Tag: Apple

Apple

Apple Company International Law Globalization

International Law and Globalization

Apple Company is a US base incorporation incorporated in the US in the year 1976 by Steve jobs. Ever since then Apple Company has witnessed huge milestones in its production, distribution, and marketing of its electronic device majorly the apple phones (Johnson, Phan, Singer & Trinh, 2012). Currently, Apple Company is one of the largest us based companies listed on the stock exchange contributing significantly to the US GDP. Its forms one of the largest multinational companies offering the highest job opportunities both locally and internationally. The company has offered more than 60,000 jobs globally for both full time and part time.

International roles of Apple Company

Customarily, business is expected to deliver or play some roles in the economy. Some of the roles may be economical or social functions.  Companies are to structure their overall operation to ensure that the end product of it all defines their contribution to the international business globally. Consequently, Apple Company is not an exceptions or immune to this role. It has to ensure that its functions in the international business by involving herself in various activities that benefit the global trade through its interplay with various economic factors. The discussed under are some of the roles of Apple Company in the international business.

Export promotion. Apple Company has expanded exports to many countries in which it has established its production processes.  The apple come has established its production in many countries especially those countries from Asia. The key player comes from Irish and China. Reports and researches assessing the contribution of this on exports of these countries are astounding. It indicates that, for instance, China has mostly benefited from exports of apple products contributing to at least 8% on China’s GDP.

The same spill overs have passed on to other countries in which Apple have established its main production activities. This forms one of the primary roles of the company to support the trade activities of those countries in which they are operating in. In this way, Apple Company has played a major role in international business through export promotion.

Job creation. Apple Company is one of the largest giant multinational companies which have massively created thousands of job opportunities. Apple Company has over 700 production operations across the world. Statistics shows that the company has offered over 60,000 job opportunities globally either directly and indirectly. These jobs are provided either through their factory outlets or through their middlemen and intermediaries who are strategically situated in the various countries.

Revenue creation. Apple Company has largely contributed revenue generation of many countries. When companies operate in the international arena, they are subject to tax payment and other reparation laws which ensure that a certain percentage of revenues generated in those countries are retained and locally promote local activities. Apple has paid millions of taxes to these countries which have helped local people to enhance their lives through productive activities. (Hutt 2017)

Cultivation and promotion of innovation. This is one of the key roles they the company has played in the international business. When it comes to innovation, Apple Company stands conspicuous from the rest of other electronic or mobile phones producers. The company has the culture of developing and promoting innovations throughout its production process. This has led the company to win many global trophies as a leader of global innovation. Studies indicated that the company is strategically studying the markets niche and satisfactory innovating products which satisfy those needs.  This innovation is not constrained in their key factory outlets, but it has diffused globally contributing to more innovation into the global business.

Enhance improvement in global supply chains. Apple Company has come up with one of the best supply chains in their marketing strategies. Customary, Apple Company does outsource their raw materials from many countries outside us. This means that they need to have proper supply and delivery channel that ensures that raw material is moved on time to production sites.

In the same way, such channels should ensure that products are moved and delivered to customers on time. In facts, Apple boost of the most efficient supply channels in the international business which other companies globally have adapted to in their supply chains.

Environmental protection role. Apple has had significant role in the international business environment. The company has come up with major policies that ensure the sustainability of the environment. This has involved low carbon emission policies that have ensured the company uses low carbon means like solar power plant to run their factories.

Effects of international laws on apple company operation

Globalization comes with the internationalization of business. Consequently, when businesses start trading internationally, they operate in different countries with varying jurisdiction and laws. In this way they are to ensure that they abide by those laws fully and in case they violate them, they are prosecuted, and sometimes their operations are shutdown. International laws have the ability to promote or totally dismantle business operations of a company which violates them. The discussed below are some of the effects of international laws effects on the operation of the apple company (Chan, Pun, & Selden, 2013).

International Taxation laws and effects on Apple performance. In the year 2016, the European Court ordered Apple Company to pay close to $14.5billion of tax the penalty to Irish government (Hunt 2017) The court held that the Irish government violated international tax law by meddling tax laws to favour Apple Company which resulted to the company pay less tax to Irish government (Heckemeyer & Overesch, 2013).

Also, the court ruled that Apple Company had not paid the entire required tax amount and other revenues from sales they had made in 20-14 and 2003. Such tax laws are just reducing the Apple’s operations in the international business as it has ended up suffering one of the largest financial losses ever. International tax laws have the ability to limit Apple operating activities. Apple has had in past major corrosive effects that resulted from tax avoidance in the United States.

