Abstract
Apple Inc. is among the most successful technology companies globally. The broad variety of products and services under the brand’s name has been pivotal in improving the company’s global sales. The objective of this discussion is to assess the issues that have affected Apple since the resignation of the enigmatic CEO Steve Jobs, and the entity’s ability to thrive in an industry that is robust and highly competitive as presented in the case study. The research identifies the process of adjustment after the resignation of Jobs as the most critical issue that Apple has faced due to the inevitable need to readjust. The discussion also evaluates the technology industry and the dynamics of the industry that include intense competition, pricing, and the introduction of disruptive innovations as critical issues currently affecting the industry. The research concludes that Apple should devise a re-engineering approach where the existing products and services undergo a period of restructuring to suit the needs of the consumer. The study also notes the need for Apple to continue with the diversification by following the five- year action plan.
Introduction
The case study presents a summary of the recent emerging issues in one of the largest technology companies globally, Apple Inc., and the challenges and successes that the company has endured in the last decade. The authors commence by reaffirming Apple’s foothold in the Smartphone and tablets market and the reality that the company could soon be the first to achieve the trillion – dollar status (Gamble and Varlaro, 2011). The case study then proceeds to present a reflection of the issues that Apple is dealing with despite the overall notable success in respect to revenue and brand recognition. The objective of this discussion is to dissect the internal and external environment of Apple through the analysis of the case study.
The Problem Statement
The problem faced by Apple relates to the ability to survive in a rapidly changing environment even as the company deals with matters of succession in a highly competitive industry. The leadership regimes after the demise of Steve Jobs have had the challenge to keep up with the competition in the immediate market as the company restructures processes and products in the market (Proctor and Bicknell, 2011). The case study cites the underlying competitive rivalry within the market as the primary challenge that Apple faces currently as Cook and the other vital managers devise new strategies to counter such competition.
The Causes of the Problem
Two critical issues stand out in the case of Apple and have a direct relationship with the underlying problem. The first point is the question of the ability by Mr. Cook to match the innovative capability of his predecessor, as he asserts his authority in his new role. The demise of Steve Jobs, after a successful span at the helm of the company, is a significant cause of the current problem. The other root of the problem is the reality that the new CEO is inheriting a company in a highly competitive environment, a matter that complicates the ability by Mr. Cook to focus on internal processes. The emerging competition is also complicated due to the emergence of disruptive technology that is undermining Apple’s innovativeness and ability to survive within the broader technological landscape (Fischer, Staffieri, and O’Rourke, 2011). Indeed, the Smartphone, tablet, and personal computers market has become excessively competitive. Despite the limits of entry, and the reality that the market requires substantial investments, more companies have seemingly found a way to survive and compete aggressively in the industry.
The study also reveals that Apple was struggling to adjust to the obvious structural consequences of Steve Jobs resignation and eventual demise. In the case study, it is clear that Apple has been struggling with the internal process of replacing an enigmatic leader who has been at the center of significant success in the company. The ensuing competition would require ingenuity as Mr. Cook took over the mantle as the new Chief Executive (Gamble and Varlaro, 2011). The case study presents the industry as highly competitive and notes that rivalry between Apple and Samsung was the first challenge that Mr. Cook had to contend with, even as he engineered a new direction in the post-Steve Jobs period.
The technology industry has experienced apparent shifts in trends in the last five years as consumer preferences, and tastes change rapidly. The study notes that Samsung and Hewlett–Packard have emerged as the key competitors in the Smartphone and computer industries, respectively. According to the authors, the rivals in the respective markets seem to use innovation, disruptive technology, and pricing as critical approaches in dealing with the underlying competition in the market. The study reveals that rival companies such as the Hewlett-Packard are using differentiation strategies and innovative ideas such as information technology consultancy in the attempt to deal with the severe competition in the market (Gamble and Varlaro, 2011). The result of such bold measures is the reality of diversification in the revenue stream, which assists the company to remain afloat in the Industry.
Evaluating Alternatives
Apple has responded to current competition in the market by diversifying the product offerings into new segmentations that include entertainment and cable TV networks. However, as noted in the annual revenue reports, the company’s competitive strategy has failed to restore Apple’s net income to the level of success notable in the year 2012. For instance, based on net-income metrics, Apple recorded a total income of $ 39,510 million in the year 2014, as opposed to $ 41, 733 million in the year 2012 (Gamble and Varlaro, 2011). The total income metric is an indication of a failure in maintaining the entity’s competitive advantage. The company may have to evaluate the available options with the intention to enhance competitive in the industry. As noted in the case study, an important approach that is critical to ensuring that entities succeed in the technology market is rapid innovation in response to the changing technological landscape.
