A Case Of Apple Inc.
The paper looks into the practices, leadership approaches, and organizational culture and values in order to respond the complex and situation of chaos in the environment. It is point of importance that Apple Inc. is facing competition from competitors as their market share is more than Apple Inc.’s market share. However, the company has also progressing and its future is bright. Leadership approach of the company calls for perfection and innovation lies at the heart of operations of the company. The company seems unaffected of the competitors’ steps because ration of profitability of the company is the highest. However, it is recommended in the end that the company should make an operating system like android so that its competitors do not have free environment. Moreover, the company should also encourage employees to lead innovation projects as well. Current leadership and organizational culture are aligned with the environment and positive results show that organizational practices are good.
Apple Inc. was the most innovative and unique company in the world when Steve Jobs, founder of the company launched smart phone and suddenly the popularity of their devices grabbed high market share. The company became largest company in terms of capitalization and it had been a prestigious company in the corporate world. However, it is reality that high tech industry is also highly dynamic and there is not static environment at all. This is why, Apple Inc. which has been market leader in smart phone industry; now, it is facing environmental challenges. Apple Inc.’s cloud system is at stake because people require smart phones and devices which are highly adaptable for changing situations. Apple Inc. is still one of the most prestigious companies, Tim Cook is leading Apple in a different way, so that there could be betterment (Adam and Lashinsky, 2015). However, increasing share of android devices and successful duplication of Apple Inc.’s devices and technology by competitors like Samsung, Google, and Huawei have made the environment for the company highly complex and dynamic. In the following, this impact on the company is going to be discussed so that company’s environment and culture can be understood and recommendations can be made.
Major And Complex Changes That Impact Apple Inc
Apple Inc is the most innovative company in the smart phones and personal computer sector of tech products. The company is highly based on its outsourcing structure through which the company gets products manufactured in China and increase in labor cost and political unrest in China might affect the company and prices of its products might increase, which are already high. Increase in the value of US dollar might also affect the company as the company has to charge already high prices, higher for its key and most profitable markets of China, Europe, and Japan (Jones, 2013).
Changes In Technological Environment Of The Company
This is the most important environmental change for the company because it directly affects the business and operations of the company. The company has to face strong and intelligent response from its competitors where Google and Samsung have shown strong ability to bring innovative products like Apple Inc. It is known fact that Samsung and Huawei have brought innovative smart phones just like Apple Inc. and their specialty is their use of android operating system. Unlike Apple Inc.’s captive operating system which does not work for smart phones of competitors, these companies have brought products running on android operating system. It means, the Apple Inc. has been facing strong environmental pressure from competitors in smart phone category of business and moreover, increasing use of smart phones has also led decrease in sales of Apple Inc.’s personal computers (BAJARIN, 2013).
Competitors are pursuing Apple Inc.’s products actively and due to their strong capabilities to provide consumers with alternatives of Apple Inc have been their strong capabilities and strengths. For example, apart from smart phones and personal computers, competitors are coming up with other services as well. Android Pay is one of such examples which has been launched by Google Inc. and this service has same features and attributes present in Apple Pay. It has influenced the environment of the company in a way that Apple’s signature brands and service do not remain unique any longer. This is major influence on the company and it has led the company to have been facing strong environmental influence in the result of alternatives to its brands (Day, 2014).
Highly Specialized Product Line Of The Company
High level of specialization is success and it is said that in modern era of business, companies with high level of specialization have more chances to be successful. High level of specialization causes competitive advantage and this competitive advantage is running force for the company producing the products. This has become a pressure force for Apple Inc. because competitors have diverse range of product line and they are presenting with new products and services, therefore the strategies are focused by the company (Bersin, 2012). For example, Samsung is a conglomerate and it has been making many components which are used in the manufacturing of Apple Inc. Moreover, the company has smart phones and mobile phones capturing all segments and price levels in the market. Similarly, Huawei has emerged as one of the main competitors of Apple Inc. as well as of Samsung. Huawei has offered diverse kind of products for different segments and price levels and it has also worked hard to add innovative features in its products. On the other hand, Apple Inc. does not have such wide range of products and this aspect has become a serious issue for the company (McCracken, 2013).
Above factors have been posing serious issues and concerns for the company which is no doubt is still the number one innovative company in the world. The sector in which the company is positioned is dynamic and it is extremely dynamic. Preferences and demands of people have been changing and they are seeking to have innovative products so that they can attract consumers. On the other hand, there is one of the most important aspects which are over use of specialization which has disturbed the company in its attempt to expand. It is no doubt the specialty of the company but it has become inconsistent with the environment in which the company has been operating (Johnson et al., 2012).
