Question

Discuss with example strategic, tactical and operational plans that Apple Company has formed to ensure that they can remain as one of the most competitive software companies in the industry.

Answer 1

Business operational plan of Apple Inc.

Strategic plan sets up the business plan of a company while business plan in turn establishes the business operation plan. Operational plan is the key to run the entire business of company. Operational business plan covers the all areas of company including the finance, manufacturing, internet, operations, R&D, human resources and marketing. Apple Inc. was known because of its lenient business thinking. Apple Inc. has the design, marketing and manufacturing services. Company develops designs and markets the musical players with important accessories. The business of Apple Inc. is managed on geographic basis. There are five operating segments of Apple Inc. such as America, Europe, Japan, retail and others. In US, Canada, UK and Japan Apple owned stores are currently operating.

Like other organizations Apple Inc. all the departments are formed by the placing the similar functions in the groups. As described before the main divisions of Apple Inc. human resource, finance, marketing and productions are adopted by the functional approach. In each division the functional subsystem and departments create hierarchies. Operational management is linked with the production division’s activities.

The people in Apple Inc. are grouped together on the basis of their expertise and resources. It enabled the Apple Inc. to learn from its functions. The present structure in Apple Inc. has focused upon those activities which reduce the costs and increase the flexibility in its operations. The managers in Apple Inc. have a greater control of the organizational activities and avoiding the tall and other several hierarchies. A relative flat structure of the Apple Inc. has decentralized the authorities and responsibilities of its management. The managers and employees at lower levels are encouraged to take part in fostering the company’s strengths. The advantages of decentralization are numerous i.e. enhancing the planning, decision making and control processes. Apple Inc. has focused on its marketing operations on the major business areas like iPod and iTunes. The marketing department shows a great responsiveness to the outside world.

The finance treasury division of Apple Inc. provides the financial policy to company. This department is responsible to handle the international capital transactions of company, liquidity guaranteeing and risk management. In Apple Inc. the role of the financial manager is crucial for the strategic management. The capital required for the R&D is raised by the Finance division which maintains the innovation position of the Apple Inc. Internal problems of Apple Inc. were in the form of the sale force accessing directly to corporations. Apple Inc. relied on the 300 manufactures while IBM had 6000 to 7000 direct salesman. However the Apple Inc. has focused to establish more sales staff. Many issues concerning to these sales person were noted regarding the prices of products. Apple Inc. has also marketing problem as it failed to communicate the Macintosh’s business image in market. The fact that marketing strategy was not according to requirements and did not make it more famous in market; it also did not focus upon the technology. Products are manufactured on the basis of customer’s needs. Apple Inc. needed the fundamental importance of getting close to market.

Apple Inc. possessed the organizational structure which too had the management problems. The production and shipment problems exist in Apple Inc. as the IBM its supplier experienced the manufacturing problems and delayed the shipment of various products. In a market the speedy delivery of products is critical. Due to the Apple’s key dependency on other companies put it at the competitive disadvantage. Human Resource in Apple Inc. has administrative tasks such as meetings, conferences, special projects and seeks the solution for the fast paced store environment.

Apple Inc. has faced the serious challenges during the last 30 years but recovered from those serious situations with advent of innovation. Apple Inc. faces the threat of competition because of free services in market. A good business achieves the market share by creating better legal services to customers. It can be compared with the bottle water which is better in quality as compared to tape water which is in approach of every person. However there is legal competition ahead in market. No company was successful to attach the market the before the Apple Inc. did so. Better service is directly related with the new and better technology. Roxio was the first company which followed the Apple Inc. to produce the products on the concept iTunes Music Store. Sony and Microsoft are other big players of market to download the services. On the other hand Dell Computers are partnering with MusicMatch. Traditional retailers like Amazon and Wal-Mart have presented their own plans. Apple Inc. is facing the competition from these competitors and profiting the leading position in market. Copy rights issues are also concerned with Apple Inc. Apple Inc. faces the issues of jobs as a part of their system. Sales force for the direct access to corporation is required for the success of business operation plan. IBM has the direct salespeople more than 6000 while Apple Inc. relied only on the 300 manufacturers’ representatives. The reason behind the small number of sales force may be the selling Macintoshes at lower prices as compared to dealers (Brady, 1989).

Economic Conditions & Apple Inc.

