Question 1 [30]

Read the following case study on Apple: http//:Apples Business Strategy: What Can We Learn? | SB (startingbusiness.com) and answer the questions that follow:

Apple's Business Strategy

While the sale of consumer tech products has been Apple's modus operandi since 2003, the crux of its commercial success lies in its forced marriage of hardware with software. If you buy an iPod, for instance, then you need to download, install and subscribe to iTunes, while if you want to use the revolutionary Apple Pay service at a checkout, then, yes, you guessed it: you need to buy an Apple Watch, iPhone or iPad. Apple plans to continue to consistently build the easiest to use and most intuitive consumer electronics and to continue to expand the app ecosystem.

Value

In terms of value, Apple is unique. Its product upgrades are heralded almost fanatically by loyal consumers, regardless of the actual levels of innovation involved in their design, yet this is what has set Apple apart since its "rebirth" in 2003: brand status. Essentially, Apple devices are as much consumer accessories as they are mobile telephones or computers. Through a combination of the legendary marketing techniques and the unique design and usability features implemented by Apple's engineers, its products have long since exceeded mere functionality. There is enormous value in Apple's software and services, too. Consumers may buy iPhones en masse because of their sleek and revolutionary design, but this hardware is just a gateway to what really hooks them in: platform-exclusive programmes, such as the App Store, iMessage and FaceTime. Apple products are positioned at the highend. Their high-quality intuitive design covering both hardware and software is difficult to compete against.

Apple's Branding Strategy

As previously mentioned, Apple has enormous brand value the largest in the world, in fact. This success is built upon several factors, such as the company's perceived value when compared to competitors, but the critical ingredient is Apple's "think different" mantra. The exclusivity of their product launches is more akin to a luxury brand, for instance, while users develop an emotional attachment to the brand that is almost unprecedented, this has resulted in a consumer environment where people are not buying Apple products because they are the best on the market they are buying them simply because they are Apple. Apple represents a master-class in branding. It can be (and regularly is) argued whether or not the iPhone is the best in class from a functional and technological perspective, but the bottom line is that it doesn't matter: Apple has cultivated an almost fanatically loyal consumer base through the power of its brand. Apple is frequently ahead of competitors in terms of innovation. It is able to sue any competitors that copy their technology.

Apple's Company Culture

As an enterprise that is almost entirely reliant upon the technical and artistic vision of its employees, Apple has sought to create an environment that, in line with its mission and vision statements, is all about innovation; as Jobs (the founder) himself once remarked, the company doesn't hire people to tell them what to do, but rather "hire(s) smart people, so they can tell us what to do". Apple responds to the challenge of competition through innovation. Some of these innovations are complete failures but others are runaway successes. One of Apples values is think different. Its culture and personality are all about making the best products in the marketplace and doing it in an innovative way.

1.1 Explain the five Ps of strategy. Use examples from the above case study to highlight your discussion. (15)

1.2 Read the following extract on the vision and mission statement analysis of Apple:

http://Apple Mission Statement 2020, and answer the questions that follow:

Apples mission statement is to bring the best user experience to its customers through its innovative hardware, software, and services.

Vision Statement

Apple Incorporations vision statement is to make the best products on earth, and to leave the world better than we found it.

Core values

Apple core values include inclusion and diversity, education, accessibility, environment, supplier responsibility and privacy.

1.2.1 Differentiate between strategic intent/vision, mission statement and value statements by referring to the examples as given in the above extract. (6)

1.2.2 List the benefits of a clear strategic direction in an organisation. (5)

1.2.3 Explain the challenges of creating a clear strategic direction. (4)