STI COLLEGE ORTIGAS-CAINTA

TASK PERFORMANCE
IN STRATEGIC
MANAGEMENT
(PRE-FINAL)
Submitted by:
Richelle Ann A. Datlag

(BSHM 603)

Submitted by:
Ms. Sherrie Mae Igne
(Instructor)
I. COMPANY BACKGROUND

▪ CURRENT PERFORMANCE
Apple, Inc. develops, manufactures, and distributes personal computers, software,
networking solutions, and peripherals, as well as a line of portable digital music players. The
Macintosh line of desktop and notebook computers, the iPod digital music player, the Mac OS X
operating system, the iTunes Music Store, the Xserve G5 server, and the Xserve RAID storage
products are all part of Apple's product portfolio. The company's products are available for
purchase online, through third-party wholesalers, and at its own retail locations. Apple operates
125 retail stores in the United States, as well as in Canada, Japan, and the United Kingdom. Steve
Wozniak, 26, and Steve Jobs, 21, both college dropouts, founded Apple in April 1976.

▪ STRATEGIC POSTURE

MISSION
Apple's current CEO, Tim Cook, stated in the 2018 annual report that the company's goal
is to "offer the best user experience to its consumers via its revolutionary hardware,
software, and services." Apple's mission statement emphasizes the importance of
providing the best possible service to its customers. The announcement also details how
the company intends to accomplish this.

VISION
"We believe we are on the face of the earth to make great products, and that will not
change," Apple says in its vision statement. "Through this statement, the company
emphasizes its commitment to providing high-quality products to its customers." They
also intend to do so for a long time, according to the statement. It goes into great detail
about how the company approaches its operations in order to position itself as the
dominant player in the industry.
 OBJECTVES
Product Apple maintains a large market share and high-profit margins while
offering premium products at premium prices. Continue to develop groundbreaking
products as a goal. Apple has established a reputation for being a market trendsetter
with each of its products bringing something new and exciting to the world.

POLICIES
The Business Conduct Policy applies to all full-time and part-time employees of Apple
and its subsidiaries, and it establishes a standard for what is expected of all Apple
employees. Members of Apple's Board of Directors are also covered in relevant sections.
The Business Conduct Policy also informs employees about additional resources
available to them, such as the Business Conduct Helpline and the Business Conduct
website, which contain guidance and frequently asked questions to help employees
understand Apple's Business Conduct approach. Annual online Business Conduct
training is required for all employees, as well as a review and certification of their
understanding of the Business Conduct Policy. Employees must also complete online
Respect at Apple and Privacy training, as well as additional mandatory online training on
specific topics such as anti-corruption, depending on their job responsibilities and
location. Periodically, focused live training on Business Conduct and other relevant topics
is also organized.

II. INTERNAL ENVIRONMENT

APPLE RESOURCES:
Steve Jobs and Steve Wozniak founded Apple, a leading technology company. The company is
known all over the world for its unrivaled technology and products such as the Mac and iPhone.
Apart from its highly appealing and well-known products, Apple is best known for its excellent
marketing. The company introduced several market-leading products,
including the Mac, OS, iPhone, iTunes, iPad, and others. It has also added a variety of other
products and services to its product mix over time. Apple, which is primarily competed against
by Microsoft, has very strong brand equity in the global markets.

Capabilities:
Apple's competitive advantage and leadership position in the technology industry gives it an
advantage. iPhone is a highly attractive smartphone that is also packed with cutting-edge
technology and apps. It is the brand's primary source of revenue. Apple is known for
technological innovation, but it has also improved its competitive position in the market through
marketing and supply chain management, as well as a strong focus on customer experience.

Competencies in Marketing:
 Apple has superior innovation skills; they excel at improving existing technology, increasing its
capabilities, and making it simple and enjoyable to use. They're also adept at expanding markets
and attracting large audiences to new technology. Because of this skill set, they will continue to
succeed in the marketplace by delivering exciting and interesting new products and generating
large-scale demand.

Competencies in Operations:
Apple Inc.'s operations management (OM) entails implementing the OM's ten decisions to
ensure that all aspects of the company run smoothly. Product design, quality management,
process and capacity design, location strategy, inventory management, and other operational
areas are among the ten decisions in operations management. In Apple's case, the 10
operations management decisions are meticulously implemented through coordinated efforts
in product design and development, sales and marketing, the company's supply chain, and
other business areas. Apple Inc., a leader in the computer technology and digital content
distribution industries, is an example of operations management success.