Current Leadership Approach And Culture Of Apple Inc. To Deal With The Complex Environment
It is true that the competition against Apple Inc. is fierce and the company has been feeling the challenge of hyper competition from the competitors. It is important to note the leadership approach which is in place currently in the company in way to deal with complex environment of the market. The leadership approach of Tim Cook is not much different from Steve Jobs and the company still aims tight control over the business and processes of its products (Lashinsky, 2011). It is evident with the fact that the company controls its own technology destiny which means that the company has the culture to manufacture and make components used in manufacturing of smart phones. The company designs many of its chips and sensors which are used to make power for its devices (TETZELI, 2016).
Service Oriented Company As Well As A Device Company
There is another example which is enough to state that the company still in touch with its service oriented business and it is in this manner that the company has the culture to be good at service oriented company as well as a device company. It is estimated that 12 percent of the company’s revenues are generated from digital services and these services include iCloud, Apple Pay, Apple Care, and its unique App store. The CEO of the company Tim Cook is also aware of importance of this component of the company and he expresses in these words that digital services of the business have been growing at faster rate than hardware business and its sales. It means, the leadership has the approach to focus on uniqueness and it is the result of the focus on digital services that leadership of the company states it as part of the business which can stand alone. It also shows that the company’s leadership has been focusing on services component of the business (MEYER, 2017).
Focus On New Segments And Fashion Brand Of The Company
The company leadership does not seem influenced by the increasing number of sales and high profits of companies like Samsung and other competitors. The company has never focused on sales and its culture is still to bring innovative products to the world. For example, the company has signed a deal with IBM to sell its products and the company is not focusing on business segment. Moreover, another example is iPad Pro which has been manufactured and positioned for business users. Furthermore, it is noted that the company has been planning to reframe iPad to make it next generation business laptop. These practical steps and initiatives of the company are enough to bring the concept that the company has been focusing on innovation as well as finding more room for its products. The company has also been repositioning its products so that the products can appeal more segments of the market. Practical examples of positioning iPad for businesses are enough to state the company has been trying to make maximum out of their products (Fiegerman, 2016).
The company has the culture to support the fashion aspect of the brands and the leadership is also aware of this aspect of the business. For example, `the company has offered Apple Watch to the market and there has been fashion aspect of the product which means that the company gives this aspect importance. There is another important aspect which is related with breaking news of Apple Inc products and when these products are offered to the public then the there is long queues outside of Apple stores. Such luxurious posture is only destined to Apple Inc and the company takes this luxury at its heart. It might be the reason that the company has not been trying to change its focus just to respond the competitors’ increasing sales (Lashinsky, 2015).
One billion individuals gone to the App Store to discover what merits putting on their iPhones, and Apple is depending on more downloads (and the subsequent income). Apple advertising boss Phil Schiller now runs the store and has rolled out more improvements in the previous six months than any time in recent memory, presenting limited time arrangement and growing memberships to improve applications a repeating business (Dudovskiy, 2013).
Apple now understands that attempting to be flawless out of the entryway is misrepresented. iOS 10 is being considered by open beta analyzers. The new document framework that will make a big appearance one year from now is now in designers’ grasp. Indeed, even Apple Watch mirrors the organization’s readiness to put out an item, see what clients like and don’t care for, and respond in like manner (Bajarin, 2012). From autos to human services to unique gushing substance, Apple is profiting wagers on lucrative markets that are swarmed, complex, and probably not going to be commanded by any single organization. “Our procedure,” Cook says, “is to help you in all aspects of your life that we can (Spence, 2015).”
Financial Strength And Missionary Approach
The organization has $233 billion in real money available. It has spent roughly $117 billion on stock buybacks in the last two or more years. While some observe these budgetary actions as diversions, this is all piece of Cook’s professionalization of the organization. Such monetary advancement can supplement Apple’s different qualities. As Cook says, “I need Apple to be here, you know, until the end of time (Mills, 2017).” Apple Inc. has the top return in the market through large investments (Trainer, 2016).
Steve Jobs had a mission: to promote PCs as “a bike for the psyche,” and to make them as wonderful as some other protest that individuals think about in their lives. Cook has made Apple an ethical organization, as well, in his turning out and supporting transgender approaches; by battling the FBI over customer security; and in his critical push to make Apple a natural pioneer in a business that is unavoidably asset escalated. “My conviction is that organizations ought to have values, similar to individuals do,” Cook says.
