Business and Organisation
Apple store is a chain of retail stores supplying computers and electronics under the apple computer, Inc. it has connection worldwide approximately 13 countries with 417 stores.
Firstly, the external factors, which shall be analysed using the PESTEL model, are long-term problems that entail variables that keep on changing with time. According to the contingency approach, the organization should be flexible to cope up with any change or situation. The variable affect the organizational structure; the apple store should conform to the changes and consider how the organizational structure is affected. The main variables affecting the organization are size, strategy, technology and environment.
As a matter of concern, globalization has been a major contributor in the expansion of the apple store. The Apple retail stores are usually small and diminutive; they are allocated in different countries hence a slight change in the transformation of its size due to expansion can lead to unstabilized organizational structure. The globalization and need for increased market reflects the size of the apple store. Hence, CEO Timothy D, Cook is facing a major problem in structuring and managing his executive directors in those 417 stores. The changes in the structure of the organization due to size should consider and collaborate managerial skills, planning, analysis and gathering of information, reporting system, decision making strategy and cross-branch communication to affect a suitable organization structure.
Strategy and changes in organizational structure.
Strategy defines the organizational culture, hence any culture should change to suit the changes in organizational structure. Apple store has been developed through the apple branding strategy. The strategy or culture of the apple computer, Inc. is based on customer experience, product design and promotion. The apple retail store has been making low sales due to lack of personnel and expertise that can maintain and comply with the strategy. Apple computer, Inc has been performing well in the market positioning of its brand, but needs to actualize the effort has been left in the retail store. Therefore, the strategy of the company has a great impact on the organizational structure of its satellites or constituents like the retail stores. Organizational structure should change in terms of the profession to accommodate such strategy to the company’s expectations.
On the issue of environment in relation to the organizational structure and size has been a major challenge for the company’s performance, especially the external factor. Using the PESTEL model, there are four main factors that have been affecting the apple store. They include; socio-cultural, regulatory influences, economic changes and technology.
Firstly, social-cultural is a major challenge that is completely unpredictable and uncontrollable. The social-cultural factors in relation to the apple store are derived problems; the factors have been influencing the Apple computer Inc that translate the operation and organizational structures of the apple store. The socio-cultural factors are as follows.
Workforce composition within the surrounding of the apple retails; apple store has a chain of retails across 13 countries and does not mean export of the working force from the headquarter of the apple store, but rather a selection of the working force within its environment. The lack of competent, skilled and qualified personnel within the location of the apple retails has been a threat to the company’s professional performance.
Demographic factor has been affecting the size of the apple store; apple store is providing products and services for children, youth and old. However, due to increasing population that translate increased in customers of their products for both youth and old, firm is facing a challenge of accommodating such change in relation to the size of the apple store hence low sales. The products are in high demand due to technology advancement; the quantity or supply of its products depends on the size of the retails and number of the retails controlled by the apple store which can eventually translate its sales per retail.
Diversity, society and ethics, are mutual factors that impact the image and reputation of the apple store. The brand positioning of the Apple computer Inc depends on the opinions and preference of the society. Due to globalization, the society has been characterized by a combination of race, gender and ethnicity as well as the change of business ethics. The organization’s insensitivity to the issue of diversity has bread lack of cooperation and teamwork among workers within the retail store. Diversity is, in fact, a characteristic of any modern society, poor management and insensitivity to the changing business ethics on the issue of diversity can be a big challenge to the professional performance of any business. Hence, the apple company has been facing such a problem.
Globalization is another socio-cultural factor that pose a challenge in the organizational structure and professional performance of the company. Globalization provides a no-restricted zone because it entails Skype territories all over the world. The Apple store in relation to apple computer Inc is endowed with the communication and the electronic network that has enabled its brand to be successfully in market positioning globally. However, the main problems are encountered during the global decision making in encountering the international market management and appropriate production network that will affect the global competition.
Secondly, regulatory influences have been another issue that the apple store is encountering. Factors such as changes in the tax code, especially the issue of VAT in different countries of its operation has made a fatal impact on the sale of its product. The apple store is known for expensive products such as iPhone, iPad and Macintosh computers. Hence, increased VAT rates have a major impact to the retail store because its organizational structure in effecting changes depends on its headquarter. Another issue is the change in patent laws; on June 2013, the Apple computer Inc has been found with the fault of violating the patent of Samsung. Hence, the products of the apple were banned. Hence, the apple store suffered a big loss in sellingthe United States especially in United States of America.
