EXAM REVISION QUESTIONS
Exam Revision Questions
Strategy entails the criteria of using strategic forces to implement approved plans in the most effective manner as possible. It includes the use of a company’s resources and skills to realize the detailed plans by achieving the intended but best results. Many a times, strategic plans hold the highest probability of success because organizations execute the right actions at the right time. On a wider perspective, strategies are used to develop substantial values for organizations. There is no doubt that every successful company has a success story behind it. Simply put, the concept of strategy in strategic management should be understood as the practice of creating the future of an organizations. Strategies are developed based on product focused entities and market entities. Many strategies are developed based on future assumptions with considerations of uncertainties.
The skilled designers, engineers, and programmers at the company also form a major pool of strategic resources because without the exploitation of their capabilities, the company could have been unable to create a strengthened and ongoing competitive advantage. Another important strategic resource factor at Apple Inc. entails the management of corporate culture. Apple Inc.’s corporate culture involves the management of attitudes, beliefs, values, and habits that run the organization. This culture enables the company to differentiate the key success factors from other not-so-important factors. For this reason, strategy ought to be deeply rooted within the organizational culture.
Several schools of thought have defined strategy based on particular perspectives. Examples of schools of thought that have been at the forefront in defining strategy include the planning school, the design school, the entrepreneurship, the positioning school, and the cognitive school among other schools. Five P’s have also been developed to define the application of strategy in organizations. These P’s include perspective, patterns, plan, position, and play (Caliskan, 2010). Other institutions have advocated for the importance of strategies in problem solving. For instance, pragmatic knowledge and methodologies are applied to define the nature with which management executives apply strategies to get things done right at their organizations.
The resource-based view and dynamic capabilities theories can be used to explain the application of strategy at Apple Inc. According to these theories, Apple Inc. competes depending on its capabilities and resources. Such resources are valuable, rare, inimitable, and non-substitutable making them difficult to be sold in the market (VRIN). The application of strategy using the Resource Based View is dependent on management of knowledge and skills, learning, and acquisition of organization capabilities (Lado, and Kroll, 2006).
The challenge of gaining competitive over competitors is the major issue that faces many business organizations. Only organizations with the fittest strategies manage to survive increased competition in the market. Innovation forms a major ingredient for creating sustainable competitive advantage. Innovation entails approaching management perspectives from a broad perspective, using flexibilities, and taking risks at every opportunity (Caliskan, 2010). Innovativeness involves the application of organizational capabilities to develop new products coupled with the aspect of using manpower and resources that foster innovation.
There is no doubt that Apple Inc. is one of the most innovative companies in the world. Apple Inc. innovates through several ways. These includes product innovation, creativity, business model innovation, leadership, and improvement of customer experience. The innovation factory at Apple Inc. has played a major role in the developing creativity, leading profitable innovations, launching successful products, and stimulating ideas (MarketLine Report, 2012). Innovation helps the company to leverage it’s the company’s resource capabilities in efforts aimed at seizing new opportunities in the marketplace and expand the business.
In product development, Apple Inc. uses technology to develop new products depending on the needs of customers as opposed to developing products based on the technological needs in the market. The clever combination of technologies coupled with the clever mix simplicity and easy user interface has strengthened the process of product development at Apple Inc. This has led to the culture of creativity and innovation that enables the company to innovate again and again. The application of design systems has been applied to advance and support product leads and development.
Apple Inc.’s innovative strategies involves combining technologies with ideas. The results are then used to develop elegant products and software. Apple is known as the integrator and orchestrator of technologies that are combined with new twists to generate winning products. The addition of new strategies and ideas to existing methods has led to the development of network innovation, a strategic theory that is widely applied by other leading companies to expand on their winning ideas.
Technology integration is the major driver used in igniting innovation. However, many organizations often forget to utilize the full potential of technology. As such, they fail to unleash the creative energy within the organization. Another area where technology is heavily neglected is the aspect of combining technological skills with the organizational insights and the company’s business model. Innovation does not occur automatically but it is rather a result of careful planning, hard work, and the right execution of organizational functions. According to Kotler, & Keller (2009). innovation comes as a result of hard work as compared to being a result of genius.
