Apple Inc. is a company founded by Steve Jobs and currently led by Tim Cook. According to the estimates of Yahoo Finance, the firm is recognized as the business with the biggest market capitalization, exceeding two trillion dollars. The main reasons for its success are its leadership style, corporate culture, and revolutionary approaches. In the face of the revolutionary tech industry, in order for Apple to sustain its growth and competitive edge, it must employ key recommendations such as innovation, affordability, and an environmentally-friendly approach.
Measures of Success
Undoubtedly, Apple Inc. is among the most successful companies in the technological industry. The evidence that can be used to corroborate this statement is the financial reports of the corporation. After carefully analyzing the 10-K reports of Apple Inc., healthy, consistent growth was observed. As can be seen from Table 1, the organization grew its total net sales from $265,595 billion in 2018 to $365,817 billion in four years, with an overall increase of 37.7%. This indicator illuminates how much money the company makes from selling its products, and the consistent growth of this figure indicates demand for Apple goods. Similarly, the net income of Apple Inc. has grown from $59,531 billion in 2018 to $94,680 billion in four years, indicating a 59.04% increase. This metric illustrates how much money Apple earns after deducting expenses and taxes, which implies that the company is profitable.
Table 1. Apple Financial Metrics.
Note. Apple, 2021.
When it comes to non-financial metrics, the number of active users can be used. Apple has its own operating system, such as iOS and macOS, which is different from the well-known Android system. In 2021, it was stated by Google that the number of active Android users who utilize the Google Play Store exceeded three billion people (Warren, 2022). In turn, Apple’s management has revealed that the number of active clients who use the Apple Store is almost two billion people (Warren, 2022). In this sense, Apple’s single operating system has almost reached the figures of the Android system, supported by numerous tech companies, such as Huawei and Xiaomi.
As for competitors of Apple, other technology companies like Samsung, Huawei, Dell, and Xiaomi can be considered, with Samsung taking the lead position. As seen from Table 2, after calculating the company’s growth in percentages, its competitive nature can be clearly seen. For instance, from 2018 to 2021, Samsung’s total net sales grew by 40.3%, which is 2.6% higher than Apple’s results. Likewise, net income during the same timeframe grew by 72.9%, which is 13.86% higher than Apple’s result. However, net sales and net income figures are still lower than those of Apple.
Table 2. Samsung Financial Metrics.
Note. Samsung, 2021.
Still, scholars outlined difficulties in determining and measuring business success. According to Nagle and Müller (2017), Apple is a company that incorporated innovative approaches and measuring its innovations’ value, and financial worth is complicated due to the lack of details in the financial reports. Similarly, it is difficult to measure the success of Apple due to the inability to measure the success of its individual products, such as the iPhone or MacBook, since Apple does not disclose the revenue for specific segments (Nagle & Müller, 2017). As a result, it is quite challenging to measure the true success of Apple Inc.
Reasons for Success: Customer Support
It is clear that Apple Inc’s customer support is essentially unmatched given that the entire business is centered on meeting and adjusting to the needs of the varied consumer base. The relationship between the business and the client defines the importance of co-creation. In order for customers to become “value creation agents, which can lead to a shared value creation trend,” businesses have discovered that collaborating with them is beneficial (Hussein & Hartelina, 2021, p.65). In this sense, Apple consistently engages in value co-creation and can develop the latest innovations in order to stay competitive. Loyal customers assist the business by offering suggestions or critiques of a product to enhance its value or develop novel uses for it as a result of product innovation.
Product Quality
Although the design process is an important part of every good Apple produces, consumers will not buy or use Apple devices if they are complicated to use. This will lead to a decrease in the value of Apple’s product line. However, the firm’s user-interface concepts are based on convenience and simplicity. As has been mentioned by Steve Jobs in his autobiography: “When you open the box of an iPhone or iPad, we want that tactile experience to set the tone for how you perceive the product” (Isaacson, 78). In this sense, Apple emphasized the importance of product quality.
Brand Consciousness
Every latest Apple product includes a technical advancement that was not included in the previous release of the gadget. This is among the reasons why customers queue up outside retail stores when the newest iPhones are launched in order to purchase them. For example, the latest iOS 16 involves new widgets, novel architecture, and a camera view (Apple, n.d.-b). With the help of Steve Jobs and his followers, who have established Apple as a powerful force, each modification to its hardware and software, each novel feature, and color change launch have created excitement in its users.
Product Range
Apple has progressively increased its vast range of goods over the decade. Apple’s product range includes smartphones (iPhone), computers (MacBook), smartwatches, and other items (Apple, 2020). Although the company does not own any technology that is not already available on the market, its customers still anxiously await the introduction of the latest goods. The reason for this is that Apple has a variety of customizable products that come in different sizes and colors and other software and hardware features.
Marketing Approach
Another one of Apple’s characteristics is that it employs successful marketing strategies. The strategies usually involve concentrating on the general customer base and indicating relatability. For example, through commercials, Apple can reach its student customer base (Apple, 2020). Its web content and advertisements might target employed adults who need devices for work.
