Business Strategy – Factors to Consider
Business Strategy – Factors to Consider
Business strategy is fundamental for any business. It is a plan of action that a business undertakes in order to achieve a desired outcome such as a goal. It gives the general direction a company by integrating the company’s workforce and utilization of available resources to lead to the implementation of the laid down plans. Business strategies also give foresight to the vision and mission of the company and how to find solutions in the event the company is faced with challenges. It is therefore; the guiding set of principles for a business company that gives it direction and is useful for both the companies themselves and to their existing and potential investors and share holders.
Apple Inc. is a multinational American cooperation that deals with manufacturing of electronic consumer products. Established in 1976, it has grown to be a major player in the electronics industry as it is currently ranked 17 on the fortune 500 company lists. Over the last decade the company has established itself as worldwide brand with the unveiling of products such as the revolutionary iPod, iPhone, and iPad. The introduction of the iPod was seen as a game changer as it broke into the mp3 music player industry and managed to be adapted by consumers as the preferential product. This meant that their business strategies had changed as they had a growing demand for their products. This is seen in the year 2007 when the company dropped the name ‘Computer’ to cater for their ongoing development.
Current financial trends aid the owners, employees and investors to know the company’s status and how they may be able to plan for the near future. This is based on the current market conditions and the stock value of the company as they play a key role in determining the likelihood of investment. As it stands, Apple Inc is very well positioned in the tech industry as they have in place competitive strategies that ensure they are still profitable. This is because they give research and development high priority which consequently enables them to come up with innovative products that appeal to the consumers. Currently, there is a dip in the stock value as there are quality products being manufactured by their competitors. In an attempt to remain competitive there needs to be more innovation or revision of the business strategy otherwise there could be reduced profit margins.
In the last fiscal year, there was a peak in their stock value as Apple shares went up to a recon-breaking $705 per share (Apple Inc. 2013). This trend was realized due to the anticipation and expectation of the release of their iPhone 5 product. The success of the company was attributed to meeting the industry’s demand of more innovative products. Another factor is that they had healthy financials as they had good operation efficiencies and liquidity figures (Schoenig, Sundberg ,Pazoki, Torres, Marshall. 2005). The recent trends also indicate that it is a fairly stable company as their profit margins remained stable as they managed to clear their debts. This is usually very difficult to achieve for companies in the tech industry and in doing so it implies that the company strategy changes. Resources that could have been used to repay debt can be pumped into other areas such, as research and development which would ensure their continual growth.
The company’s strategic intent is shown by going beyond the normal strategy and planning for what cannot be seen. This means that the company now has to be proactive and account for things they have not taken into consideration (Mantere, & Sillience, n.d). The way they strategize takes a new form new ways to address growing market demands. Apple through their products has shown that they are innovators as they have released revolutionary products that have been broadly adapted. The slogan “Think different” resonates synonymously to all people across the world. This is a clear declaration of their stand, on producing exemplary products. Their financial objectives of not being in debt and conversion of gross profit into net income are proving to be successful. They are not n debt and they are still having good profitability margins.
Organizational culture is important in understanding the values and working mechanisms of an organization (Alvesson and Sveningsson, 2008). The Apple has established a popular organizational structure that’s based on the principle of self motivation and a top-down philosophy. Decisions are made even at the lowest levels possible by employees on a daily basis. This means that they have competitive advantage over rival companies as there is faster responsiveness of employees in the decision making process. This reduces micromanagement as employees believe in themselves. The management only oversees the decisions made by the workforce.
The strategic element of cost is highlighted by the fact that the company is among the admirable companies that are not in debt. This means that the recurrent expenditure is less and those resources can be used elsewhere, which give the company competitive advantage over other companies. The human resources practices are done in a bid to achieve loyalty from the employees. For Apple to retain their highly qualified personnel there are benefits that entice the employees to work there. Benefits offered to the employee are dependant on position, location and how long one has worked for them. There are many positions within the company therefore career growth path is available. This means that employees would want to remain at the company. As a result these elements steer higher productivity which leads to higher profitability.
Alvesson, M., & Sveningsson, S. (2008). Changing organizational culture: Cultural change work in progress. New York: Routledge.
Apple Inc. (2013). Stock information. Retrieved from http://investor.apple.com/stockquote.cfm
Mantere, S, & Sillience, J. (n.d) The Social Construction of Strategic Intent. Retrieved from http://tuta.aalto.fi/fi/tutkimus/tyopsykologia/julkaisut/tyopaperit/mantere-sillince-strategic-intent.pdf
Schoenig, C, Sundberg M, Pazoki, C, Torres, D, Marshall, H. (2005). Comprehensive Business Analysis. Retrieved From http://mmoore.ba.ttu.edu/ValuationReports/Apple.pdf