An organizational business model is a key factor towards the process of creating sustainable competitive sustainable advantages. The idea of innovation in a company’s business model is evident in value proposition, customer targeting, network distributions, customer relationship management, resource identification, configuration of value, and strengthening partnerships (Caliskan, 2010). There are very few companies that utilize innovation to strengthen their competitive advantages. At times, such organizations confuse innovation with research and development.
Marketing and brand management are two aspects that represent that activities of any business entity. While brands represent the most critical assets for any organization, the marketing team can utilize the credibility of the brand to generate sales. In turn, the company’s revenues are increased. Branding is a strategy that is used to create reputation with the targeted market. Companies with good reputations cannot be easily changed and this factor plays an important role in advancing customer loyalty. Branding creates a good image for any organization thereby enabling it to form a firm foundation for the marketing department (Kotler, & Keller, 2009). Dedication to the development of quality products forms a major part in creating increased sales.
Branding is a strategy because it entails developing a promise to deliver quality products, and making all the necessary efforts to maintain the promise. In terms of planning, the brand is defined, positioned, and delivered to the customer. As such, companies with reputable brands adopt the art of creating and sustaining brands that are certain to enable them attract loyalty from customers. Equally brands act as strategies for differentiating products of a company from other companies. Another way that branding acts as a strategy is the process of managing the tangible and non-tangible characteristics of products. These includes packaging, distribution, pricing, emotional connections among other factors.
Marketing strategies are complimentary to branding strategies because a quality brand leads to increased revenue generation. Branding creates sufficient demand for products. The Four P’s of the marketing mix are directly related to the branding aspect. Brand managers are influential integrators who play critical roles in product development, managing operations, and executing marketing strategies (Kotler, & Keller, 2009). Marketing strategies produces major shifts for many products. For instance, a strong brand is capable of changing a customer’s perception on matters such as safety risks, premium prices, and prestige.
The Apple brand is one of the strongest brands in the market. Nearly all Apple products are developed to capture the needs of a particular niche market. Apple products are designed with a stylish and unique design that enables such products to be recognized by loyal consumers. The products are packaged attractively making it easier to convince consumers to purchase such products. The strong Apple brand has enabled Apple to obtain a high market share for most of its products. Marketing strategies are developed on the basis of the brand image associated with that line of products. For instance, the strong brand equities associated with the iPod, iPhone, and iPad have played a major role in marketing new product developments for the iPod, iPhone, and iPads respectively (Kotler, & Keller, 2009). As such, brand management and marketing management are important strategies that are used by organizations to increase the outcome of their products. While branding is fundamental in conveying the product message and creating customer loyalty, marketing persuades consumers to consume the product in addition to enabling customers to develop a strengthened emotional connectivity with the products (Kotler, & Keller, 2009). Therefore, marketers should consider brand value when marketing the products.
Corporate social responsibility has been the leading strategy that most companies has embarked on to improve their popularity. Most companies identify the most controversial issues in the society and set programs that help ease the problems. However, social responsibility describes a broad sense of activities that companies undertake for benefits outside their scopes. In the modern sense, CSR can be associated to public assistance, community obligations, and public morality (Gao 2009).
Apple Inc. has the most recognizable and influential corporate social responsibility strategies. It has incorporated most of its CSR into its products and this has helped make it the most profitable company in the world. Notably, all companies are being argued to engage in the fight against environmental degradation. Apple Inc. has played its role as a world major electronics producer. The most noticeable and yet iconic CSR strategy is that Apple has embarked on producing inclusively all recyclable products (Mitchell 2010). Despite the fact that Apple Inc. does not flaunt its social work, it lets the finesse and product speak for them. Recent products such as the 17 inch MacBook are made of fully recyclable material that is totally free of mercury and arsenic making it the world greenest laptop. In addition the non-removable batteries in the iPhones and other MacBook’s gives the batteries more productive life thus decreasing the number of batteries being disposed of their products.
This strategy ensures that instead of customers acquiring a new laptop once the old one runs out, they acquire a new laptop. Thus reduces the chances of expired batteries being disposed of in a way that is not environmental friendly way. This also enables Apple companies cut costs while producing new products since they recycle materials that have been returned by customers.
