Apple Strategic Problems

Topics: Apple Inc., Mobile phone, IPhone Pages: 6 (1855 words) Published: December 13, 2012
Nowadays many people around us use apple’s products. For example there is an iPhone, iPod, iPad, and iMac. The change of the Apple’s management strategy has a big impact on our daily life, so we conducted research on actual management situation. Apple co. sells both hardware and software products and join the personal computer, mobile, and music business. Apple co. recorded the highest market capitalization of about $660millions ever in the U.S market. Above the information, Apple co. is a success corporation, but all of us are not always satisfied. There are three problems about Apple’s management strategy; Price, Policy problems with telecom company, and CSR. Price strategy is the biggest problem of them. Apple’s products are higher than others in most cases. Although Apple’s sales are kept by its good brand image until now, because both personal computer and handset market keep growing rapidly, many competitors will join the market in the near future. So, a price war is conducted all over the world now, will be more intensive than now over the next a few years. Thus, if Apple co. last this high price strategy relying on the brand image from now on, its sales will decrease soon. In this essay, new management strategy to resolve these problems will be showed. Outline

1. Contextual environment
It introduces in terms of the labor problems in the subcontractors, the increasing of cell phone users, the improvement of technologies, and the lawsuit about the patent between Apple co. and Samsung co. 2. Transactional environment

It analyzes the bargaining power of the suppliers and buyers, the threat of substitutes, the risk of entry by potential competitors, and the intensifying of rivalry. 3. Organizational competences
It shows the strength and the weakness caused by internal factors, and the opportunities and the threats caused by external factors. 4. Recommendations and conclusions
It consider the above the analysis, provide a new management strategy in terms of price, policy, and CSR.  
Contextual Envrionment – Macro Environment
For Political, the most critical point is the labor law. More and more criticisms about the poor working condition in Apple’s supply chain – China Foxconn Company despite the huge profit of Apple each year. This makes the corporate image of Apple unclear and some people gave up Apple products because of this reason.

Economic Factors
For economic factors, the constant growths in world GDP (4.3% annual growth in 2011 and 2.7% for 2012) proofs that people are generally become richer and more affordable. As they have more money, they can buy something more than they need. This gives raise to many hi-tech products and related industry.

Sociocultural Factors
The change in lifestyle also gives raise to hi-tech products. Nowadays, cell phone become so common that some people may own more than one at the same time. Cell phone has become a basic necessity in people’s life in some region. In 2011, among 7 billion populations, they own a total of 5.9 billion mobile subscriptions. Also, companies launched a wide range of products targeting different age group so that people aged from 6 to 80 own cell phones. Also, nowadays people are more and more aware of the corporate social responsibility. This is related to the business ethics and will affect the corporate image.

With the rapid advancement of technology, the chips and microprocessors become smaller but more capable. The size of the transistors passes the limit of 14nm. By Moore’s Law, the number of transistors double every 2 years (the more the transistors, the more capable the CPU is). Smartphone has a market share of 27% of total cell phone sold. This means people are switching from traditional feature phone to smartphone gradually. In US, it takes only 2.5 years for smartphone to reach 40% penetration from 10%. Also, it takes only about 2 years for tablet to reach 10% penetration. The hi-tech...
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