Thirdly, technological changes have been both a challenge and an opportunity for the interface and operation of the apple store. The rapid technological change is a problem that not only Apple store is facing but rather a problem for all tech-companies. Firstly, product design and interval of launch in relation to the stiff competition has put the company into pressure. The pressure of releasing new design of its products before the previous products maximum sale. Such a problem accelerating product launch due to rapid technological change has made the Apple store unable to unveil new products. This lack of the plan in introducing new products that may have a deadly effect on market completion. Also, another threat is the issue of E-commerce; the apple store mainly supplies mp3 devices such iPod and mp3 players (iTunes), but the issue of online music marketing has posed a threat to the sale of such devices.
Lastly, economic changes are obstacles to the financial performance of the apple store. Exchange rate changes in different countries especially the issue of dollar; the apple store has been experiencing a problem of imbalance of trade due to the revenue received from the currency of other countries and the dollar from united states of America. Such a problem reduces the potential of earning profits in those countries. The tax increase in United States of America due to economic recessions has negatively affected the apple store. Also, employment has been a major problem especially in the United States of America; the Foxconn, manufacturer of the apple products has been facing a problem of rapid increment of the worker’s payment whereby the payment level has tripled since 2012 to date. Hence, it gives a big challenge on the production cost in relation to the price of its products. Currently, the products are expensive, and increase of the price can make the company lose the trust of its loyal customers.
The above analysis of the environmental factors affecting the apple store provides an insight on how a tactical strategy can be formulated to overcome such difficult. Therefore, it is wise to analyse the opportunities that the company is experiencing as far as the external environment is concerned. The apple store products especially the iPad and the iPhone are in high demand in the market hence provides a competitive advantage to the apple store and its chain of retails.
The iTV and growth of smartphone and tablet market has given apple store a great support; firstly, the iTV promotes the product ecosystem of the apple store and increase sale of apple TV. Secondly, the growth of its products market provides an opportunity for the firm to expand its shares in such markets.
Also, the issue of infringement of the apple patents provides damages that translate increase in its cash reserves and competitive advantages because infringement damages the reputation of its competitors and sale of its products
The question remains on how the company can overcome the external factors affecting the firm. The following are possible recommendations that the company can consider in overcoming its external challenges.
Firstly, need to embrace and provide awareness to the issue of diversity. Diversity affects the organizational behaviour so is the organizational culture and structure. Need to understand and manage diversity brought about by the influence of globalization can have a positive effect on the professional performance of the apple retail stores worldwide.
Secondly, the location of the apple retail shops should be based on the composition of the workforce on such environment. Also, the business ethics should be the one that can suit the company’s expectation. Hence, the professional performance of the apple store shall improve.
Thirdly, the analysis and the committee should be formed to find out the issue of IP patent breach to put the company on the safe side and possible loss. Breached of the apple IP patent has been a major crisis that continues to weaken the sale of apple products and the firm itself.
Also, the strategy and the size of the apple store should undergo reformation in order to cope up with the issue of changes in organizational structure. High demand of the apple products and increasing customers should provide an insight on how the company can increase the size of its stores, and ways of increasing the number of Apple retail stores globally for more supply of its products.
Lastly, the rapid technological change should provide an opportunity of how improving the products already in the market for competition purpose rather than innovating and launching new products. Such a resolution gives the firm more sales, profits and competitive advantage of its product before launch of another product. It provides the advantage of the new face apple in the market and increased innovation capabilities.
The apple store should consider the above recommendation and implement the following strategy that can affect the future changes of organizational structure.
Long-term objectives or prospects and options.
The company should consider the long-term prospects; need to update the available products to the customers’ satisfaction and improve the features of such products. Therefore, continuous updates of the products increase its innovative skills for the sake of long-term success of the company. This is to give ample time for the innovators to come up with a new product in the market. Also forming alliances can be a solution to the problems of patent infringement and breach. Moreover, it provides an opportunity for the company to open up and expand into the new markets globally.
Strategic branding (SBU)
The apple store should continue with its move of differentiating its products from competitors through brand DNA. Brand DNA is the core concept of the brand of any organization that is launching a product in the market. It regulates the marketing and consumer experience. Brand DNA provides uniqueness of the brand and differentiate a product from its competitors, and it entails brand value, brand promise, brand identity, brand vision and preposition.
Organizations and businesses should consider organizational structure and size in relation to the changes in the external environment. The analysis such PESTEL and SWOT models should be considered when a firm is planning for a strategy that will help compete and overcome the external factors. Therefore, the above discussion on Apple store has given a solution that can overcome the problems of the external environment and the possible strategy that apple store can increase its sales for the future success of the company.
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