Competencies in Finance:
Apple was valued at $76.5 billion in 2012, according to Strategic Management Insight. Customers
are loyal to the company's products and services, making it extremely competitive in the market.
Samsung and Nokia are their main competitors. Apple is the world's second largest information
technology company, according to Wikipedia.

III. EXTERNAL ENVIRONMENT

POWER OF THE SUPPLIER
Apple Inc. can access many suppliers all over the world because of its global supply chain. In the context
of Porter's Five Forces analysis, the resulting large number of suppliers is an external factor that only
exerts a weak to moderate force against the firm. Individual suppliers are weak in imposing their
demands on firms like Apple because of the moderate to the high overall supply of inputs, such as
semiconductors. Furthermore, the ratio of the firm to supplier concentration reduces suppliers' power
and influence in the industry.

BUYER POWER
Customers can easily switch brands, giving them an advantage in persuading companies like Apple to
ensure customer satisfaction. Each buyer's purchase is insignificant in comparison to the company's
overall sales. This situation makes consumers weak on an individual level, according to Porter's Five
Forces paradigm. Buyers can switch providers because precise comparison information about the
features of competing goods is available. Customers can put significant pressure on Apple and other
companies because of this external aspect.

RIVALRY IN COMPETITION
Other companies, such as Samsung and LG, compete fiercely with Apple. The quick invention, aggressive
promotion, and imitation, as evidenced by such aggressiveness, have a powerful influence in the sector.
Furthermore, the market's available items are largely comparable in terms of achieving specific goals in
terms of product diversification. For Android and iOS devices, many popular apps are available, and iOS
users can access cloud storage services from a variety of organizations. On the other hand, because of
the low switching cost, customers can easily switch from Apple to other brands based on price, function,
accessibility, network externalities, and other factors. Other companies, such as Samsung and LG,
compete fiercely with Apple. The quick invention, aggressive promotion, and imitation, as evidenced by
such aggressiveness, have a powerful influence in the sector. Furthermore, the market's available items
are largely comparable in terms of achieving specific goals in terms of product diversification. For
Android and iOS devices, many popular apps are available, and iOS users can access cloud storage
services from a variety of organizations. On the other hand, because of the low switching cost,
customers can easily switch from Apple to other brands based on price, function, accessibility, network
externalities, and other factors.

THREAT OF SUBSTITUTION
There are a few alternatives to Apple products on the market. Instead of using iPhones, people can take
pictures with digital cameras and make calls with landline phones. This external factor has a moderate
impact on the industry environment, according to Porter's Five Forces analysis model. However, due to
their limited features, these substitutes perform poorly. Many customers prefer Apple products because
of their convenience and advanced features. As a result, substitution has a limited impact on the
company's operations. Furthermore, buyers are unlikely to substitute. Customers, for example, would
prefer to use smartphones rather than purchase and maintain a digital camera, a cell phone, and other
devices.

THREAT OF NEW ENTRANTS

To compete with companies like Apple Inc., a company must have a large amount of capital.
Furthermore, building a strong brand to compete against large corporations such as Apple is extremely
expensive. External factors make newcomers vulnerable. There are, however, large companies with the
financial means to enter the market. Google, for example, has already done so with its Nexus
smartphone line. Samsung was once a newcomer as well. These examples demonstrate that large
corporations have the potential to compete directly with Apple Inc. As a result, the overall risk of new
entry is low.

