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Subject:
Strategic Management and Decision Making

Case study of
Apple inc in 2010

Submitted by:

CHEMA C. PACIONES

Submitted to:
Dr. Ronaldo A. Poblete, CMITAP, CFMP, CATA, CAEA
Professor

JULY, 2020
Background of the Case

The company started off as “Apple Computer” by Steve Jobs and Steve Wozniak, a pair

of 20-something college dropouts in 1976. Jobs then went to work and transformed

“Apple Computer” into “Apple Inc.” with innovative and technologically sophisticated

non-PC products in 2000’s. By 2010, the company also viewed itself as a “mobile

device company.” Apple became the fourth- largest PC vendor in the US market with an 8%

share by the end of 2009. Its market capitalization went to $220 billion in spring of 2010 through

multi-million dollar marketing campaigns such as the successful “Think Different” ads and catch

slogan. Apple promoted itself as a hip alternative to other computer brands. It also highlighted

its computers as the world “greenest line-up of notebooks”. The goal of Apple is to differentiate

its products amid intense competition in the PC and mobile device industry.

Apple’s strategic management

The success of Apple Inc. has been based on its ability to integrate into its model of business
operation a management that is strategic. Through strategic management diligent involvement,
Apple Inc. has been able to ensure that it is not maneuvered; a strategy that has enabled the
company for the past 3 decades to emerge as successful in the competition. However, believing
that Apple Inc. has not gone through some setbacks would be illogical. In fact, this is one of the
companies that have their good testimony of how the tread of emerging as successful in an
already established market can be challenging. However, Apple Inc. has been able to maintain
a steady pace as it makes effort to continue with the market analysis, which has been enhanced
through having a strategic plan that has been implemented properly, and through capitalizing on
strengths that have been highlighted, the analysis has indentified. In the philosophy simple
terms, the strategic management is perceived to be basically important to every leading
business in any sector of the economy. A model example happens to be presented by Apple
Inc. on how the strategic management incorporation can assist in making a firm to successfully
be able to meet its expectations and objectives (Yoffie and Slind, 2008).
Through the strategic management development, Apple Inc. has benefited in many ways
despite the challenges that have been witnessed in the process. Emerging as an industrial giant
in the modern business is not an easily achievable goal, but will require a strategy in place that
clears the path to success. Internal growth has in one way or the other enhanced the
competitive growth of Apple Inc. and through maintaining an aggressive business tread, its
importance has been realized in the lucrative success that has been enjoyed by Apple Inc
(HBSWK, 2004).
In technology, Apple Inc. has advanced from the initial computer industry to involvement

of the peripherals which has been based on its products and services that have been on a wide

scope. The Apple’s mission highlights a company that is with no doubt in the process of
revolving the technology industry. The short term goals of Apple have not been well defined,

which presents one of the major shortcomings Of Apple Inc’s strategies. Due to its major goal

which has in the past been aimed at ensuring that the customers are provided with the best

personal computers globally, finding other specific objectives has proved difficult to Apple. Of

late, it has been realized that due to the modern emerging competition, Apple Inc. has continued

losing its customers to the alternative companies that are offering their products at a lower

market price, especially in the iPod music; this has strongly been attributed to the increasing

hackers of the code and the piracy. Other challenges facing has been failure to draw a specific

target to a customer group that is focused and failing to take advantage of the customers that

already exist. Product integration failure coupled with the technologies that are available readily

has been another challenge that has continued to establish itself into this company, which has

been critical its success. These problems have however not been very critical to the business.

The inability of Apple Inc. to be comparable to other companies has been based on the fact that

Apple has not been specializing in one product scope , thus providing a more complicated

scope of products. This can be an advantage as well as well as a disadvantage. Looking at

Apple Inc. initial mission, the specification has been based on the computer development. With

a new product development (consider the iPhone), a new mission was redefined, leaving

uncertainty in evaluation of Apples initial goal (Freedman, 1998).

