1. There are companies that stand aside of the common perception of the successful IT company. They build their business, create products and services, accumulate the most innovative and advanced approaches to team building/working process. One can call these companies the pioneers in the technological and ideological areas. Apple Inc. is one of such very successful and creative companies that received recognition, love and financial approval from customers during the past decade or so. Such grand success can be explained by two factors: Creative approach and charisma of CEO Steve Jobs and innovative products. iPod was one of his first super popular solutions that gained the company worldwide fame and recognition (Kahney 2006). What might have happened to Apple if its top executives had not supported investments in iPods?
iPod is one of the most widely spread portable media players on the planet. It was launched in 2001 and got number of ancestors as a logical development of the initial idea. iPod was a potable media player with an outstanding design and high level of usability (Kahney 2006). Now it became a more sophisticated, technically advanced device with touch screen. The above-mentioned key features played a critical role in the success of the iPod: nice, smooth, “clear” design combined with easy and comfortable usability options. At this moment, iPod has such modifications: Classic (six generations), Mini (two generations), Nano (six generations), Shuffle (four generations), Touch (four generations). As for the year of 2009, 220 million devices were sold. Automobile industry recognized iPod de facto, as a portable media player that should be used in vehicles and added iPod support to the basic musical equipment (Apple Inc. 2010).
The answer to the previously asked question is simple: Apple would not be the same as know it today. iPods became the first product that the company was able to sell on the worldwide scale. They tested the interface, technological achievements and design, thinking about the future. The iPhone became this future. Popular mobile media players, easy to use and with phone functions – iPhones were destined to be successful (Apple Inc. 2010). Mr. Jobs tried to persuade the board of directors, top managers and the whole world that the production of Apple is different and, thus, unique. He succeeded, so the decision to support the development of iPod was crucial for the company at this stage of development.
Apple is considered as the “king of design” in the tech companies. Design of the products and software is the main advantage of the company. However, there are companies that can argue the right to be called the best. Porsche Design is one of such. Porsche is a world-wide famous brand of luxury sports cars. They are very fast, very beautiful, and very expensive (can be compared to Apple’s products in some meaning). The design of the cars has rather long history and tradition is one of the guiding lights of the Porsche designers. However, Porsche Design produces number of products not related to the automobile business. According to Porsche Design (2013), “Porsche Design is one of the leading luxury brands in the high-end men’s accessories segment.”
The company designs variety of things for men: accessories, sunglasses, fragrances, home accessories, mobile phones, and the number of others. The major competitive advantage of these products is the quality. Design of the products is aimed to emphasize the capability of the person who has these products to purchase not only the accessories under the Porsche brand but Porsche cars as well. This is the major idea of Porsche Design. Therefore, both companies are aimed to provide high-end products of the best quality. The weakness of the Porsche Design brand in the perception of the word “Porsche” as a car. No one will think about eyeglasses first than about the 911 Porsche.
2. The strength of Apple’s brands is in the “direct” recognisability of the products and variety of products for most people. Porsche Design makes things for rich people and only men. Therefore, the audience is rather limited comparing to Apple’s fans. However, the major strength of Porsche Design is in the brand name – it the synonym of quality, speed, luxury, so those who have something from Porsche should feel very special.
According to the speed of the growth of Apple’s stock price, more and more customers became true fans of the company. However, the company’s IT efficiency still needs to be improved (Poniatowski & Wichser 2006). The situation with the reordering of new products, such as iPads or the latest iPhones 4G was not so good. Many people wanted to have these new gadgets the moment they appear on the store shelves and on on-line stores’ front pages. It did not happen. The strategy should be based on the increased facilities to be able to satisfy the demand; improved coordination between the retail channels to avoid huge lines in front of the land based stores and angry feedbacks for the online stores; increased speed of informing about the lack of produced devices to avoid dissatisfaction from the customers, etc. All these measures should be taken within one strategy in order to improve the IT efficiency of Apple’ internal and external business processes (Poniatowski & Wichser 2006).
Meanwhile, the effectiveness IT metrics should be applied to the overall Apple strategy. The main efforts should be applied to such directions: Customer satisfaction – it should be measured by surveys among the new and retained customers in order to see, where the problems with products and services are; conversion rates should be evaluated by such indicators as customer replies to advertisement letters, or how many customers are really interested in something, by clicking on an ad, for example; a financial evaluation should point out the moment when revenues exceed operating cost in order to see, what the reasons were; missed opportunities should be evaluated from the angle of customer interactions that didn’t happen; drop-outs – it is very important to know the percentage of customers, who use a new feature from the very beginning of the product’s life cycle; the ultimate test is for the evaluation of the true value of any product because bad products most likely will not be recommended to a friend or co-workers, right? The deep and thoughtful implementation of the metrics and evaluation of the results can improve the quality of the products and strengthen Apple’s position of the market (Evans 2005).
The popularity of iPods was supported by the musical features, at the first place. In 2001, Apple launched iTunes, the proprietary digital media player application to give users an opportunity to play and organize digital music and video files. Since the popularity of iPod and other products, like iPhones or iPad, grew and is still growing very quickly, the database of iTunes users grows, as well. Apple, as the company that realizes the value of any available data about the customers, could sell this information to other companies under some sort of deals about the partnership cover.
The whole success of the company is based on the loyalty of its customers. Apple creates outstanding products, but they are not ideal. The recent claims about the iPhone’s 4 antenna related issues, dissatisfies feedbacks from the customers (by the iPad’s and iPhone’s problems with timely supplies) and other problems could have destroyed any other company, but not Apple. People simply forgive all these problems and flaws because they love Apple and its products. Furthermore, the customers trust the company. That is why they entrust information to the iTunes service as the main source of the music, videos and other media on the Apple’s devices (Apple Inc. 2010).
