Internal Analysis Tangible resources Apple’s tangible resources are extensive and widely documented despite the company’s high level of security in matters of design. The value of analyzing the tangible assets of the organization lies in the determination of the potential for the creation of competitive advantage (Grant 2007). In terms of financial resources, the case quotes Apple’s market capitalization is approximately US $550 billion, with sales annually over $100 billion.
This makes Apple the most valuable publicly traded company in the world. The share price currently stands at around $600, merely 12 ears after Steve Jobs’ return to the company, where the share price was $5. Apple’s physical resources include 362 retail stores world wide, which promote sales and effective advertising. Third party manufacturing relationships are also a key aspect of Apple’s success allowing for relatively inexpensive manufacturing while all design aspects stay in-house (Mass 2009).
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The systems in development, design and software systems are all key aspects of Apple’s organizational and technological resources, and are closely linked to the organization’s intangible resources due to their close relation with knowledge and managerial capabilities. Intangible resources Apple’s overwhelming and unprecedented success in the technology industry undoubtedly stems from its intangible resources. The influence that co-founder and CEO Steve Jobs had on the company is undeniably accountable for its achievements.
As an entrepreneur and human resource to Apple, Jobs’ managerial capabilities and innovative ideas were invaluable. The retail stores of Apple also provide intangible resources in the interaction with customers, aesthetically appealing design of the tortes and technological support provided on site in the ‘genius bar’ Arbor 2011). The reputation of Apple and the unique creation of customers ‘needing the newest design in the latest release of products is an intangible resource vital to the organization’s success; they have captured exactly what the consumer wants.
Apple develops and integrates its own hardware and software, and along with the creation of the App store, has created a self-sufficient technological process from start to finish. Consequently, the brand name Apple evokes a whole new facet of technology in today’s society. Capabilities The capabilities of Apple lie in the integration of tasks that combine all aspects of their company, from research and development to product development to marketing and advertising.
The entrepreneurial skills and capabilities of Steve Jobs and the the company. Retail Apple stores act not only as a mechanism for sales, but also as a product themselves, as they are invaluable marketing for the brand. The Internet based sales also offers customers to create combinations of their own products, which could be built and shipped with efficiency and quality guarantee. Apple rates products that are simple in design, yet so focused on the specifics that customer’s inherently deem them as ‘cool’.
Apple also maintains an air of suspense and mystery upon the unveiling of their products, which captures the consumer’s curiosity on a huge scale, an unusual tactic in a society concerned with collaboration and transparency. The use of a platform strategy to create a family of products that will all stream from each other and make use of design elements for derivative products, I. E. the phone, pod touch and pad. The creation of products that, despite ever changing and evolving in technological progress, maintain a clear look and use for consumers is a capability for Apple.
Capability Rare Valuable Costly to imitate Non-substitutable Competitive Consequence Design team Yes Yes Yes Yes Competitive Advantage Retail stores Yes Yes Yes Anthropometry CA Internet sales Noses Yes Noncompetitive Parity Design of ‘cool’ products Yes Yes Anthropometry CA Unveiling of products Yes Yes Yes Anthropometry CA Platform strategy Yes Yes Yes Yes Competitive Advantage Clear Apple look and use Yes Yes Yes Yes Competitive Advantage Core Competencies
Apple defies the norm in regard to core competencies, that is; the capabilities that serve the company with competitive advantage over rival firms, as it has three that are clearly distinguishable. While most companies can hope to have one or maybe two core competencies, the success that Apple has seen in the past few decades in the global commercial electronics industry has been unprecedented. This has been largely due to the innovation and entrepreneurial quality that has stemmed from the design team and Jobs’ influence in creating products that consumers desire on an ongoing basis.
The use of a platform strategy has seen the success of a multitude of products which have offered countless benefits to both Apple itself, and their customers, who can use the same software, hardware, accessories and production between products. Finally, the simple, elegant look and usability of Apple products across the brand has proven to be the core capability that no other company can par. Value Chain Analysis Primary Activities Inbound Logistics superior products, while maintaining a level of quality control.
The unique hardware system has also allowed for Apple to be produced entirely from scratch with a unique pirating system. Operations Apple capitalists on economies of scale in their production techniques by utilizing cheaper and more efficient partners to carry out production at a high quality. This leaves the company to focus on the design processing and engineering of innovative development for both current and future products. Outbound Logistics Apple stores have transformed from merchandising buildings designed to attract “foot traffic” and curious non-Apple customers, to retail destinations.
In conjunction with the stores (which are products in themselves), Apple products are also sold wrought select authorized retailers, which provide a point of contact between staff and consumers as well as an outlet for advertisement for the Apple brand. Customized Internet orders are also directly shipped from storage facilities in China arbor 2009). Marketing and Sales Retail stores are life size advertisements, as the sleek interior design and advanced technological displays of Apple products are a credit to the company as the ultimate marketing display.
The secretive product unveiling create hype and curiosity about new Apple products, effective in capturing consumer interest. The real secret to Apple’s marketing, however, lies in its ability to create functional, instinctive products that the consumer finds natural to use. Apple’s marketing campaign highlights this not by specifying the complex features of the product, but rather showing the way that consumers will use them in day to day life and look good doing it (Hollies 2011).
Service The “genius bar” feature of the retail Apple store provides a direct consultation service that allows customers to consult an expert technician on problems they may have encountered with their product. The platform strategy that Apple uses also meaner that consumers are already aware of how a product works from previous products of the same family, requiring less training and also less maintenance and repair due to a better developed product.
Supporting Activities Firm Infrastructure The structure of the company once Jobs returned to Apple saw the rapid onset of success, due to the focus on innovation rather than process. The lack of specific processes disclosed to the public also raises questions as to the efficiency of creates opportunities for growth, extensive research and development and product expansion. Human Resource Management The employee benefits of working at Apple are numerous, from the testing of products to receiving gifts of the newest designs to superior working environments.
Consequently, for such an innovative and rapidly paced industry, the hiring process is selective in order to attract the best entrepreneurial talent. Technological Development The level of secrecy within Apple is extremely high, even between departments within the organization. This is vital to keep the company relevant and competitive. The level of research and development at Apple is extensive, with many employees particularly senior level management) taking a hands on approach in order to utilize “knowledge work” to achieve the most “beautiful, elegant solution”.
Procurement The relationship between Apple and its suppliers is of utmost importance to the company in order to meet the needs of a competitive, fast-paced business environment. This is supported by Apple’s Supplier Diversity Program, established to uphold social and environmental responsibilities by utilizing a range of suppliers with diverse cultural components (Apple and Procurement 2012). Strengths and Weaknesses table Strengths Weaknesses
Large market capitalization Lack of concrete processes Annual sales making Apple the largest publicly traded company worldwide Level of secrecy between departments could lead to overlap of ideas/double-up 362 retail stores worldwide providing advertisement for the company Continuing to release relevant and improved products is rapidly paced industry Strong relationships with third party manufacturers and suppliers Design team with extensive entrepreneurial and innovative skills Retail stores offering a point of contact for consumers as well as customer support for product difficulties