This leads the company to pay in millions of money as the Senate ruling indicated that the company had strategically formulated strategies that they use to avoid tax. This too has affected the profitability margin of Apple Company. Responding to the Europeans Commission ruling in taxes, the chief executive officer of Apple Company warned that were likely to reduce their operations in Ireland risking over 1.5 million jobs in entire Europe. The effects of such international laws are simply just to reduce business operations.

Apple Company International Law
Apple Company International Law

International labour laws and the effects on Apple Company business. These are laws that are internationally accepted by all countries and which ensures employees’ rights are protected, and their work environment is safe. Occasionally, Apple Company has found itself in conflict with such laws when engaging with employees. In the year 2012, apple industry outlet located in China, Foxconn, was reported to have engaged minors as workers (Duhigg & Barboza 2012).

The company employed children and students in their factories which are against international labor laws. Several other employee cases have been lodged in the courts on claims of proper working conditions as well as employees being forced to work overtime. Violation of such international laws directly damages the reputation of a giant company like Apple (Sandoval 2013).

In 2014, Apple, Google, and Intel were fined $324 million in laws suits. Frequent labor laws have negative effects of damaging Apple reputation and stakeholders too. Regular penalties only have hindering effects on the performance of the Apple Company (Hunt 2017).

Approaches to global politics – Realistic approach

The approach is based on the premise that each country is seen to be in fight for its position in global arena while each is advancing its interests. In this way, a country will consequently reign supremacy over its borders and population. The states are seen as seemingly guarded against invertible threats against the freedom of its people and encroachment of potential threats on its borders (Gilpin 2011).

Under this approach, the attainment of economics, as well as the mobilization of economic power, is viewed as marshalling power over its borders. The main facets of realism include mercantilism, ethno nationalism, colonialism, and neo-colonialism. Colonialism is viewed as a major precursor to globalization while mercantilism is the smooth approach that promotes establishment of industries through subsidizing them and protecting them from international competition (Gilpin 2011).

Mercantilists advocates for free trade to enhance the realization of an end to political struggle. Realists presume of an international state structure as progressively more revolutionary, and they assume that all countries work in attaining their parochial interest. The approach characterizes international politics as being power centered focusing on power balance, and eventually, that war is unavoidable in the international states system (Baylis, Smith & Owens, 2013).  The main advantage of realism is that it prioritized state political supremacy over an individual and that state should be the key player

Liberalism approach

Primarily, the liberalism approach to global politics seeks spreading of democratic as well as economic power to necessities the true picture of globalization. The approach also advocates for an economic path for a true realization of one economic and cultural global political order. Liberals fall out that a great room exists for collaboration and gain for all countries in international state politics. Also, liberalism unmoving believes that countries can still work from mutual benefits and avoid international politics (Baylis, Smith & Owens, 2013).

Liberalism can be traced about 200 hundred years ago to economic philosophers Adam Smith and David Ricardo. Liberalism has thrived in fame in the aftermath of World War 1 and world war 11. Even though limits have resulted in the incapability of liberalism to put up with the fruit that it so dynamically argued. Liberals’ mainly important role is based on the notion asserting that all accomplices in an organization of free trade markets are beneficiary (Baylis, Smith & Owens, 2013).

 The main advantage of liberal is the advocacy of free trade in international political arena. They argue that little political restriction will automatically cause the trading parties to gain mutually. The second aspect here is that realism advocate and strongly prefers an individual to state politics. In global world, protectionism is necessary; this forms one as the major advantage of liberal as it vehemently fights against protectionism.

Use of globalization at Apple Company

Global outsourcing. Apple has applied outsourcing significantly to enhance its production. The company has its head office in the United States which is a nonmanufacturing office. Productions are located in Europe and Asia. The company does outsource it critical production raw, materials from many countries to their assembling plant globally. This is one of the key utilization of globalization by the apple company. Employees and innovators have also been outsourced globally as a result of globalization in trade laws and practices. Aided by globalization, Apple Company has been able to cut the high cost of production in the United States by strategically setting their operations in countries where production cost is low (Borrus & Zysman, 1997).

Apple has used the effects of globalization to establish one of the best online retail shops. Their customers can purchase company’s product all over the world with no limitation to geographical distance and be delivered to them on time. These online stores and websites can be translated into different languages for everybody who wishes to transact with the company.