IV. ANALYSIS OF STRATEGIC FACTORS

SWOT ANALYSIS
 STRENGHTS WEAKNESS
Globally Iconic - When it comes to personalized High Priced Products - Because of their high
advanced computers and smart technology prices, Apple products can be considered a
devices, Apple is one of the most dependable luxury. The products are targeted at consumers in
companies. It has a steady increase in the the middle- and upper-income brackets. Apple
number of loyal customers. products are out of reach for low-income people.
Only those with a middle or high income can
Top Technology - Apple was the first company to afford their products due to their high cost.
introduce some of the world's most
groundbreaking products (iPhones, iPads, Incompatibility With Other Software - Customers
AirPods). Apple is still committed to creating enter the Apple universe when they buy an Apple
better, more capable technology devices. product. Apple's products are incompatible with
other devices because they don't support other
Brand Of Choice - It isn’t big news that Apple is a software or technologies. To keep using their
favorable brand in corporate offices, especially Apple products, customers must purchase only
among creative professionals. Apple offers top- Apple apps and accessories.
quality technology solutions for every
corporation’s needs. Professionals prefer high- Unfair Business Practices – Following payments
performance technology such as Mac Pro or to make Google's search engine the default
iMacs for visual design, animation, video search engine for its Safari web browser, Apple is
production, and other creative work. Proficient being investigated for unfair business practices.
Rivals find it difficult to enter and expand into the
Research & Development – Apple devotes itself search engine market due to collusion between
to product development. To better understand the two behemoths.
customer needs and market trends, extensive
research and study are conducted. Apple
continues to invest heavily in research and
development in order to maintain a competitive
edge and future growth. Apple, for example,
invests $21.9 billion (roughly 6% of revenue) in
research and development.
OPPORTUNITIES THREATS
Qualified Professionals - Apple's researchers, After the effects of the Coronavirus Outbreak -
developers, and product specialists are a group ofApple's manufacturing and supply chain are
highly qualified individuals with extensive heavily reliant on China. Recent events have had
experience in consumer product branding. Apple a significant impact on and disruption of its
can continue to expand its team and create new operations. Furthermore, China accounted for
opportunities. 18% of its $365 billion in revenue (a big market
for Apple). The outbreak has had a significant
Expansive Distribution Network - Apple Inc. has a impact on Apple's business, and it may continue
chance to grow its distribution network. Apple's to do so in the coming years.
distribution network is currently very limited,
with only limited room for expansion. Apple can Increasing Competition - Although Apple has
increase revenue and sales by focusing on established itself as a brand, it still faces
expanding its distribution network. In addition, competition. With technological advancements,
the company can benefit from effective marketing
and promotion.
 companies like Samsung, Google, and Dell are
Consistent Customer Growth - For years, Apple challenging Apple. To stay ahead of the
has dominated the technology industry. They competition, Apple must either introduce new
offer top-notch service and cutting-edge technologies or revise its pricing policy.
technology that transforms the customer
experience. Their 92 percent customer retention Market Penetration - In the smartphone market,
rate is incredible. Apple can always rely on the there has been a significant shift in market
internet's power to attract new customers and penetration by other brands. Android software is
form new partnerships in the future. being used by companies such as Samsung, HTC,
and Lenovo to create new smartphones. In the
smartphone market, there has been a significant
shift in market penetration by other brands.
Android software is being used by companies
such as Samsung, HTC, and Lenovo to create
new smartphones.

China Tariffs - The US government has raised

tariffs on Chinese imports, raising the overall cost
of the goods. As a result, the gross margin on the
products suffer, and the product may become
more expensive for customers

V. CORPORATE LEVEL STRATEGIES

Growth Strategies
• Horizontal and Vertical Growth - Understanding the distinctions between vertical and
horizontal growth, as well as concentric and conglomerate diversification, is critical. For
a long time, Apple focused solely on one product line. It would expand this product line
in order to gain a larger market share. Vertical growth is the term for company will
diversify its products. On these occasions, the company would produce additional
product lines. Horizontal growth would be the term for this. Concentric diversification
occurs when a company introduces new products that are related to existing products,
whereas conglomerate diversification occurs when a company introduces new products
that are unrelated to existing products.

Stability Strategies
Pause/Proceed-with-caution Strategy - Apple Inc., grew from a small business that made
products for a niche market in a small town. In fact, according to this case study, Woz's company began
as a personal laboratory where he built various computers for fun. They were machines that couldn't
handle a wide range of tasks. When Woz teamed up with Steve Jobs, they took this idea and turned it
into one of the world's most successful businesses, with products that continue to capture new markets.
Stability has been another important strategy.
 Retrenchment Strategies
• Turnaround Strategy - Apple's main turnaround strategy is to restructure the company
around a profitable core business. Apple's core businesses of iPhone and iPad manufacturing have
proven to be highly profitable, and the company's management is putting even more emphasis on these
core businesses with the introduction of the iPad Mini, the development of a lower-cost iPhone for
emerging markets like India and China, and committing to investment in the IOS platform. The company
has ensured this by increasing its research and development spending. Retrenchment is the final and
least desirable strategy. If profits are reduced, cost-cutting measures must be implemented. Retrenching
some employees is one of the most effective cost-cutting strategies.

Strategic Alternatives and Recommendation Strategy

▪ GROWTH STRATEGY
I propose Concentric Diversification under Horizontal Growth because Apple's ability to
come up with new unique products in the market was one of the most important factors
that contributed to its success. To ensure that this trend continues, management should
create a department dedicated solely to developing new market ideas.

Advantage:

External risk is reduced by concentrated diversification. You can increase profits by appealing to the
same customers if you have a variety of investments or products with a common purpose.