Above analysis of Apple’s current culture and leadership approach indicates that current leadership is more socially responsible than Steve Jobs. It does not mean that Jobs was not caring of values and morality. However, some practical examples from Tim Cook period of leadership indicate that the company has been supporting for high ethics and morality like fighting the FBI on the issues of privacy and the company’s convictions to support transgender policies. It has also shown under the Cook leadership and approach that the company has focused very much on financial strength as the company has $233 billion in cash and current leadership approach has focused on stock buyback as in last two years, approximately $117 billion have been spent on stock buyback. Furthermore, the company aims to enter into different market segments and new frontiers which are not conventionally its areas of operations. Current leadership approach is to help people in every part of the life as much as the company can help them. These practical experiences and examples from the company’s story state that the company is less influenced by competitors’ imitations and the invasion of android operating system. The company is focused on its business and it has been opening new horizons for further growth into the future (Adam, 2012).
Management And Culture Is Relevant For Effective Approach To The Environmental Pressures
In the first part of this paper, it is stated that Apple Inc has been facing many challenges from its competitors. These challenges are mainly due to popularity of Android operating system and due to this operating system, other competitors like Samsung and Huawei are coming forward to fill the gap. This is the reason that number of sales of products made by Samsung and Huawei are rising and number of units sold by Apple Inc. has been decreasing. It shows that Apple Inc. has been facing issues due to actions by its competitors. However, the 2015 figures of the company provide completely a new perspective under which the company has been having highest ration of profitability in the smart phone category of business (Savov, 2016).
It is vital to first give some insights into the figures of 2015 in which the company has shown considerable progress in terms of profitability. According to an article posted by Daniel Eran Dilger on the website of appleinsider.com, the company has taken 94 percent of share from the world’s global smart phones profits in the year 2015. It shows the strong arm of the company which is expressed ij terms of highly optimistic and good indicators and measures. It means that the company has got a prestigious position in the world through which the company has been able to grab 94 percent of share of profit. It is such a high and too high profitability of the company and it is due to the perception of the product, people have in mind regarding the products manufactured by Apple Inc. However, there is another important aspect of the situation that the company has sold only its most profitable products like tablets and smart phones. Moreover, the company has also increased the Mac unit sales which have caused high profitability for the company. In the year 2015, the company also launched NFC payment platform and in the music streaming market, the company boasts of having one of largest shares in it. Furthermore, the company has been busy to launch new platform for the living room and due to such strongly successful years of 2015, analysts questioned whether the company can ever crossed this performance. It shows that the company is still strongly stood at its feet and it seems less influenced by the environmental changes posed by the competitors (Dilger, 2016).
However, there is needed to bring some changes in the management and culture of the company which can be relevant with the environmental pressures. The company has been facing one of considerable pressures due to popularity of Android operating system and the company uses the operating system which is used solely by its brands. However, there should be such operating system by the company which can help customers to use such operating system compatible with other products as well. For this purpose, the company should launch new operating system as well if it does not want to use android operating system. Moreover, the company can launch a new operating system like Google’s android system and it should allow other companies even to its competitors to use this operating system. Presently, there are three main operating systems i.e. iOs, Android, and Windows operating system. Company should capture this aspect of the market as well because its operating system would be preferred given its prestigious place in the market. For this purpose, the company has to allow innovation at organization level and creativity at individual level so that out of the box innovations and innovative products can surface (Adams, 2015). Furthermore, the company should adopt such leadership approach in which products for middle income segment of the market can also be produced. In this manner, the company would be able to take proactive approach to take market share from competitors. Detailed recommendations would be provided in the following section (Hall, 2016).
Conclusions And Recommendations
The above mentioned analysis concludes that Apple Inc. has been undergoing changes given by environment around it. One of the challenges faced by the company is in the shape of rising popularity of android operating system which has taken majority market share from the most innovative company i.e. Apple Inc. On the other hand, current leadership of the company and culture in the organization does not seem to be much influenced by these environmental changes which show that the company has strong confidence over its expertise. On the other hand, it is explored that the company has been generating profits continuously because the company has taken largest share of profitability in the year 2015. Thus, it can be said that the company has been quite unaffected by its competitors who are mostly relying on the imitation of the products manufactured by the company. In the end, it is proposed that the company should have such leadership style which is supportive of targeting middle income group of the market and can bring innovations for this particular segment of the market.
It is recommended that company should bring a new operating system like Google’s Android operating system which is available for even to its competitors. Moreover, the company should focus on products for lower market segments as well and for this purpose, the company can found new business segment with the new name. However, the company has been progressing good despite of competition from Samsung and other competitors. Therefore, the company is not supposed to face any crisis in near future.
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