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Executive Summary
Apple Inc. is a multinational company that was first established on 1976 by
Steve Jobs and Steve Wozniak. Its headquarters now stand in Cupertino,
California. It now is the one of the most profitable and valuable companies out
there. Today Apple stands as the giant, but behind this tremendous success
stands its exceptional and rather unique execution of the managerial tasks.
Throughout the report, we have aimed to provide an elaboration of the four
basic pillars of management: planning, organizing, leading, and controlling of
the famous Apple Inc. Planning includes a thorough analysis of the strategic
planning. Throughout the section we have analyzed the current strategies as
well as the process that is being used to achieve them. Additionally, the
distinctive moves and procedures are deconstructed in order to comprehend
the operations that lead to the current global success the firm is experiencing.
Furthermore, a SWOT and Porter analysis are presented and explained.
The organizational section encompasses information on the company's
organizational structure, chart and culture. A discussion will be made on the
past and present CEOs' influence on the corporate culture and the employees
roles on decision-making process, the motivation of employees and Apple Inc.
as a workplace.
In the leading part of the report, all company's leaders are presented along
with each one's different method of leading and directing its subordinates.
And last but not least, the controlling section where the controlling process is
discussed along with Apple's controlling methods.
Table of Contents
1. The Firm......1
2. Planning ....3
2.1.
Current Strategy.3
2.2.
3. Organizing ...........7
3.1.
Organizational Structure......8
3.2.
Organizational Culture.9
4. Leading11
4.1.
4.2.
5. Controlling .....15
5.1.
Control Mechanisms...15
1. The Firm
Technology, in these days, has a major impact on the lives of people worldwide
(Tar, 2013). All modern societies rely on it significantly and the advances that
have occurred in the last decades have changed the way that people live,
react and communicate (Tar, 2013). Apple Company, nowadays Apple Inc.,
has stunned and kept the world under its grasp in the last half of the century,
by changing an industry radically (Linzmayer, 2004). From 1976, when the
company was launched, until now, the technological advances and the
products manufactured, have brought about a new generation of goods and
services on the hands of the general public (Linzmayer, 2004).
Stephen Gary Steve Wozniak and Steven Paul Steve Jobs co-founded the
Apple Company in 1976, when they introduced the first
Apple I computer (Isaacson, 2012). A few years later,
the organization was incorporated, and in 1980 went
public with a value per share of the amount of $22, a
record Initial Public Offering, IPO, since Ford entered the
stock market (Nair and Quay, 2012). Afterwards, in 1984 the
Macintosh computer was introduced, which led the way in the mass business
sector of the graphical client interface (Cusumano, 2008)
Conversely, even though, it was a success, a year later, in 1985, Steve Jobs was
overthrown from the corporation, due to the great cost of the device
(Isaacson, 2012). But, in 1997 he was re-established in his position as CEO and
directed Apple to its forerunner position in the industry of digital devices
(Isaacson, 2012).
Currently, the organization creates and promotes smart cell phones and
devices, personal computers and transferable music players (Apple Inc., 2015).
The main products manufactured are iPhones, iPads, Apple Watches, iMacs
and Apple TVs (Apple Inc., 2015). Moreover, the firm is in charge of the iCloud
service, the iOS and OS X operating systems and many more patents (Apple
Inc., 2015). Furthermore, a range of correlated services, accessories, software
and applications are marketed, as well as, a variety of retail Apple stores
operating worldwide (Apple Inc., 2015). Lastly, it is a California based
2. Planning
Planning, being one of the four primary functions of management, can be
characterized as the ability of a manager to distinguish and select fitting
objectives and courses of action, so as to fulfill them (Jones and George, 2014,
Schermerhorn, 2010). The significance of planning is crucial, it sets the direction
the organizations want to follow, and is the basis where the other managerial
tasks and functions are built upon (Schermerhorn, 2010). The procedure
followed consists of three stages (Jones and George, 2014).
Firstly, is establishing the corporations main objectives, where you strive to form
a competitive advantage. The second stage is evaluating the existing situation
and devising an appropriate strategy based on the goals chosen. Lastly, the
third stage is applying the strategy by allotting capital and duties (Jones and
George, 2014).
to
demand
premium
R&D
margins
and
intensity
lowest
in
this
industry
revenue
growth
Table 1. Indicators of quantum strategy (Loizos, 2013)
Differentiation Realization
Low-Cost Realization
nonconformist
image
of
ingenuity,
patented
ecosystem
Steve
Jobs
demanding,
perfectionist, visionary
Table 2. Differentiation and low-cost strategy realization (Loizos, 2013)
3. Organizing
APOrganizational structures are results of organizing process. They provide a
clear portrayal of responsibilities and roles, relationships and lines of authority.
(Jones and George, 2012) "By reviewing an organizations structure, a manager
will be able to determine which human, financial, and technical resources are
available, how they should be allocated, and which resources are lacking."
(Pathfinder, 2010, p.1).
An unconventional and unique organizational chart with Timothy Cook at its
centre.