Economic conditions of world impact directly on the performance and financial results of Apple Inc. investor must not consider the historical trends for the future performance of Apple Inc. there are several reason behind this which pose the risks on business of Apple Inc. Uncertainty about the current global economic conditions are also posing threats because business could not continue due to tight credits, negative news about finance, decline in asset values. Apple Inc. sets the prices of its products to consolidate the Dollar’s value. Macroeconomic factors along with other factors affect Apple’s business operation plan. The demand can be influenced by the increase in prices of fuel and energy, condition of mortage & real states markets, consumer’s confidence and health & labour costs. These economic factors adversely affect the demand for company’s product. It also affects the operating results and financial conditions of Apple Inc.

Impacts of environmental and technological changes on the business plan of Apple Inc.

Apple Inc. has made efforts to satisfy its stakeholders in various ways. It included all the environmental issues for its corporate governance. It has satisfied the employees, local communities and general public by minimizing the environmental impacts on its entire business operations; integrated the sound environmental, safety management and health practices. The environmental mission statement of Apple Inc. has integrated all above mentioned practices into all business operations to ensure that it offers technologically innovative products. Apple Inc. aims to communicate on the policy which provides the benefits of environmental consciousness, safety maximization, energy efficiency and health protection to its various stakeholders. In the HRM objectives Apple Inc. has adopted the strategies because of the consumer’s preferences as the external environmental force. The HRM of Apple Inc. has established the partnership agreements to keep the trust and fairness. The recruitment policy of the HRM is modified in the ways to adapt the external changes in environment. Therefore the higher number of skilled staff is recruited in the area of web development; web is considered a preferred medium for the technology professionals for applications. A positive work environment has proved that Apple Inc. is outstanding for the visionary products. The organizational competency of Apple Inc. is increased by the HRM. Apple the Inc. is in an exclusive position. It has produced both software and hardware; it cannot be analyzed only the PC manufacturing company. It is also providing the software solutions, server producer and online contents.

Technology Advancement

The changes in technology has affected the barriers of entry and impacted the business operations of Apple Inc. The changes in digital music industry are working now on common format to make them available for the music players. The reason behind the limiting the download contents is to determine the user’s acceptance of Apple’s product. Bundle of solutions are provided by the Apple Inc. with refined and good products. By providing high quality products to end users the technology sector is making changes rapidly. These are the diversified efforts which Apple Inc. keeps its design and innovation more focused with the use of best performance and prices according to the external and internal environmental changes. Due to its distinctive competencies like product design, innovation, educational skills and digital entertainment; company has acted as a leader in the digital lifestyle. Apple Inc. has used its strengths for the purposes of creativity, technological development and innovation. It has gained competitive advantage over other companies in the industry because it offers multiple products with lower values. Organizational structure and control system of Apple Inc. improved the information and knowledge availability. For the Apple Inc; innovation and technology are the key driving forces of its mission and strategy (Morden, 1993). For the effective operation management system IT is a driving factor and management information system is the basic requirement for the strategic development. Efficiency of operation management is improved by the use of IT as it increases the quality and availability of information and leads to cost saving (Ibid, 1993). Apple Inc. is using the SAP and ERPs systems to speed up the customer’s orders. Apple Inc. has implemented the i2 technologies.

Importance of good business operations planning to the overall success of the business at Apple Inc.

Apple Inc. has many successful factors that determine its success in key areas of the operations. An important factor that is apparent is about the vision of the organization. It is true that creative energy always begins with vision. These organizations impact significantly on the world (Collins & Porras, 2004). Apple has a very clear and purposeful vision which can be seen through the innovative products for the last many years (Senge, 2006). The main purpose of the Apple Inc. was to develop the computers for the world and making contribution to the world by its advance technology products. Beside this vision Apple Inc. takes further steps of actions which are practiced throughout the organization. In the Apple Inc. employees were able to lay the foundations to achieve the long term goals. They were able to start the business at small scale and contributed at a higher level. The company acted upon the Kotter’s model and understood the potential uses. The success of the Apple Inc. is attributed to the capability of the company making refinements and building the more powerful products. The company has changed the core nature of the business. The Apple Inc. innovated the (GUI), file folder and desktop metaphor. Kotter’s 7th step manifests by using the credibility to make changes in system, policies and structures (Kotter, 2007). Apple uses the core competencies which the employees have acquired through redefining the market segmentation. Apple has met many successes and overcome the challenges. Apple Inc. has made changes and implemented new policies because of changing trends of computer markets.

