Apple Strategic Management

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STRATEGIC MANAGEMENT

Apple, Inc.
Strategic Management Case Analysis
Kait Vinson 4/18/2011

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STRATEGIC MANAGEMENT CASE ANALYSIS: APPLE INC.
SECTION ONE: CORE PROBLEMS & ISSUES In the transition from Apple Computers, Inc. to Apple Inc. over the past decade, the company has faced many problems with its strategy in regards to navigating the personal computer industry. Some of the initial problems included the fact that all of the company’s computer products ran on different operating systems. There was a lack of compatibility with IBM computers which garnered the majority of the market will into the 1990s. In addition, CEO Steve Jobs’ management style that dedicated company spending on Mac computers was a point of contention. All these initial problems ultimately caused Apple’s fall in market share from 11% in the 1980s to around 5% in the 1990s. In an effort to regain and obtain more market share, Jobs created the retail stores for Apple, including online and physical store locations. While Jobs’ vision to create an easier purchasing option in addition to a unique buying experience is clear in retrospect, it was not effectively communicated externally of the company. This caused discontent with Apple resellers who thought that Apple’s new retail stores were competing with their business, leading to a series of lawsuits eventually settled outside of court. The lack of solid connection between Apple Inc. and its resellers has proven to be a challenge for Apple, in addition to the diversification of its product lines. With the speed of the technology industry accelerating, Apple’s main strategic issue will be how to allocate its resources involving different product lines and reconciling those products with the unique buying experience Apple has created as a retailer.

SECTION TWO: SWOT ANALYSIS
Strengths
Differentiation of product areas: Apple’s transition from a computer into a technology company has put the company in an advantageous position in that they can use various

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technologies innovated across many product lines such as, the touch screen on the iPhone that has been adapted to the iPod and iPad. Innovation: Because Apple is positioned as a technology company, it can use its research and development resources to innovate new technology for many products simultaneously. This allows the company to quickly adapt technologies into new and improved products, thereby continually increasing technological advancements of product lines concurrently. Retailer sales strategies and methods: Apple’s dedication to retail sales has allowed the company to create a buying experience rather than simply a method by which to purchase their products. Customers come into the retail locations and visit the online store just to feel what it would be like to become an Apple product owner if they are not one already. This elevates the status of the brand and increases awareness, putting Apple in a unique position. CEO Steve Jobs’ leadership: Because Apple has been built and directed by Jobs, the company primarily follows his direction with little resistance despite any potential risks involved, such as in the case of the introduction of the retail stores. This has created a corporate structure and culture that allows Jobs to make decisions and alter the course of the company according to his strategic plans. Apple can thus quickly adapt to changes in technology and market needs.

Weaknesses
Connection with resellers: Despite the fact that Apple settled the cases concerning competition with its own resellers outside of court, it still seems to be somewhat of an issue. The experience Apple created for its customers in its online or physical retail stores is difficult to duplicate for a reseller especially when taking into consideration the reseller’s own brand image. The discontinuity can hurt both Apple and the reseller because customers may not receive the same treatment between the two options....
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