Innovation
The organization is constantly making innovative adjustments in order to make the use of its devices easier and more convenient. For example, Apple Inc. is making changes to the macOS to enable developers to port iOS and iPadOS applications directly to the computer (Apple, 2022). By doing so, Mac’s program selection will be significantly increased, increasing its ability to compete with PCs. Therefore, the firm constantly strives to maintain its competitive edge.
Strategic Analysis (AVC + VRIN)
Inbound Logistics
The raw materials needed to make Apple’s goods are acquired and organized by inbound logistics, which additionally ensures the product’s quality. A considerable portion of Apple’s production is presently carried out by a limited number of “outsourcing partners,” sometimes in a single location (Apple, 2022, p.8). The outsourcing partners that provide the raw materials and manufacture the devices are located in mainland China, India, Japan, South Korea, Taiwan, and Vietnam (Apple, 2022). Thus, these stakeholders are mostly based in Asia and execute the majority of the firm’s production.
Outbound Logistics
The management of orders, shipping, and distribution of the business’s goods comprise outbound logistics. Customers may buy Apple items directly from the company’s site, Apple stores, or other third-party retailers. As of 2022, the company sold 62% of its products indirectly and 38% of items directly (Apple, 2022). In this sense, the distribution network of Apple Inc. has both direct and indirect channels.
Services
Apple Inc. is renowned for providing great customer support at each stage of the buying process: before, during, and after. In key cities throughout the world, the corporation operates Apple experience centers where anybody may use its devices and then become persuaded of the value. Moreover, customers are able to contact Apple customer support via an application or phone call in order to solve issues or book appointments for repairs (Apple, n.d.-a). In this sense, Apple Inc. provides various approaches to customer support.
Marketing and Sales
Customer relationship management, advertising, sales forecasting, and competitive analysis are all part of marketing and sales operations that aim to draw customers to various items (Apple, 2022). Sales for the firm originate from prestigious industries. Retailers, Apple Online Outlets, and Apple Retail Markets are among them.
Operations
Apple products are produced in a number of nations. The majority of its products, nevertheless, are manufactured in mainland China, which explains the logo of being made in this country. However, Apple Inc. negotiates with other countries as well, such as India, to hedge against the risks and diversify its manufacturing portfolio (Apple, 2022). The reason why mostly eastern and Asian countries are chosen for assembling is due to lower prices of labor and raw materials.
Support Activities
- Infrastructure. Infrastructure covers elements like supervision, bookkeeping, and administrative duties. A well-equipped infrastructure acts as a catalyst for a business’ growth. A firm’s infrastructure often evolves during the course of its existence. The organization sustains its efforts to create an inclusive environment, support equal compensation for all workers, and enhance the representation of varied backgrounds at all levels (Apple, 2022). Thus, Apple’s infrastructure is currently undergoing cultural adjustments.
- Technology Development. Among the defining characteristics of Apple Inc.’s brand recognition is its unique features. Apple invests over 22.5 billion dollars in research and development to attain this attribute (Apple, 2022). The funds are distributed primarily for the expansion of the product line, improved customer service, and technical advancements in the items. In this sense, Apple invests a big portion of its accessible funds in Research and Development.
- Human Resource Management. The firm strives to foster an inclusive, secure, and supportive atmosphere for every individual of its staff because it feels it has a skilled, ambitious, and devoted staff. Apple Inc. employed over 164,000 full-time equivalent workers as of 2022 (Apple, 2022). In order to retain its employees, the company offers competitive benefits and compensation.
- Procurement. The buying of equipment, tools and raw materials utilized in the design and manufacture of products constitutes procurement operations. Apple Inc. represents an ecosystem of partners (Apple, n.d.-c). The organization offers various supply and sourcing programs on its terms.
VRIN
Leadership Contribution
The current leadership is guiding the company toward success via the leadership legacy from a predecessor who established the organizational culture. The founder of Apple Inc., Steve Jobs, was known as a poor manager and a difficult person (Isaacson, 2011, p.219). Jobs held his workers to a high standard of performance, was not easily accessible, and made choices on his own without considering the recommendations of advisors. In this regard, Jobs prioritized the output of the firm over that of the workers. In his autobiography, it was mentioned that “Jobs was able to indulge all of his instincts, both good and bad” (Isaacson, 2011, p.219).
Still, Steve Jobs was and will be recognized as a brilliant entrepreneur who set the vision for the company. The organizational culture of Apple is based on innovation (Podolny & Hansen, 2020). As a result, the overall approach of the firm is to nurture the creativity of employees and lead them toward revolutionizing the tech sector.
When it comes to the current CEO of Apple Inc., Tim Cook, with the help of Blake and Mouton’s Leadership Grid, it can be claimed that within the model, he fits into both country club management and team management. The current CEO can employ a team-leader management style that prioritizes both the needs of the team members and the end product. Cook may do this by assigning difficult tasks to workers, which will result in stimulation, engagement, and expansion. The reason why he is successful at leading and engaging workers is that, as he stated, “I get to work with people that I truly love” (TIME, 2022, 0:10). Cook is additionally a leader who can be accountable for his own performance.