The company has also structured its production process to move in line with globalization. The supply chains and value chains developed have been used to ensure that The Company remains competitive in global market. Globalization has also been used to do market segmentation and various market strategies by Apple Company. Through globalization, Apple Company can easily now segment international market for profitable returns and consistently shy away from those markets with low profits or markets which are risky.

Conclusion

It is clear crystal that Apple Company has grown over the years to be one of the world’s giants businesses globally. The company has set up its operational internationally in many strategic countries. By going international, Apple Company has been forced to operate within international trade laws which prescribed the nature of and ways in which accompany ought to conduct business at international levels. Such laws which have affected apples international business include tax laws, labor rational laws as well environmental laws. The major roles of Apple Company in international business include export promotion, job creation, and revenue generation among many others. Strategically, Apple Company has been affected by global business in areas such as outsourcing, redesign of supply chains, and establishment of online business among many others.

References

Baylis, J., Smith, S. and Owens, P., 2013. The globalization of world politics: an introduction to international relations. Oxford University Press.

Gilpin, R., 2011. Global political economy: Understanding the international economic order. Princeton University Press.

Sandoval, M., 2013. Foxconned Labour as the Dark Side of the Information Age: Working Conditions at Apple’s Contract Manufacturers in China.

Johnson, K., Li, Y., Phan, H., Singer, J. and Trinh, H., 2012. The Innovative Success that is Apple, Inc.

Duhigg, C. and Barboza, D., 2012. In China, human costs are built into an iPad. New York Times, 25.

Linden, G., Dedrick, J. and Kraemer, K.L., 2011. Innovation and job creation in a global economy: the case of Apple’s iPod. Journal of International Commerce and Economics, 3(1), pp.223-239.

Licht, Tine R., Max Hansen, Anders Bergström, Morten Poulsen, Britta N. Krath, Jaroslaw Markowski, Lars O. Dragsted, and Andrea Wilcks. “Effects of apples and specific apple components on the cecal environment of conventional rats: role of apple pectin.” BMC microbiology 10, no. 1 (2010): 13.

Heckemeyer, J. and Overesch, M., 2013. Multinationals’ profit response to tax differentials: Effect size and shifting channels.

Smith, J., 2012. The GDP illusion: value added versus value capture. Monthly Review, 64(3), p.86.

Chan, J., Pun, N. and Selden, M., 2013. The politics of global production: Apple, Foxconn and China’s new working class. New Technology, Work and Employment, 28(2), pp.100-115.

Borrus, M. and Zysman, J., 1997. Globalization with borders: The rise of Wintelism as the future of global competition. Industry and innovation, 4(2), pp.141-166.

Hunt, Elle. “Apple Paid No Tax In New Zealand For At Least A Decade, Reports Say”. The Guardian. N.p., 2017. Web. 29 Mar. 2017.

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Did you find any useful knowledge relating to international law and how it affects Apple in this post? What are the key facts that grabbed your attention? Let us know in the comments. Thank you.

Organizational Culture

Management of Organizational Culture and Structure In Pursuit Of Generics Business Strategy – A Case Study of Apple

Organizational Culture and Strategic management is concerned with the activities of various domain of the organization, which encompasses the creation and management of business strategy, values, and various organizational constitutions. Through proper management of strategy, firms are able to translate its vision and sustain a competitive positioning in the industry. Therefore, strategic management involves the dedication of organizational resources to meet its various challenges associated with its internal and external environment.

With a vision to make great products, Apple Inc. represents one of the most successful organizations in these days. Apple has revolutionized personal computer, computer software and mobile and portable device market through integrating innovation with design and functionality to bring performance and sophisticated user experience and has manifested itself as the most notable iconic designer in the consumer electronic market. Apple has achieved numerous awards for its innovation and design and was Fortune Magazine’s most admirable company several times. Due to this outstanding achievement in innovation and creativity, Apple has become one of the most valuable company with a market value equivalent to US$623 billion by the year 2012 (Heracleous, 2013).

The aim of the current study is to determine what business strategy the organization has adopted in order to achieve this rank and to assess the implications of its business strategy with its corporate culture and structure. The research will also investigate the effects of organizational structure on its communication and decision making processes.

Review of Relevant Literature

Generic Business Strategy

Firms’ profitability depends upon industry structure and the firms’ competitive positioning within the industry. Professor Michel Porter (1985) devised two theories to explain firms’ profitability–i) five forces theory to determine the industry structure or attractiveness and ii) a generic competitive strategy to determine firms’ positioning within the industry. Porter (1985) distinguished three successful generic strategies to outperform competitors in an industry: overall cost leadership, differentiation, and focus.