Disadvantage:

If you don't choose your products carefully, you risk diluting your brand's identity, as well as sending
mixed messages to customers about what your company actually sells.

Concentric diversification can also backfire by overcomplicating an already complicated business

structure; it must be carefully planned to reap the full benefits.

▪ STABILITY STRATEGY
I propose a Profit strategy under the stability strategy because it can help the company if
they want to be successful, especially in terms of profitability. This strategy can work in
the temporary problem.

Advantage:

• Sustain profit
• When a company's sales are declining, artificially support profits

Disadvantage:

• Temporary solution
 • Advantage for the competitors

▪ RETRENCHMENT STRATEGY
I propose a Captive Company Strategy since Apple, Inc. was achieved by increasing the
company's research and development budget. It entails a trade of independence for security.

Advantage:
• Reduced operating costs
• Increased coverage and capacity
• Direct access to reinsurance wholesale markets

Disadvantage:

• Inability to Spread Risk

• Difficulty of Entrance and Exit

VI. FINAL RECOMMENDED STRATEGY:

For Apple, Inc. we propose a Concentric Diversification Strategy since Apple, Inc.’s corporate strategy is
to keep expanding its product portfolio. Apple's business started in the computer industry, but it has
grown to be much more. Apple now sells a wide range of products, including computers, phones, and
music players. Apple saves money by using many of the same resources across all of its products. Apple's
ability to design and develop its own operating systems, hardware, application software, and services in
order to provide innovative products and solutions to its customers is at the heart of its business
strategy.

VII. IMPLEMENTATION PROGRAM

Resource allocation will be an integral part of Mac computer product line extension strategy
implementation. Resources will be prioritized with the opportunities in an effective way.

Finance
Finance is a key resource requirement of implementation of a new strategy. A budget will be
set out for the implementation plan. Since the company will invest heavily on Mac product
line extension, a capital budget will be required. Budgets will be set out for all the
departments in the organization to implement the strategy. Revenue budget will be essential
since the company will be managing new development areas.

Human resources
This will involve managing personnel in the project. A well-planned HR policy will be
effective in the implementation of the project. Staff planning will be necessary so as to
identify structures needed in the organization and the number of employees required.
Effective training and recruitment will be necessary for the success of the project.
 Materials and technology
Managing materials for a new project is difficult. Inventory and stock control will be crucial
to ensure all the operations run smoothly in project implementation. Managing materials will
give emphasis on the quality desired by the organization. The project will be implemented
using advanced technology. Apple employs state of the art technology in designing and
developing their products.

Time
Time is very crucial in strategy implementation. If the time is not managed properly, the
project will consume a lot of resources and may fail before it serves its purpose. A value
analysis of usage of time will regularly be done to ensure the project implementation is in line
with the schedule. A Gantt chart will be designed to schedule the tasks involved in the project
implementation.

VIII. MANAGEMENT LESSON LEARNED

Concentrate on the details. Apple is known for paying close attention to even the tiniest details.
Similarly, in ministry, we need to be a little more obsessive about the details of how and to what
degree things will be done. Things rarely turn out as well as they could when we don't pay close
attention to the details. Maintain your concentration. You should not do something just because
you "could." Apple is concentrating on a few key products and concepts. They have the ability to
do much more, but they remain focused on their mission. Keep your focus on what you do best
and do it well. Keep an eye on your users. Apple understands its customers. They know exactly
what they want and deliver it. You must also pay attention to your customers. Make the best
hires you can. Apple hires the best, and its products reflect this. They can't be "good enough" or
"ok.”

IX. BIBLIOGRAPHY

Gennaro Cuofano, (May 9, 2022) Apple Mission Statement and Vision Statement In 2022
https://fourweekmba.com/apple-mission-statement-vision-statement/
EDWARD FERGUSON, (February 22, 2019) Apple Inc. Five Forces Analysis (Porter’s Model)
http://panmore.com/apple-inc-five-forces-analysis-porters-model-case-study
(July 21, 2021) Apple Inc.’s Stability, Growth, and Retrenchment Essay
https://ivypanda.com/essays/apple-incs-stability-growth-and-retrenchment/
S.K Gupta, (January 17, 2022) Apple SWOT 2022 | SWOT Analysis of Apple
https://bstrategyhub.com/swot-analysis-of-apple-apple-swot/
John Dudovskiy, (February 18, 2014) Business Turnaround Strategies used in Apple by Tim Cook
https://research-methodology.net/business-turnaround-strategies-used-in-
apple/#:~:text=The%20choice%20of%20turnaround%20strategies,around%20a%20profitable%2
0core%20business