In case if security measures are not sufficient to secure this information, this trust, basically, the aftereffects for Apple’s business can be crucial. People will not forgive various issues with Apple’s devices, services, guarantee support that can be rather significant in particular cases. Thus, the company can become just a usual company, without charisma and fantastic style for their fans. Apple has always been different, without it Steve Jobs will not be able to sell his vision to the customers so successfully.
3. Apple Inc. is one of the leading companies in the high-tech industry. This is the company of the worldwide scale that creates, develops, and produces very competitive and desired products. The company started its activities in 1970th, had its ups and downs, but it has always created the products that were substantially different from the similar products, presented on the market. It was the reason of the tremendous successes and drastic failures. However, Apple had never stopped developing new approaches and views on the usual things. First computers, (Apple Macintosh, Apple II series, etc.), music players, and other portable consumer electronics were in the circle of interest for Apple. The innovative approach was the reason of their failures in most of the cases because the production, despite its advanced technical characteristics, was often too expensive and different from other similar solutions on the market (Apple Corporation 2010).
After the invention of iPod, and later iPhone, Apple Inc. gained the worldwide popularity and became one of the most successful players on this market. Apple’s notebooks are substantially expensive than the products with the same of sometimes even better technical specifications, however, people purchase these notebooks with pleasure. What is the catch? The catch is in the ability of Apple Inc. to satisfy the needs of customers with style and unique design.
In order to answer this question it is necessary to perform the external environmental scan and the internal, competitive environmental scan for Apple Inc. Therefore, one needs to evaluate such three subcategories of the external environment as factors in the remote environment, factors in the industry environment, and factors in the operating environment (Pearce & Robinson 2010). As for the internal environment scan, one needs to assess the strengths and weaknesses of the company and evaluate its resources (Barney 2007). It is also necessary to assess Apple’s competitive position and possibilities in order to see, what advantageous directions the company can developed in order to keep sustainable position on the market and continue its growth.
The factors in the remote environment are economic, social, political, technological, and ecological factors. All these factors are able to influence the activities and success of Apple Inc. The economic factor influences the purchasing power of the people, where the production of Apple is presented (Pearce & Robinson 2010). Because most of the sales are concentrated in the U.S., one of the most powerful economies in the world, this is not the most influential factor in the external environment. The political factor is not the most influential either, since the political situation outside the country does not influence too much the perception of Apple, as the manufacturer of the fanciest gadgets in the world.
The technological factor is not that influential as it might look like, as well. Apple develops and produces if not the most advanced devices as for today, but the company is very close to it. Therefore, the changes in the technological processes and the latest achievements in this area are always tracked and implemented, if it is appropriate and necessary (Pearce & Robinson, 2010; Apple Corporation 2010).
The ecological factor is not one of the most significant factors too. Apple Inc. is a company of the worldwide scale; it is a public company, so any possible problems in this area will be noticed and brought to public immediately. Therefore, the company had already prevented all potential problems in this area. Besides, the environmental friendly status for any company of such size is good for its image, so why would Apple not to think about these issues in advance? Thus, one can conclude that the social factor is the most influential one in the remote environment in this particular case. The success of Apple is based on the positive perception of its products by millions of people. The brand name plays the crucial part in the sales of each next product (as it was with iPhone 4).
4. In the industry environment, there are five main forces to emphasize as the most influential ones. They are new entrants, suppliers, substitutes, buyers, and industry competitors. New entrants are no competitors to Apple due to the obvious reason – the army of Apple fans is still growing. Suppliers are the same for all the participants on the market, so this is not the most crucial influential factor. Adequate substitutes are still not present on the market, and each new product is compared with Apple’s products. In addition, there are no industry competitors who would be able to gain the same popularity as Apple, in the nearest future at least. Buyers are the most influential power in the industry environment for Apple. They are able to change the cost of the shares on the stock market by finding problems with some products and making this information public (Barney 2007).
Pearce and Robinson (2010) state that the most important factors in the operating environment are “the firm’s competitive position, the composition of its customers, its reputation among suppliers and creditors, and its ability to attract capable employees.” In this case, Apple has a strong competitive position, this is one of leaders on the market; it has a positive reputation among suppliers and creditors, according to the success on the market, rather competitive prices, and substantial growth of share price for the past periods. Of course, Apple is one of the most desirable companies to work for because this is the leader of the industry and it is always beneficial to be ahead of the progress, lead it. Again, the customers influence Apple’s success on the market; define the next steps in the development of the product lines, etc. Apple has products for every category of buyers, so nearly everyone can purchase iPod, iPhone, iPad and become Apple’s fan. This is the determining factor of the operational environment Apple Inc. today.
In the light of the above-mentioned external factors, it is important to assess the most important strengths and weaknesses of Apple Inc. The obvious strengths of the company are the creative potential and innovative approach to the products development. Apple’s products have always been different from the vast majority of the similar products on the market. The brand name “Apple” is the most solid strength of the company (Barney 2007). The weaknesses derive from the strengths. The innovations of Apple’s founder and co-owner, CEO Steve Jobs are not always understood by the public, and such strong centralization of the company (Jobs is the main conceptual designer and ideologist of the company) can be potentially threatening to the company’s success. All power in the hands of one person is the main weakness of Apple. Therefore, the struggle of the company creates innovative solutions that are different from anything else on the market and the peremptory love of the Apple’s army of fans gives Apple numerous opportunities to follow this way.