The assertion is based on the reality that since the year 2011, Samsung and Apple have seemingly competed on the platform of innovation and the ability to introduce products that are responsive to the rapidly changing needs of consumers. The same approach is observable in the personal computers market. The author notes that both Hewlett Packard and Apple have been competing on innovation–based platform as the two giants attempt to overshadow each other in the production of customized products for the consumers (Gamble and Varlaro, 2011). The issue of pricing is also notable in the assessment of the case study. As noted, Apple had a challenge in the initial stages of introduction of the Mac due to issues of premium pricing. Hewlett- Packard has often used this apparent high pricing of Apple’s products to cut a niche in the market on the premise of a cheaper option (Thao and Tsanthaiwo, 2017). The three aspects, innovation, customization, and pricing have become critical issues in the industry in the determination of success for the companies.
The Choice/Rationale
Apple has two fundamental options that the company may consider. The first alternative is to continue with the current diversification plan, which has certain advantages such as the expansion of the entity’s revenue pool. The option allows the company to monitor each of the portfolios differently by assessing the most successful products and services in the market (Nwogugu, 2015). The evaluation may allow the company the opportunity to decide on the products currently in the market that should face discontinuation vis-a-vis those products that may do better with a revamp of the processes surrounding the outcomes regarding quality. The company may follow the plan by either introducing original ideas or concepts such as the IPad and the iPod or seeking to improve the products currently on offer by other companies.
The idea of diversification seems to work well with other products such as Apple TV, which is Apple’s cable network service that is currently competing with companies such as Netflix in the provision of cable services to consumers (Gamble and Varlaro, 2011). However, the company may also focus on another option, which is the need to re-engineer products and services that are not ordinarily new. For instance, Apple stores and iTunes will remain an essential source of revenue for the company and should undergo recurrent restructuring and reconfiguration to suit the needs of a conscious consumer market (Al-Laham and Huth, 2011). In argument, both approaches are critical for the company because they allow the entity to focus on developing new products, while also making current products better to suit the emerging markets.
Plan
The action plan will be based on a five-year schedule where the objective will be to reinvent the process and concepts that go into the development of services and products. The action plan will aim to ensure that Apple maintains a competitive advantage in the current technology industry through the diversification of products and the reinvention of the existing services offered in the industry. The project will derive the resources from the company’s finance department through the research and design departments. The funds will be used in the process of research and the establishment of the necessary environment within which the prescribed alternatives will be developed. The scope and timelines of the implementation may undergo systemic review to assess the progress and constraints of the project. The first two years will focus on deriving information from the various sources in the market. The project will then proceed to implementation after receiving the resources and funding in the third year. The fourth year will involve assessment and improvements. In the fifth year, the company will conduct an analysis and decide on the way forward. The plan is in line with Proverbs 21: 5 that state “Careful planning puts you ahead in the long run; hurry and scurry puts you further behind” (King James Bible, 2017).
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- Fischer, L., Staffieri, A., & O’Rourke, J. S. (2008). Apple, Inc.: Pricing the iPhone (A). doi:10.4135/9781526404183
- Gamble, J. E., & Varlaro, J. (2015). Case 3: Apple Inc. in 2015.
- King James Bible. (2017). Proverbs 21:5-7 KJV – The thoughts of the diligent tend only – Bible Gateway. Retrieved from https://www.biblegateway.com/passage/?search=Proverbs+21%3A5-7&version=KJV
- Nwogugu, M. C. (2015). The Case of Apple Computers, Inc.: Failed Strategic Alliances, Corporate Governance and Risk Management. SSRN Electronic Journal. doi:10.2139/ssrn.2622286
- Proctor, N., & Bicknell, T. (2012). Apple After Steve Jobs, Re: Museums. Curator: The Museum Journal, 55(4), 479-485. doi:10.1111/j.2151-6952.2012.00170.x
- Thao, T., & Tsanthaiwo, S. (2017). Apple Inc. In the Years to Come. SSRN Electronic Journal. doi:10.2139/ssrn.2993019
