Assignment Leadership Challanges for Apple in 2012

Assessment of Current Strategic and Leadership Challenges for Apple Inc.

Apple’s Past Performance
Apple Computer was founded in 1976 by Steve Jobs and Steve Wozniak, a pair of 20-something college dropouts, starting off by offering Macintosh personal computers.
The new formed company managed to revolutionize the “domestic life and subsequently information storage and consumption” of generations to come. Despite its impressive rapid growth and high profits in late 1980’s, the company had to later transform itself, in early 2000’s into Apple Inc., offering a wide range of innovative high-tech non-PC products.
Over the last 10 years Apple transformed itself from a ‘Good’ to a ‘Great’ company. As soon as Steve Jobs became the company’s interim CEO in September 1997, after being forced out in 1985 , he started building his leadership strategy by focusing to get “the wrong people off the bus” and narrowing the company’s product line in an extreme secrecy practice environment.
Steve Jobs stood out as a visionary and innovative leader, designing its products from scratch. His leadership strategy was to deliver breakthrough, highly integrated user experience. Jobs carefully added top-notch resources and managed company’s milestones so that Apple Inc. could continuously have a competitive advantage and increased customer value.
Apple’s Inc. Current Performance
Throughout history, Apple delivered to its customers complete computer solutions, including hardware, software, and peripherals that allowed consumers to simply “plug and play”. Apple’s target market could be split into: home users, small and medium sized business, corporate companies, education segment and young-creative individuals that prefer high-tech, eye-catching products.
Starting with 2010 Apple Inc. viewed itself as a ‘mobile device company’ , offering a wide range of products: from Macintosh desktops and portables to Ipod, Iphone and Ipad series, along with music, peripherals and software services.
The goal of Apple became to differentiate its products among the intense PC and mobile device industry competition by imposing a premium-price differentiation strategy and promoting itself as a ‘hip alternative’ solution. Nowadays, the company’s mission is to “design Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software.”
Thanks to its continuous delivery of cutting-edge products and creative marketing campaigns, Apple announced a total of $35 billion revenue and a net quarterly profit of $8.8 billion in the third fiscal quarter of 2012.
The last fiscal year has also been significant for Apple TV sales, as the company sold 4 million units so far "It's still at a level we would call a hobby, but we're still pulling the strings to see where it takes us" - Cook says.
Apple’s Competition
As Apple shifted towards a digital-hub strategy with a diverse product line, competitors arose from both the PC industry as well as from the mobile industry.
Even though continuously developing their software, introducing sharp quality design and implementing marketing savvy strategies, the well positioned company is threatened by competing companies using new technologies and keen web presence.
Strengths
 Positively world-wide known brand
 “First comer” innovative company for cutting edge products such as Macintosh computers, iPod, iPhone, iPad, AppStore
 Exceptional design and light-weighted products
 Loyal customer base
 Impeccable designed retail stores with interactive customer platforms
 Strong R&D department
 Use of environmentally conscious materials
 Own accessory market, high-priced products, but appreciated by Apple users
 Possibility to store paid applications on more than one Apple products Weaknesses
 Replacement of known visionary CEO
 New management
 Fluctuations in foreign currencies make profit predictions in foreign markets doubtful.
 Historically incompatible software.
 Lower market share than Microsoft products
 Decreased possibility for non-American users to use the voice-activated technology “Siri”
 Expensive products (in the same time it is a company trade-off)
 Usually Apple products fail the inimitability test (thus increased patent lawsuits)
 Apple Maps when compared to Google Maps
Opportunities
 Joint venture strategies
 Expansion to Asian and African markets
 Increased demand for iCloud services
 Growing market for efficient energy (“green”) products
 Constant growth for high-tech devices
 Possibility of successfully re-entering the TV market with Apple TV
 Change in population age structure Threats
 Android fast expansion
 Samsung strikes as a fast innovator in telecom industry
 Release of Windows 8
 “Open Handset Alliance” consortium
 Similar cross-platforms offering more free storage space then iCloud, e.g. Dropbox
 Cheaper tablets released by renown competitors, e.g. Microsoft, Amazon
 Unfavourable judgements of ongoing lawsuits

The Patents War
As an intensive competition takes place in the technology industry, numerous lawsuits arose on design and intellectual property for Apple.
Recently Apple was awarded with $1bn of damages against Samsung for allegedly copying its technology to develop a smartphone that had infringed six of its seven key patents . Apple still requests $535m damages from Samsung, as considers their products as created based on Apple’s concepts.
Future Outlook
So far the new CEO, Tim Cook, surpassed all expectations when Apple’s market share in early 2012 was more than $600 billion, with a current share value of $700.10 . The first fiscal quarter of 2012 represented a historically moment for Apple, as it proved to be the most valuable company in the world-wide history.
At the present moment, Cook’s mission is to continuously innovate in the tech-world, deliver market-smashing returns and compete with fierce up-coming companies by offering the right prerequisites for a sustainable competitive advantage, and successfully facing the “challenges that the world is bringing” .
The new CEO’s responsibility is to exceed Steve Jobs’ ability to look through different aspect lenses and have the competence to scale-up the business by creating future profit and sustainability.
September 2012 surpassed again all expectations, when more than 2 million pre-orders were registered for the new iPhone 5 (more than double the previous record of one million held by iPhone 4S) in just 24 hours . Internet sources estimate that by 28th of September around 8-10 million units will be sold.
Recommendations
 In order to put its stakeholders first, Apple should not “become complacent” but continue innovating new products so that it can stay ahead of its competition.
 Apple should continue with its international expansion into Asian and African countries, especially as Asia is a fast growing technology continent. If Apple manages to penetrate into these markets, it could most probably increase its market share and support its competitive advantage.
 Apple should continually invest in research and development to stay ahead of competitors and create high quality, easy to use and creative design products.
 The company should improve competitive position relative to low-priced competitors by focusing on pricing flexibility.
 The company should strategically form valuable partnerships. Joint ventures could be formed in the PC, movie studio and music industry, thus consolidating Apple TV’s position on the market.
 Develop more customer engaging programs though marketing online campaigns.
 Develop a top management team that can consolidate a long-term successful business strategy.