After succeeding Steve Jobs who was the founding CEO of Apple, Tim Cook was given a task of changing Apple. Tim Cook used the Goldman Sachs Technology conference as the platform to highlight Apples operational and business strategy. In 2012, Cooks management prioritized scaling of Apple's operations to cater for increasing global demands. The company also embarked on an intensive expansion of its operations in China through the introduction of Apple TV. The new product form was part of the Apples operation strategy initiated by Tim Cook (Green, 2017). However, regardless of the operational changes introduced, Apple has not recorded a significant success in the market. The companys inability to improve on its market share as it had been projected is an operational concern which has hampered its progress of in the global market.
Sources of the Challenge
Apple Inc. has failed to seize a significant market share in the global market which implies that an organization is struggling in the achievement of its strategic goals. According to Green (2017), shares of Apple have stagnated in the past two years, irrespective of its incredible profits and rapid growing dividends. iPhone, which accounts for Apples bulk revenues is suffering from lurching sales in different quarters. The launching of iPhone 7 and iPhone 8 was unable to solve the operational issues facing Apple. During the same period, it is also revealed that the sales of iPad, as well as Macs, dropped during the third quarter of 2016 fiscal year, leading to 9% decrease in the companys total revenues (Green, 2017). It is imperative for Apples management to find lasting solutions to its operational woes that have hindered the implementation of its strategic vision.
The smartphone market is gradually becoming the PC (Personal computer) market. Kelly (2017) asserts that consumers are less excited regarding the acquisition of new laptops as compared to the same phenomenon, which is experienced in the smartphone market. Analysis of the recent growth rates in the Apples smartphone segment also highlights the worrying trends facing the company. It is demonstrated that Apples revenues from the sales of its iPhone products are recording a minimal change, which has caused concern over the attainment of the set targets (Kelly, 2017). Market analysts asserted that the new generation of Apples PC does not have adequate additional features that can make them to better than the earlier models.
Apparently, similar trends are observed in the companys new models of smartphone products have limited additional features. Apples shortcomings in the establishment of its premium products (Mac and iPhones) has underlined the companys struggles in its pursuit to be a market leader in the electronics and technology industry CITATION Tim17 \l 1033 (Green, 2017). Minimal additional features in the latest iPhones attest that the firm is lacking innovations in its smartphones, thus failing to excite its targeted customers.
Apple is also falling short when it comes to launching products that excite its global clients. The firms introduction of goods such as iPod and iPhone created a significant excitement in the market. Other products such as Apple Watch, Apple TV, and iTunes have also been key to the firms success. For example, the inception of iPads in the market enabled Apple to record the sales of 9 million iPads during the fourth quarter. However. Among Apples product line, iPhone is the top source of the companys revenue (Kelly, 2017). This implies that Apples efforts of seizing the market share from its close rivals such as Microsoft Corporation have been futile. The firm has been unsuccessful in introducing new products that can thrill its customers. Apple Inc. is required to redefine its refinement strategies that will ensure the new models of its products are vibrant and exciting in the market, which is increasingly becoming competitive.
Apple is also facing manufacturing challenges that have hampered its pursuit of becoming a market leader in the electronic and technology industry. The introduction of iPhone 8 was expected to bring critical changes in the companys operations and models. The iPhone 8 was supposed to bring radical redesigning with the aim of introducing the most prestigious item as far as iPhones history is concerned. However, the manufacturing process hit a blip when it was reported that the company was finding it hard to fix the wireless charging on the iPhone 8 (Wuerthele, 2017). The production process of iPhone 8 was also affected by delays in the shipments to various market outlets. Apparently, iPhone 8 depended on OLED panels which are manufactured by Samsung, which was lacking. The production woes stalled the companys redesigning efforts which included the introduction of wireless charging and curved glass back. The production pitfalls surrounding iPhone 8 highlighted Apples diminishing powers when it comes to reliability and effectiveness in the global market.