Overall cost leadership: According to Porter (1985), if a firm can achieve a sustainable cost leadership, it will perform above average in the industry, assuming that the firm has the ability to command an industry average price. In order to achieve an overall cost leadership, firms need to adopt a number of low cost production strategies, such as cheap suppliers, special R&D efforts, appropriate inventory management, enhanced distribution channels, reduced advertising and promotional costs, etc. (Porter, 1985).

Differentiation: Through differentiation, firms create products and services with special values to the customers and position themselves uniquely in the industry. Through successful differentiation, technology firms can gain customers’ loyalty and can command a premium price for the products (Porter, 1985).

Differentiation strategy is peculiar to the industry type and structure, and based on this peculiarity, firms can undertake a product differentiation strategy (such as new features, enhanced values, etc.), a marketing differentiation strategy (such as launching special campaign to target particular class of buyers from a mass market), etc. or a combination of both. Through differentiation strategy, firms can mostly target price insensitive buyers. However, differentiated products are vulnerable to low cost competitors offering similar products. So in order to make differentiation sustainable, strong R&D outcomes, innovation, and creativity are tied with the products so that it becomes difficult to emulate by the competitors (Porter, 1985).

Focus: Focus strategy allows firms to narrow the competitive scope to gain advantages. In this strategy, firms select a segment of the industry that can facilitate them to pursue either a low cost strategy or a differentiation strategy. The selection of one of these strategies solely depends upon the nature of the customers in relation to the product within the segment (Porter, 1985).

Organizational Culture
Organizational Culture

Organizational Culture

Organizational culture can be defined as a set of value, assumption, beliefs, artifacts, rituals, and ceremonies that help organizations to accomplish various goals and to coordinate with internal and external environment (Schein, 2010). Deshpande and Farley (1999) recognized four types of corporate culture: consensual, entrepreneurial, bureaucratic, and competitive. This classification of culture is very similar to the widely accepted classification of organizational culture described by Cameron & Quinn (2006): hierarchy culture, clan culture, market culture, and adhocracy culture.

The hierarchy (or bureaucratic) culture: German sociologist Max Weber found seven attributes in bureaucracy culture in government organizations–rules, specialization, meritocracy, hierarchy, separate ownership, impersonality, accountability (Cameron & Quinn, 2006). Cameron & Quinn (2006) determined hierarchy organization as a formalized and structured place to work leading to stable, efficient, highly consistent products and services. Hence, organizations that require efficient, reliable, smooth-flowing and predictable output seem to adopt this culture. Other principle characteristic of hierarchy culture are– clear lines of decision making authority; standardized rules and procedures; and strong control and accountability (Cameron & Quinn, 2006).

The clan culture: The typical values of clan culture are shared goals, cohesion, participation, individuality, and a sense of togetherness. This type of organization is largely managed through employee empowerment, employee commitment, and loyalty. In a clan organization, customers are treated as partners (Cameron & Quinn, 2006).

The market culture: Market culture is the typical to an organization that functions as a market. The foundation of market culture is the strong emphasis on various external constituencies, such as suppliers, customers, contractors, and other market regulators to achieve competitiveness and productivity (Cameron & Quinn, 2006). In a market culture, organizational effectiveness is determined by transaction costs, i.e., exchanges, sales, and contracts, and other market dynamics, instead of internally defined rules and controls. The core values of a market culture oriented organization are competitiveness and productivity which are opposed to the complacent, hierarchy and arrogance observed in a hierarchy organization.

The adhocracy culture: Adhocracy culture represents an organizational culture that is typical to the modern high-tech firms where the organizations have to face the ever challenging and ever changing landscape. The assumption in an adhocracy culture is that the innovation and entrepreneurial initiative is the central to the organizational success or profitability, and the organizational activities are product and service oriented. The organizational configuration is temporary and takes the shape around project and product based structure such as teams, taskforce and committee.

The major characteristics of the adhocracy culture are the absence of organizational chart, lack of centralized power and authority relationship, temporary role of employees, creativity, and innovation. Leadership applied to the adhocracy culture is visionary, innovative and risk oriented, and the power flows from person to person on the need basis.

Formal Organizational Structure

Organizational structure can be determined through both formal and informal contexts. While informal organizational structure relates the social structure of the organization, such as culture, behaviors, interactions and social connections within the organizational context, formal structure can be understood as the abstract form of structure that is comprehended more easily through management structure, hierarchical relationship, leadership type, etc. (Meyer & Rowan, 1977 ).