Apple Inc. is a computer technology which is best known due to its innovative structure. It is focusing upon the production of personal computers. In the advent of evolving technology it has shifted into the electronic market. Apple Inc. operates its business in more than 170 retail stores in US, Japan, UK and Canada. It has produced more friendly computers for the consumers. All of the achievements at Apple Inc. are attained through the people who design and develop the products and staff at the retail stores. Why is the business operation plan important at Apple Inc? This business operation plan is important because it generates the steady increasing revenues and sending its products in the big markets of the world. Due to its good leadership the Apple Inc. achieved the high profile. Three manufacturing facilities are shaping the foreign operation in countries like Ireland and Singapore. Due to its internal strengths and successful business operation Apple Inc. has become a competitive company. It has footed in the computer market with an innovative style in the computer market. It production system is well handled as the operating system is free of all tangles of the Microsoft operating systems. In the physical appearance, usability and specifications; it has given a large degree of control to company. Apple Inc. encourages the R&D environment and constantly releasing the products as seen in the latest Mac mini and iPod. It has made the Apple Inc. a big innovative company and brings the creative and new ideas in the computer market.

Capital Structure:

Corporate policy has yielded good results. Apple has paid all the debts which suggested that desired operations of company and growth of company by equity and not by the debt.

Managerial qualities and resources necessary for effective business operation planning

The issues in quality of products attracted the attention of business. The management concept is rendered by the wave of successful entrepreneurship. Top managers are committed to make decisions before communicating fully with all those who are involved in it. When subordinates ask for the decision the top managers think about the organizational response towards the decision for strategic plan. Ways of decision making enhance the business operations and credibility throughout the organization Apple Inc. People love to purchase the products of Apple Inc. because of power, easier way to use and reliability. The business managers at Apple Inc. ensure the delivery of the products to companies according to their requirements. Business customer contacts the business managers and long term relationships are established between them (http://www.apple.com/jobs/us/retail.html#business). Apple Inc. management has the ability to sell its products having no supply chain system. It earn the revenue by the selling the iPod devices and Mac computers. Its iTunes virtual stores are generating the revenue more than $ 1 billion every year (David, 2010, p: 72). The managers at Apple Inc. face the incentives of using the strategies to control the earnings in many traded companies. The managers are allowed to purchase the stocks. In this way the staff at Apple Inc. is encouraged (www.sec.gov). The management system of Apple Inc. has policies and procedures, responsibilities and roles of its managers. For example a best health management system is maintained by the concerned managers to ensure the safety and health of its employees. If any inadequacy is seen in this system then top managers adopt the corrective actions including the verification through audit processes. Apple procurement managers are responsible to manage the business relationship with suppliers and coordinate the Apple’s supplier responsibility auditor.

Apple Inc. has five divisions to manage the products and marketing departments of the company. These five divisions are responsible to evaluation and manufacturing of the devices, software and hardware of computer system. The four support divisions also work to handle the marketing and post sale products. A new position of Chief Operation Officer was created by Scully to centralize the operations and involving the senior management in the daily business decisions (Annual Report, 1988). Human Resource (HR) is responsible for the safeguarding the most valuable assets of the Apple Inc. It handles the many programs of the company to achieve the company’s goals. Human resource at Apple Inc. is also responsible to reach at the needed resources. The Apple Inc. has six important valued creation functions including the marketing, R&D, finance, Human resource management, information systems and operations and logistics. The chain of activities required to transform the inputs into outputs are primarily concerned with actual design, manufacturing, delivery, marketing of products and customer support activities. The ultimate task of the R&D resource at Apple Inc. includes the new innovation and use of technology which meet the customer’s requirements (Hill & Jones, 2004). Information system at Apple Inc. is an important asset which provides the business assisting facility. For the success of the business operation plan the information system is a core to keep the business run online without any obstacles. Other valuable resources which have potential powers for the customers as well as the management at Apple Inc. include the servers which distribute the information about Apple’s products and create new internet resources for the mailing list, online feedback and further open the communication lines.

From the above discussion it can be concluded that Apple Inc. is a well known development and business company of the world. Its success lies in its business operation plan which indeed depends upon the various necessary actions taken from the design of the product to sale of the product.