Stiff competition in the electronic and technology industry is also another source of Apples strategic, operational problems. Microsoft, Samsung, and Google are some of the top players in the market that have hindered Apples chances of dominating the industry thus making it hard for Apple Inc. to gain a better market position. In the smartphone app market, Apple Inc. and Alphabet Company have been accused of undermining healthy competition in the industry. Payment restrictions methods on app developers is a hindrance to the open source policies. Apple s against the utilization of the virtual currencies across different platforms (White, 2016). Such practices violate anti-monopoly laws applied in various countries, ultimately tainting Apples brand in the global market. Corporations such as Microsoft, Nokia, Samsung, Dell, Google, and Hewlett-Packard have become a threat to Apples dominance in the smartphone and PC market (Green, 2017). The recent partnership between Microsoft and Nokia to manufacture premium smartphones is perceived as a direct onslaught on Apples market leadership, ultimately leading to a decline in the companys market share.
Solution to the Operational Problem
Apples primary operational concern is to solve its dwindling success in the global electronic and technology market. Since taking over, Apples CEO Tim Cook has prioritized on the implementation of the companys business strategy which focused on the scaling of its operations and radical expansion of its scope, especially in China through the launching of the new innovative products. The firm has stalled in achieving its strategic goals under Tims management which can be attributed to various challenges the company is experiencing. Apples declining fortunes and deterioration of its position in the global market needs to be addressed. Apple should seek better strategic alternatives that can enhance its operations, to increase its influence in the industry.
Apple Inc. should find an amicable solution to its innovation problems. Apple has faced critical challenges in maintaining the level of enthusiasm that was accustomed to its earlier products such as iPods and iPhones. Apple ought to introduce a new category of its production to complement its smartphone (iPhones) and PC (Macs) sectors. Failure to inject vibrancy and excitement in the market upon launching new products is an indication that Apple Inc. a narrow operational strategy making its net global sales stagnant. This can be attributed to the companys declining levels of creativity which has limited its scope of operation (Smithson, 2017). It is imperative for Apple Inc. to implement innovative operational approaches which advocate for the creation of the company value (wealth) through alteration of the companys outlook and functionality.
Apple should also explore the global middle-class market. Currently, Apple uses premium prices in the valuation of its products. However, this pricing strategy has limited the companys market influence to wealthy customers thus locking out the middle-class clients. Apples strategic team should consider the possibility of manufacturing models which can be purchased different individuals in market irrespective of their economic status (Smithson, 2017). Adoption of this alternative will improve the companys position in the industry. Apple Inc. needs to perform a radical expansion of its global distribution network, which will stimulate the growth in the volume of sales. Apple should utilize its strong brand image to influence and oust its close competitors who are encroaching its market share.
Apples stagnation when it comes to seizing market share in the electronic and technology industry attests the companys shortcomings in its strategic operations. It is an indication that Apple Inc. is underperforming as far as the achievement of its strategic goals is concerned. The management should adopt the outlined recommendations to help the firm overcome its strategic challenges, which have hampered organizations chances of becoming the market leader in the industry.
BIBLIOGRAPHY Bradshaw, T. (2017). Apple faces China challenges despite iPhone resurgence. Financial Times, 1-6. Retrieved from https://www.ft.com/content/474aec32-e82e-11e6-893c-082c54a7f539
Cecerea, G., Corrocherb, N., & Battaglia, R. D. (2014). Innovation and competition in the smartphone industry:Is there a dominant design? Telecommunication Policy , 1-6.
Colvin, G. (2016). Tim Cooks Epic Growth Challenge at Apple. The Fortune Journal, 2-4. Retrieved from http://fortune.com/2016/01/07/tim-cook-apple-growth-challenge/
Green, T. (2017). The 3 Biggest Challenges Facing Apple. Retrieved from https://www.fool.com/investing/2017/01/12/the-3-biggest-challenges-facing-apple.aspx
Kelly, G. (2017). Why Apple's iPhone 8 Has Serious Problems. Forbes , 1-6.
Smithson, N. (2017). Apple Inc. SWOT Analysis & Recommendations. Panmore , 2-6.
White, S. (2016). Japan government advisory panel says Apple, Google hinder app competition. Reuters, 1-6.
Wuerthele, M. (2017). Production of Apple's 'iPhone 8' said to be affected by unspecified Samsung OLED problems. Apple Insider, 2-3. Retrieved from http://appleinsider.com/articles/17/04/25/production-of-apples-iphone-8-said-to-be-affected-by-unspecified-samsung-oled-problems
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