Hierarchy:
Product-Based Grouping
The lower tier that consists involves the vice
presidents that deal with product elements
or specific products (Meyer, 2015)
Table 3. Apples Organization Structure (Meyer, 2015)
10
4. Leading
According to Prentice (2004, p. 102), the accomplishment of
a goal through the direction of human assistants is how
leading
is
outlined.
Moreover,
recognizing
and
interests
are
integrated
to
the
corporations
manner they attempt to guide workers and associates (Jones and George,
2015). Consequently, there are three main types of leadership approach (Rauf,
2014, Schermerhorn, 2010). Firstly, there is autocratic, where managers keep
authority and information within their absolute control and act in a command
and control manner, which would be more efficient in a crisis condition (Rauf,
2014, Scermerhorn, 2010). Secondly, the laissez-faire style, represents managers
who let the employees make decisions by themselves without having any
control over them (Rauf, 2014, Schermerhorn, 2010). Lastly, when managers
encourage personnel to contribute in the decision making process and assist
them acquire knowledge and know-how, they are considered democratic
(Schermerhorn, 2010).
department, the last two approaches could be more beneficial (Rauf, 2014).
11
Assessment
Support
Myers-Briggs
ENTJ
Type
(extraversion,
Indicator
intuition,
thinking,
judgment)
12
Contingency
Leader
Regularly
Model
evaluated
employee
task
progress
Struck deals to achieve task-oriented
goals
Leadership
Authority-
Grid
Compliance
Autocratic
Contingency
Model
Tuckmans
Adept
Group
forming,
every
component
of
Development storming,
Model
norming,
performing,
worked together
and
adjourning
Trait Theory
Independent
thinker,
courageous,
motivator,
proactive
13
14
5. Controlling
The controlling function of management is the most important because here
you see the results of the three afore mentioned functions: planning, organizing
and leading. In the controlling process, managers keep a close eye on people
and their performance of the job, and then assemble and interpret the
information and make any corrective changes that need to be made. Nothing
is guaranteed to go as planned, so plans must be adjusted and improved to
ensure future success. (Schermerhorn, 2010).
5.1.
Controlling Mechanisms
On the third step, they make a comparison of the current performance and
execution of the goals opposed to the criteria (Jones and George, 2015,
Schermerhorn, 2010). If the outcome is positive managers may change the
assessment criteria making them more adaptable to more challenging
situations. Moreover, a bonus may be given to celebrate the successfulness of
the endeavors (Jones and George, 2015). However, if the performance does
15
16
17
7. References
Apple Inc. (2015). Form 10-K. Annual Report. [online] Washington, DC. United
States Securities and Exchange Commission, pp.1-85. Available from:
http://www.edgar-online.com [Accessed 1st January 2016].
Aschroft, J. (2012). Apple from the iPod to the iPad: A Case Study in Corporate
Strategy. 2nd edition [ebook] Manchester, pp. 5-23. Available from:
http://www.johnashcroft.co.uk/wp-content/uploads/2012/06/AppleFrom-the-iPod-to-the-iPad-Case-study-2012.pdf
Biddle, S. (2014). Apple Sounds Like a Terrible Place to Work. [online]
Valleywag.gawker.com.
Available
from:
http://valleywag.gawker.
com/apple-sounds-like-a-terrible-place-to-work-1520812217
[Accessed
[Accessed
1st
January 2016].
Dudovskiy, J. (2015). Apple Porter's Five Forces. [online] Research Methodology.
Available at: http://research-methodology.net/apple-porters-five-forcesanalysis/ [Accessed 1st January 2016].
Ferguson, E. (2015). Apple Inc. Five Forces Analysis (Porters Model) - Panmore
Institute.
[online]
Panmore
Institute.
Available
from:
18
[online]
Strategicmanagementinsight.com.
Available
from:
Available
from:
http://www.investopedia.com/articles
Institute.
[online]
Panmore
Institute.
Available
from:
19
[online]
Panmore
Institute.
Available
from:
http://panmore.com/apple-mission-statement-vision-statement
[Accessed 1 January 2016].
Rowland, C. (2015). Apple Inc. Operations Management: 10 Decisions,
Productivity - Panmore Institute. [online] Panmore Institute. Available from:
http://panmore.com/apple-inc-operations-management-10-decisionsareas-productivity [Accessed 1st January 2016].
Schermerhorn, J. (2010). Introduction to management. 10th edition. New York,
John Wiley & Sons.
Smithson, N. (2015). Apple Inc. SWOT Analysis & Recommendations - Panmore
Institute. [online] Panmore Institute. Available from: http://panmore.com/
apple-inc-swot-analysis-recommendations [Accessed 1st January 2016].
Smyth, W. (2014). Tim Cook Coming Into His Own. [online] Mobilitydigest.com.
Available from: http://mobilitydigest.com/tim-cook-coming-into-his-own/
[Accessed 1st January 2016].
Tar, A. (2013). Apple Inc. SWOT Analysis. 1st edition. [ebook] Munich, GRIN
Verlag, pp.1. Available from: http://www.grin.com/en/e-book/215816/
apple-swot- analysis [Accessed 1st January 2016].