In this sense, Cook is a leader who equally prioritizes workers and products and perceives both of them as vital elements for the organization’s growth. In his interview with Time, Tim Cook also said that he is “inspired by the people [he] works with” (TIME, 2022, 0:03). Additionally, Cook can be regarded as a democratic leader who enables the participation of the management and staff in the decision-making process. As he mentioned further in the interview, “companies are nothing more but a collection of people” (TIME, 2022, 0:21). Consequently, the CEO’s leadership style can be defined as a team- and country-club management. This implies that Tim Cook successfully combines the two styles, indicating that he appreciates his people more than the organization’s products, which are still neither removed nor given less attention than the staff.
Strategy Focus
Regarding a particular strategic factor of Apple Inc., the one strategy that deserves closer scrutiny is the one pertaining to innovation. Company business strategy and competitive edge are both shaped by its innovative approach. The firm’s business model consists of employing radical technology to establish an entirely new marketplace and eliminate competitors from it. Its competitive edge depends on reinventing items to make new products and experiences from its previous versions. Apple uses a framework that is centered on functional knowledge to produce such advancements (Zott & Amit, 2020). Its basic tenet is that decision-making authority should always rest with individuals with the greatest knowledge and experience in a certain field.
Drawing from two points of view, firstly, Apple depends on the vision and intuition of individuals with an in-depth understanding of the innovations causing revolution since it engages in marketplaces where technological advancement and innovations occur at exponential speed. The corporation must make predictions as to which technology and concepts are likely to perform well in smartphones, tablets, and other products before it can obtain market input and reliable market projections (Zott & Amit, 2020). The likelihood that those risks will succeed improves when management teams are succeeded by technical specialists.
Secondly, if short-term cost and revenue objectives were the primary standards for evaluating investments and leadership, Apple’s dedication to providing genuine quality would be called into question. Importantly, leading research and innovation professionals’ compensation is determined by company-wide success metrics instead of the expenses or sales of specific items (Zott & Amit, 2020). As a result, judgments on products are partially protected from pressing financial issues. Both the development teams’ discussions on the item strategic plan and the financial team’s discussions about price are not attended by the design engineers. Lastly, it must be mentioned that managers’ organizational status gradually disappears in the absence of a steady stream of advances (Rikap, 2018). Because of this, even if enormous resources are necessary, managers must support those research and innovation initiatives deemed essential, even if they will undoubtedly want to outsource more of the necessary sources.
Strategic Recommendation
Finally, when it comes to strategic recommendations, they are based on gradual innovation, affordability, and environmentally-friendly approaches. Firstly, regarding innovation, the cornerstone of long-term success is striking a balance between investing in progressive breakthroughs that build on current goods and participating in revolutionary discoveries, which occasionally disturb the market and competitors. A company must continue to change and adjust during this process, which may require selling ventures that were formerly profitable or even connected to the company’s founding. The given recommendation is acceptable for key stakeholders, which involves investors, customers, and management since it enables lower prices along with stock and revenue growth. This is feasible considering the corporate culture of Apple and its emphasis on innovation. Without being burdened with debts or unprofitable facilities, while still bringing innovations will help apple sustain growth.
The next strategic recommendation is to maintain affordable prices for customers. The reason why Apple’s products are valued is due to quality, relatability, and affordability. Apple goods are not a luxury segment, which makes it appealing. This is feasible considering that the main manufacturing bases are located in Asian countries, which intrinsically have lower price rates. This is acceptable to the key stakeholders since affordability is beneficial for customers and investors since it will lead to bigger sales. By keeping prices on products at a relatively similar level without rapid increase, the company will be able to sustain its competitive edge.
Lastly, in the era of global warming and environmental awareness, Apple Inc. might strive to become more environmentally friendly. In this sense, the company might employ biodegradable packaging or collect old devices in exchange for discounts and then recycle the products. This decision will be acceptable to the stakeholders since Apple stock will be valued more, along with gaining a bigger devoted client base. This is feasible since biodegradable sources are cheaper than newly produced materials. In the end, such an approach will be able to sustain a competitive edge due to being more environmentally conscious than competitors.
Conclusion
Hence, Apple is the company with the biggest market capitalization. Its financial metrics of success indicate consistent growth of net sales and revenue. Its non-financial metrics indicate that it has almost two billion active users as opposed to three billion active Android users. The reasons for its success is the product quality and range, marketing, innovation, brand awareness, and customer support. The VRIN and AVC analysis indicated that its competitive edge includes marketing and sales and technology and development. Additionally, leadership involves the country club and team management of Tim Cook. With the strategy focusing on innovation, the recommendations involve product affordability, environmental awareness, and product development.
References
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Isaacson, W. (2011). Steve Jobs. Simon & Schuster.
Nagle, T. T., & Müller, G. (2017). The strategy and tactics of pricing: A guide to growing more profitably. Routledge.
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Yahoo Finance. (2022). AAPL. Web.
Zott, C. & Amit, R. (2020). Business model innovation strategy: Transformational concepts and tools for entrepreneurial leaders. Wiley.