Strategic management is the systematic approach of planning and implementing both short-term and long-term decisions to attain business goals and objectives. The process is continuous and influences both organizational performance and business processes. As a result, it requires financial planning, human resource management and a focus on a mission statement. It ensures that a company needs to gain a competitive edge to attract investors and customers as well as maintain talented staff. With the above in mind, a business, therefore, needs to adapt to new technologies, trends, and knowledge of the economy to develop and sustain both short-term and long-term strategies.
Apple Inc. is an American Multinational listed in the New York Exchange. It specializes in the design of computer components such as software and hardware. Examples of hardware include iPhone, Macintosh, Ipad, and iPod, while software includes operating systems for entertainment and educational software. In the year ending 2010, Apple had over three thousand retail stores in ten countries and online stores serving global customers. The company’s success depends on the application of different strategic concepts that foster a competitive advantage in the market.
Impact of Globalization, and Technology on Apple
Globalization is the shrinking of geographical space led by technology. It accelerates the flow of goods, services, people and cultures globally. For example, globalization and technology connect people leading to the integration of cultures and ideas. Among positive consequences, globalization widens business scope ability to source information, and other resources. It is an opportunity to enhance the ability through increased sharing of ideas, joint ventures to address common problems. It increases the scope of competitiveness, in both resource and market share.
Apple segments customers into different categories, which include small and medium-size business, education sector, large corporations, government departments, and related markets. As a result, the company utilizes direct and indirect distribution channels. With the use of technology, the firm uses online sales services, retail stores, and third-party sellers and distributors. Apple establishes an interactive online site for distributing and selling products and services, and as a result, the company leverages the product’s sales to counter competitors.
Apple faces competition from three companies, which are Fujitsu Technology Solutions, Media Net Digital and International Business Machine Corporation (Apple Inc. 2013). The market offers high competition since it involves in developing technologically based products, which evolves at a high speed. Most of the companies in the industry follow a cost leadership strategy to maintain market share. On the other hand, Apple focuses on expanding its market share to smartphones and other media and communication devices. The increase in demand for such devices results in increased competition.
Globalization also results in outsourcing of manufacturing and other services in areas with cheap labor and expertise. As a result, Apple integrates production and design facilities in the different part of the world such as Asia. The strategy allows the company to develop and market products globally. However, the company’s strategy for outsourcing results in criticism of ethical responsibility. For example, the company faces several accusations on the exploitation of cheap labor in Asian countries.
Industrial Organization Model and Resource-Based Model
Industrial-Organizational model approach aims at maintaining a highly segmented market. In such an economic model, there are few firms and limited competitors in areas such as advertisements, production, and lobbying. The advantage is that it reduces the pool of competitors in a market segment and creates barriers to entry. Additionally, the firms can establish a resource-based strategy to develop the capacity as the key to high business performance. As a result, the resource enables the firms to increase and sustains competitive advantage.
The Industrial Organization Model focuses on the interrelation of major industries with few competitors, which is different from a perfect business. In the case of Apple, the technology-based business has few dominating companies due to the high cost of capital and operation. As a result, the firm’s action has a significant effect on the entire business. Therefore, if Apple segments the market to reduce competition, it will gain control since it has established capabilities. As a result, the firm will have control of prices and market information hence restricting new entrants
The resource-based theory focuses on the company’s assets. Apple has developed both tangible and intangible assets over the years. The company uses tangible asset both for the day-to-day running of the business and long-term investment. In relation to Resource-based theory, the company has little advantage over other companies while using tangible assets as a competitive factor. The reason is that other firm can acquire such equipment or a superior one and offer competition. As a result, the firm can utilize intangible assets such as brand reputation, intel