Question

Strategic Management

Section 1 = Part 3 of project

Consider the same company ‘Apple’ in the following questions.

1. Evaluate the performance of the main activity of your selected company (performance of principal product/service). What type(s) of criteria do you use to evaluate this performance? (2 marks)
2. What type(s) of control of employees and production processes is/are used by your selected company? (1.5 mark)
3. How does the corporation manage the environmental risks? (2 marks)
4. Evaluate the competitive advantage of the corporation on its market. Suggest some recommendations for the managers of your selected company to improve this competitive advantage. (2.5 marks)

Answer 1

​​​​​​1.  Evaluate the performance of the main activity of your selected company (performance of principal product/service). What type(s) of criteria do you use to evaluate this performance?

Using Busines model canvas - value proposition : Apple has defined for itself a broad set of value propositions that it offers to its customers :

- cutting edge products launched early for the tech-savvy consumer

- great customer service for those who value it

- diverse product range from high-end (iPhone) to low-cost (such as iMac and iBook computers) to suit a wide range of customer needs

Prior to the stock price crash from the recent pandemic, the stock price for Apple has been consistently rising from last year, trading price before the crash was nearly double that in June last year according to Markets Insider. And always exceeded the quarterly revenue forcasts in 2019 (Insider Inc., Finanzen GmbH, 2020). This shows a high regard and demand for their products by consumers.

2. What type(s) of control of employees and production processes is/are used by your selected company?

Apple has a strict business conduct policy that governs the way they do business worldwide, according to their website. It lists the principles it adheres to when conducting business - such as Honesty, Respect, Confidentiality and Compliance and advises all employees and contractors to follow the code and to report any violations of the code. (Apple, 2010)

In a recent Guardian article, it was noted that employees interacting with customers were told to not use certain words that might imply there were issues with the products. This kind of censuring has not always worked for the employees who struggle to then communicate freely with the customer. There is also mention of 'creating drama' for customers with claps and cheers which make the employees feel like they are being used as props on a stage. (Bunning, 2018)

Apple goes to great lengths to keep its production processes a secret, and usually keeps the development and design groups largely separated from the main company. Departments and areas where innovation is high, and prototypes are available are highly regulated to ensure no leaks happen. It also outsources most of its manufacturing so it can control and keep its production costs low. (Interaction design foundation, 2020)

3. How does the corporation manage the environmental risks?

Apple has had some bad publicity with regards to its environmental impact. The firm has take a lot of steps to ensure these are now corrected as much as possible.

- They have ensured that 100% of their data centres run on renewable energy sources so that new cloud features do not adversely affect climate change

- Product raw materials that were found to be harmful have been replaced

- They designed a robot to dismantle old phones to recycle parts as needed

(GetOrchard)

4. Evaluate the competitive advantage of the corporation on its market. Suggest some recommendations for the managers of your selected company to improve this competitive advantage.

Apple has a strong customer base and no near competitors who offer the same value proposition. The close competitors are however catching up in popularity due to more price-sensitive customers entering the market. Its competitive edge is mainly due to its control of the software/hardware of its products all of which are patented and closely guarded secrets. It also offers easy plug-and-play solutions such as its desktops which target consumers who convenience and ease-of-use. These options have increased (and continue to increase) Apple's market share. In phones and music players, the firm has developed innovative designs that have helped drive the products early into a niche market that is now hard for other manufacturers to break into. New and creative products like iPad have revolutionised the type and need for products that the market was not even aware of. In this trend, the firm can offer additional products that customers might want to use in the present age :

- health has taken on new meaning these days and products that measure your health using a smartwatch would likely be very valued by consumers (e.g. identify if the user has a temperature)

- virtual reality is taking on new importance in these days of lockdowns and virtual tours of places/locations would likely be something that could interest consumers, and allow them to visit a national park or a famous museum from their armchair.

References :

Apple Inc. (2010) Business conduct policy

Bunning, Jonny (2018) Claps and cheers: Apple stores' carefully managed drama. The Guardian.

GetOrchard. iWaste: The iPhone Environmental Impact.

Insider Inc. and Finanzen GmbH. (2020) Markets Insider stocks.

Interaction design foundation. (2020) Apple’s Product Development Process – Inside the World’s Greatest Design Organization.