As organizational structure determines the relationship within various elements of an organization, it has profound impact on the behavior of employees, various organizational units, and the whole organization (DeCanio, Dibble & Amir-Atefi, 2000). Dissanayake & Takahashi (2006) recognized that the development of organizational structure is typically the result of two constructs–i) a “system organization” which is formed through the sharing of perception of their actors and ii) a “structural configuration” based on the first one. Csaszar (2012) noted that organizational structure can be conceptualized as the decision making structure among the people within the organization and argued that this structure substantially affect different initiative taken by the organization.

Chen (2006) noted four different types of leadership style, such as transactional, charismatic, transformational, and servant, and then identified interrelationship between the leadership style and organizational structure. Mintzberg (1989) demonstrated seven forms of organization in the effort to demonstrate organizational structure: entrepreneurial, machine, diversified, professional, innovative, missionary, and political organization.

Research Methodology

The aim of the current research is to assess the business strategy, organizational structure, and culture of Apple Inc. The research evaluated Apple’s business strategy through Porter’s theory of generic business strategy and investigated various cultural elements through the cultural classification (Section 2.2) of Cameron & Quinn (2006). The structural aspects of the organization were analyzed on the light of generally perceived organizational constructs and conventional leadership concepts. Due to the nature of theoretical implications with the research, a qualitative research approach in the form of case study was adopted, which fulfilled the purpose of the research as well as revealed important insights on the subject.

The method of investigation was both descriptive and explanatory (Baxter & Jack, 2008). An explanatory approach was adopted on contextual investigations, where a descriptive approach was taken to document facts and figures (Yin, 2003). Data used in the research was secondary in nature that comprises of case studies, peer reviewed journals, and blog articles collected through internet research.

Results and Discussion

Apple’s Generic Business Strategy

Porter (1985) demonstrated that an organization will be able to sustain profits and perform above average if it adopts a differentiation strategy that can incorporate substantial values for what users are willing to pay a premium price. Apple successfully integrated differentiation strategy through serial innovation with its various product lines (Heracleous, 2013). The organization can successfully command a premium price which is the principle sources of revenue growth, highest profit margin, and substantial market share.

Apple’s Mac computer was the onset of the masterful combination of innovation and design in hardware and software in computer industry. Mac particularly targeted K-12 education, graphic artists, and high-end users, which is a unique indictor to differentiation (Gamble & Marino, 2011). Mac was unique from other computers, and the added values were realized by customer classes who were willing to pay high. The campaign that the Mac computers are immune (relatively) to viruses also attracted creative workers who need a very stable and consistent work environment (Bhatnagar, Gupta & Chauhan, 2012).

The most notable differentiation strategy of Apple’s iPhone was its 3.5 inch scratch resistance gorilla glass display–a unique attribute that carry substantial value for the product (Mickalowski, Mickelson & Keltgen, 2008). But this is one of the many features that the product offered, including the ease of use, simplicity, faster performance, and overall users’ experience.

Apple implemented differentiation in iPad through, among others, incorporating attractive design, introducing its own line of applications, and a built-in App store. Apple introduced focused differentiation by introducing sleeker and lighter second generation iPad. Apple added more value to the third generation iPad through incorporating processing speed. In both cases, Apple targeted high-end customers who are willing to buy the new products with extra price for its added value. Brand image, customer loyalty, etc. served to quickly reach differentiated products to the customers. Mac also gained a boost in sale after the success of iPad and iPhone, which indicates the effect of image and customer loyalty significantly created opportunity for Apple (Porter, 1985; Gamble & Marino, 2011).

Strategic route in differentiation: In order to successfully differentiate a product, firms may adopt extra means, such as outsourcing and strategic partnership (Porter, 1985; Hill & Jones, 2011). Apple successfully utilized both in its operation, for example, conducting high value added functions in California and outsourcing manufacturing activities to the cheapest locations (Heracleous, 2013).

Strategic partnership of Apple with AT&T helped the organization distribute their iPhone quickly first time to the US market (Yoffie & Kim, 2011). Apple also was able to command cost substantially over other players. When Apple launched its first iPhone, the major rival Nokia was selling their N95 at $749 in the US market (Mickalowski, Mickelson & Keltgen, 2008).

