Strategic Management 313
News Critique - Topic 1 - The Challenges of Strategic Management *Mishal Ibrahim Mohamed *Didi
1. News item sources
Gross, D. 2010. Major new app store to take on Apple, others. http://www.cnn.com/2010/TECH/02/15/app.store/index.html?iref=allsearch (accessed March 6, 2010). Kincaid, J. 2010. The Wholesale Applications Community Sounds Like A Disaster In The Making. http://www.washingtonpost.com/wp-dyn/content/article/2010/02/15/AR2010021502209.html (accessed March 6, 2010). Mobile firms unite to offer applications. http://news.bbc.co.uk/2/hi/technology/8515813.stm (accessed March 6, 2010). Schenker, J. L. 2010. Mobile Industry Strikes Back at Google and Apple. http://www.businessweek.com/blogs/europeinsight/archives/2010/02/mobile_industry.html (accessed March 6, 2010). 2. Summary
On February 15th 2010, the world's largest 24+ companies that deal with telecommunications have announced that they are tying up with each other to form what they call the Wholesale Applications Community (Gross 2010). This strategy is aimed at creating a unified open platform to create applications to work on any phone, including any carrier and any operation system (OS) that they are using (Kincaid 2010). As we know, Apple dominates the app market with more than 3 billion downloads in 18 months (_Mobile firms unite to offer applications 2010). The operators realised that their current strategy of creating individual applications for each of their phones was not able to come even close to the market share and the competitive advantage that Apple's App store has (Gross 2010). They realized that if they combined their efforts with each other they would be able to serve 3 billion customers collectively (Schenker 2010). Currently all most all third party developers have all been developing for Apple's App Store which amounts to about 140, 000 applications and almost completely ignoring the rest of the market (Schenker 2010)....
Links: to topic
This news critique links to Topic 1 - The challenges of strategic Management in many ways. Firstly the topic talks about what a strategy is and what achieving competitive advantage means. Apple in this case has achieved competitive advantage using its App Store. It has dominated the market for a long time with its applications which other companies were not able to imitate as efficiently (Gross 2010).
Secondly, the topic talks about how there are intended strategies and emergent strategies and the implementation of these strategies. Since Apple had such a market dominance, the original strategy for the other companies were to make applications and application stores by themselves but as the market changed they decided to improvise and implement a new strategy which was to work with each other to make a universal application store that would work on all their phones (Schenker 2010). The aim of this strategy as explained in the summary was to even the market and reduce the competitive advantage that Apple had over the rest (_Mobile firms unite to offer applications _2010).
4. What can be learnt
There is a lot of things that can be learnt from this. For one, it shows the importance of implementing strategies and the power of achieving competitive advantage. The article said that Apple 's App Store had 3 billion downloads in 18 months because of how brilliant their app store was compared to the rest of the competition (_Mobile firms unite to offer applications _2010). What was also learnt was that no one strategy would work forever and that strategies need to be consistently changing based on the environment around the company as well as what the competition is doing. If the other telecommunication companies just stood still with their old strategy then it is most likely that Apple would gain even more competitive advantage over them. They adapted and changed their strategies to match the market and compete.
5. Future developments
There is a strong debate in whether this would be successful or not. Rob Conway, CEO of the GSM Association is extremely excited about this since he feels that it will be the start of an equal market with much more innovation (Gross 2010). Andy Rubin, Google VP of engineering, on the other hand believes that this is merely a dream and is extremely sceptical that it would work since he believes that the market place is too fragmented and also the specifications of each phone is too varied to create a singular format (Kincaid 2010).
I personally think that this is both good and bad. I do agree that this would create more innovation and ultimately more value for the customers since finally competition would be created in the application market, but at the same time I do notice certain problems. For example if they are creating applications that would work on any phone then I feel it is likely that we might start seeing too much similarity in phones. The sizes of phones would be almost the same, the screen size would be almost the same and so forth. Nothing would be more unique than the other and it is likely that the companies may argue with each other on what the final design should be. Then again if these application are made in such a way that it could fit any size then there should not be much of a problem. In conclusion, I guess time will tell how effective this strategy will be for the mobile phone market.
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