Thompson, A. (2015). Apple Inc. Stakeholders: A CSR Analysis - Panmore
Institute.
[online]
Panmore
Institute.
Available
from:
20
from:
http://www.ukessays.com/essays/business/motivation-
and-rewards-of-apple-inc-business-essay.php
[Accessed
1st
January
2016].
WordPress.com (2011). An Illustrated History of Apple. [image] Available from:
https://flatworldbusiness.wordpress.com/flat-education/intensify/
creating-a-flat-business/case-apple-inc/ [Accessed 1st January 2016].
WordPress.com,
(2013).
Motivation.
[online]
Available
from:
21
8. Appendices
Appendix 1. SWOT Analysis Apple Inc.
After having decided on the future goals and missions, the next step in the
strategic management process would be to examine the organization and its
environment using SWOT analysis, which serves as a tool to determine the right
strategy a company should follow by setting forth its internal strengths and
weaknesses along with external opportunities and threats. (Schermerhorn,
2012).
SWOT ANALYSIS
Strengths (Internal)
-Strong
Weaknesses (Internal)
brand image
-High prices
-Marketing
and
advertising
capability
market
Opportunities (External)
-Aggressive competition
-Imitation
22
Threats (External)
smart-phones
-Creation of new product lines
Internal Strengths
Internal Strengths represent the company's strongest pillars. (Jones and
George, 2012). One of many valuable asset of Apple is its brand image. This
SWOT analysis depicts that is able to extract profit by way of its brand image.
Furthermore, Apple's pricing strategy allows it to gain a significantly great profits
because it enables flexibility for price adjustment ( See profit margins below).
Innovation is a great strength of Apple too, because it enables it to gain a
competitive advantage towards its competitors and always be on the cuttingedge(Smithson, 2015). Apple, in addition, is one of the most profitable
companies in the world, having a total revenue of $39.5 billion in 2014, 6.7%
more than the previous year (Kell, 2015). Its exceptional marketing and
advertising capabilities contribute to the overall brand awareness (Jurevicious,
2016).
2012
2013
Change
2014
Change
2015
Change
from
from
from
2012
2014
2014
Apple
1.1
10%
1.2
9.1%
1.8
50%
Samsung
4.3
3.8
(11.6)%
3.6
(5.7)%
1.6
2.6
38.5%
2.3
(11.5)%
17.8%
Amazon.com 2
2.4
20%
3.3
37.5
1.9
2.4
20%
Electronics
Microsoft
Apple invested only 0.77% of its total revenues on advertising in this context and
brings back a higher revenue than its competitors. This depicts not only the
Apple's capabilities in marketing, but also shows that Apple spends its money
more effectively than its competitors, and get greater in return not only in the
23
Internal Weaknesses
Internal weaknesses are the ones that hold back a company from performing
well and need to be addressed (Meyer, 2015)
One of its inadequacies is closely linked to an aspect of its organizational
culture that is secrecy. Apple scrupulously chooses its sellers of its merchandise.
This enables control over distribution, but confines its market reach. Apple is
known for its high prices. This confines most people to buy the product and the
large majority of the market belongs to the lower classes. This may increase the
need for substitutes (Meyer, 2015).
Therefore, according to the analysis, the high prices and limitations on
distribution may impose restrictions in the business (Meyer, 2015)
External Opportunities
The external opportunities section addresses the opportunities that the
company can choose to exploit. These opportunities affect strategic route of
a corporation. Apple can exploit the opportunity to enlarging its distribution
network, which would effectively address the company's weakness in this point
and enable it to reach a larger number of customers. Also, Apple could get
into new product lines, as they have done with the Apple Watch (Meyer, 2015).
Furthermore, they could start producing Apple TV and Apple car. These two
new products are pose great opportunity and have potential to happen, but
not without their challenges. The television industry is facing great consumer
dissatisfaction due to online streaming, cable packages, etc. But could Apple
come up with a breakthrough and solution here too? Also the expenses and
engineering challenge make getting into automobile industry a bit risky (Yoffie
and Baldwin, 2015)
External Threats
24
25
Advantages
&
Disadvantages
of
Apples
Organizational Structure
Strong Control. The hierarchy in Apples organizational structure supports strong
control over the organization. Theoretically, hierarchy empowers top leaders
like Tim Cook to control everything that goes on in the organization. Through
the hierarchy, function-based grouping and product-based grouping in this
organizational structure, Apple ensures that Cook and the senior VPs control all
organizational processes. (Meyer, 2015)
Limited Flexibility. Apples organizational structure has the downside of low
flexibility. Hierarchy typically prevents lower levels of the structure to flexibly
respond to business needs and market demands. However, Tim Cook has
already made slight improvements by increasing collaboration among
different parts of the firm. Still, Apples organizational structure does not support
rapid changes because everything must go through Tim Cook and the senior
VPs. (Meyer, 2015)
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27
28
29
30
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