Real Story of Apple Computer.1999.No Starch Press. Web.

Reardon, Marguerite. “Apple ships 100 millionth iPod”.2009. CNet.

Steve, Jobs.“Apple Media Advisory”. Apple. 2009.

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