PROBLEM STATEMENT

What should Apple Inc. do, amidst growing competition and challenges, to thrive and maintain

its status as a successful full-fledged digital convergence company?

Areas of consideration

STRENGHT
  Pioneer of innovative and high-tech quality products like iPod, iPhone, iPad and

Mac

 Globally recognized brand name

 Large segment of loyal customer of “Apple culture”

 Strong research and development Department

 Retail stores providing the eye-catching products and experience of Apple’s

Software

 Innovative culture

 High quality and user experience

 Revolutionary products

 Appealing designs

WEAKNESSES

 Lower market share

 Products are expensive compared to Microsoft and other competitors

 Reliance on suppliers for MP, App, and Memory

 iTunes: Low margin

 iPhone: Lacking features

 Less market presence overseas

 Content provider relations

 Technological Limitations
OPPORTUNITIES

 Good relationship through joint venture with other big Companies coupled to

bring out new hits

 Constant growth of PC and mobile industry

 More international expansion

 Increasing demand of online music and other applications like cloud based

services

 Growing market of “Green” and energy efficient products

 Capitalize on iPhone, iPhone, and iPad growth

 iTunes and app store

 Strong growth of mobile advertising market

THREATS

 Competition in technology with other PC industry giants like Dell, HP, Lenovo

and mobile industry giants like Nokia, Motorola and Samsung

 Expensive products as compared to other competitors such as Dell, Nokia,

Microsoft

 High product substitution effect in the innovative and competitive technology

market

 Incompatibility with windows platform

 Imitators

 Rapid technology changes

 New Entrants like Google

 Dying Mp3 market

  Piracy and free content availability

 Highly competitive and saturated market

 The rise of Android OS

Alternative courses of action

The Apple Inc.’s identified markets are: PC market (Macintosh), phone market (iPhone)

and other digital device markets (iPod Touch and iPad).

1. The first alternative course of action is international expansion like looking

into the China and other developing countries.

Pros: China has 616 million mobile subscribers, there are a lot of opportunities and

possibilities that Apple Inc. can do with that population of mobile subscribers.

Cons: International expansion would mean high expenses and costs.

2. One of Apple Inc.’s competitive advantages is its Research and

Development rapid innovation. The second alternative course of action is

based on this competitive advantage. It is to increase its budget allocation

on its R&D.

Pros: With the rapid changes in technology in this contemporary society, it is logical for

Apple Inc. to increase its budget allocation on its R&D. Furthermore, one of the core
strengths of the company is rapid innovation, an increase of budget on its R&D would

ensure that this core strength would still remain as one.

Cons: The Apple Inc. may decrease its budget on one or some of its value chain link

like sales, marketing, and advertising in order to give in to the increase of the budget

allocation on its R&D.

 Capitalize on iPhone, iPad, and iPod growth

Pros: The brand is already strong. It is trusted and widely known

Cons: Expensive development

 Employ on Market expansion and penetration

Pro: Retail store strategy is effective and iTunes worldwide content is already popular

Con: Competition

3. Apple should continue investing more in research and development to

design more innovative products that would satisfy its loyal consumers.

This would sustain the organization’s goals although it would have an

impact on its budget as more finances would be required. It is

recommended that the company adopts the alternative strategies

discussed.

4. To achieve this, Apple Inc has to increase its financing, carry out market

research to determine consumer satisfaction and how the company is

fairing in the market. Apple also needs to undertake an evaluation of the

actual and standard progress of its innovative products as a way of

checking market and product performance.

Action plan

Conclusion

Apple Inc. is a leader in global product innovation. Over the years, the company has

introduced one of a kind technological advancement. However, due to the rapid

changes in technology, some of Apple’s contemporaries are becoming at par with them.

Thus, it is only logical for Apple Inc. to increase its budget allocation on its Research
and Development. Further innovation and improvement of their products will not only

maintain their competitive advantage but it will also boost their market penetration.