In another strategy, the new Apple CEO has launched a new feature that helps the company engage in charity work. It is called the ‘dollar for dollar’ program (Mitchell 2010). This program matches the donations made by employees and is directed to much needed charity work. This depicts the image that despite Apple growing profit margins, it still recognizes major global needs.
Research has shown that this acts as a source of improving a company’s popularity since it acts as a mode of advertisement (Gao 2009). It helps companies cut costs since they could use similar avenues for both advertisement as well as venue of corporate social responsibility. Despite the joint objectives, it speaks to a larger mass since it improves the company’s image by depicting that they care for what happens to their customers. These efforts may involve more talent and strategy unlike performing business under the social norms. However, despite the added involvement, the company ends up saving money that is generated from cutting production costs and other beneficial avenues.
Elsewhere, through Apple’s CSR, the company has improved on its integrity, empathy, and zeal (Mitchell 2010). Unlike other company’s policies to flaunt their CSR works, Apple has slipped from the predictable worldwide strategies. Many critics and environmental groups have put Apple in the hot seat to publicize their social works. However, their secrecy and meekness has spoken greater than any conference or publication would. This is because the globally successful company has shown that it embarks on charitable work out of virtue and humanity and not calculative or obligatory strategy. These characteristics have highly paid off since Apple Inc. maintains a very loyal customer relationship.
With Apple as the leading electronic manufacturer, it holds very unique relationships with its business partners. In its line of business, Apple cannot be able to produce all its cutting edge technology and as well run business. It would incur he company massive costs that are reduced through outsourcing strategies. Its necessity forged partnerships enable it gain dominance in new markets, obtain new scale economies and gain competitive markets over their competitors. This is evident since iPhone is popular for its futuristic electronic features and out of the box software (Naidu-Ghelani & Bagchee 2011). This has been achieved by diversification and relationships built over the years in business dealings.
iTunes is one of the avenues of partnership that has diversified Apple Inc. to be more than an electronics producer. It has forged partnerships with musicians all over the world to create a globally recognized search engine for music tunes. This has assisted artists in their fight for pirated music (Casadesus-Masanell & Hervas-Drane 2010). This application enables the public access a wide range of tunes and the artist benefit by getting a commission for every hit. Initially, this idea was criticized by many but after the launch of the iPod, it has continued to revolutionize the music industry. It opened up an avenue of providing legitimate music for the much eager customers. The new markets that have been opened by the iTunes and iPod have benefited both the company and the benefiting artist in terms of profit margins.
TPK Holdings is another partner of Apple that has helped it achieve greater heights in all the three areas of discussion (Naidu-Ghelani & Bagchee 2011). TPK Holdings is the world leading touch screen panel producer. With Apple being the first to introduce touch screen phones in the market it achieved market dominance before the market was flocked with other products. Partnership between Apple and TPK Holdings made Apple regain its dominance in the telecommunications industry. In addition, this partnership benefited TPK Holdings as it has continued to post record profits since the launch of iPhones and iPads.
Another significant partnership is between Apple and Microsoft. Initially, Apple and Microsoft had a very bad relationship due to law suits of Apple against Microsoft for stealing some ideas. It also was very brutal since the two were significant mutual competitors. However, the bad relationship between the two has turned and become a benefit for Apple. As per contract, Microsoft is responsible for producing windows for Apple and this has enables Apple achieve greater heights with the new product that saw Apple move from the Macintosh era to the MacBook dominance (Naidu-Ghelani & Bagchee 2011). This partnership has seen Apple achieve new markets, and improve its completive advantage as well since it has updated and easy to use programs.
Currently, Apple Inc. is the company that has benefited most from making its products recyclable. The company responsible for the production of the mercury and arsenic free products is the Catcher Technology (Naidu-Ghelani & Bagchee 2011). It is the leading Taiwan producers of aluminum and magnesium casting electronics in the world. Most of Apple Inc. latest products bare these characteristics that include MacBook’s and iPads. Apple as well as the Taiwan Catcher Technology has greatly benefited from this partnership. Apple has moved to greater heights in their production scope and the achieved a greater competitive advantage due to their new environmental friendly products.
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