Apple’s differentiation strategy in marketing and sells: Porter (1985) argued that organizations can adopt more than one differentiation strategy to successfully pursue the strategy. Apart from great innovation and product design, Apple incorporated differentiation in its marketing strategy. Apple seems to create all sort of marketing buzz and creative marketing ploy before product launch, which adds substantially to the product success (Anderson et al., 2013).

Apple dedicates substantial resources and multiple subsidiaries in marketing and sells. Each retail points are organized with trained employees. In the retail outlets, customers have the opportunity to test and experiment with the products (Wooten, 2010). Apple indeed trained employees to interact creative ways to teach customers about the product, such as through one-on-one or workshop training, so that the customers can enjoy the best buying experience (Wooten, 2010).

The Nature of Apple’s Corporate Culture

Apple has a highly unique organizational culture that serves its vision and innovation. The principle characteristics of Apple’s organizational culture are–innovation, confidentiality, compliance, and self-responsibility.

An innovative culture: Innovation is the cornerstone of a successful differentiation strategy. Apple’s CEO Steve Jobs created an innovative culture that sustains enthusiasm and hard work (Anderson et al., 2013). Jobs and his leadership team put substantial efforts to recruit employees and socialize employees into its innovative culture (Wooten, 2010). The most emphasis Jobs would give was on intelligence and passion. To cultivate true entrepreneurship and innovation, Jobs established “Apple University” that teaches employees the fundamentals of Apple’s corporate DNA and creative culture.

A secretive culture: According to Porter (1985), an organization’s differentiation strategy will be sustainable if the product cannot be easily imitated. In today’s competitive landscape, corporate information is vulnerable to leakage and exploitation. Apple maintains a very secretive culture to protect its intellectual property. Each project or product development initiative takes a team-based structure, where teams work individually, tasks are micromanaged, and one unit is physically separated from other units (Anderson et al., 2013). Apple does not encourage people to discuss projects and share ideas. Instead, ideas are directly incorporated within the products. Team coordinates under the direction of CEO or top executives and on the need basis (Anderson et al., 2013). Despite this secretive nature of the organization, Apple has been able to manage seamless co-ordination of projects through clear direction, self-accountability, and constant feedback.

A culture of responsibility: Another feature of Apple culture is a strong sense of self-responsibility. Jobs would instill responsibility through clear and directive instruction to demonstrate employees’ positions and tasks. The term DRI is an integrated jargon in Apple’s culture which points to the “Directly Responsible Individual”, particularly at the executive level, for various agendas (Barry M. P., 2013).

Employee motivation: The employee perks in Apple are not similar to that of other high-tech companies, and in this regard, employee motivation comes from other sources, which is the product itself. Despite being a big multinational company, employees’ salaries in Apple are not better than the other places (Anderson et al., 2013). Apple believes that a great product development opportunity will retain people who are motivated (Anderson et al., 2013). So, Apple sustains a culture with people having some kind of passion for the organization. Nonetheless, employees are able to choose a customizable benefit package to suit their individual needs under the program called FlexBenefits (Anderson et al., 2013).

Apple’s Formal Organizational Structure

The structure has profound impact on an organizational management. Apple has a very unique and flat organizational structure. Before returning of Jobs in Apple (in 1997), the organization maintained a large number of middle managers. Jobs fired 4000 middle managers and rebuilt a flat structure composed of only the executive team and vice presidents. The executive team would directly pass Jobs decisions onto the employees (Anderson et al., 2013). This would facilitate direct and more personal level interactions. This flat organizational structure and considerable authority to the executive team successfully managed a large organization with approximately 60,000 full time employees along with 364 retail outlets situated in fifteen countries (Anon, n. d.).

Organizational Communication and Decision Making in Apple

Organizational communication and decision making is very unique in Apple. Apple’s flat organizational structure typically serves to reduce the layers of bureaucracy and creates a fast paced and collaborative environment (Sawayda, 2011; Anderson et al., 2013).

Before Jobs’ returning to Apple, the projects were discussed openly. Jobs created a patchy, segmented and team-based structure where team interactions were absent. Despite this secretive nature in its culture, the flat organizational structure increases communication and faster implementation of decisions (Heracleous, 2013). The co-ordination is done on need basis with the direct supervision of CEO and the executive team (Anderson et al., 2013).

Apple conducts a series of weekly meetings, which is the central strength of its organizational communication. The purpose of the meetings is to bring clarity, unity, and simplicity of the message, keep everyone at the same page, and to set the right tone for its upcoming journey (Barry, 2013).

Decision making at Apple is very unique and unusual. During the time of Steve Jobs, most decision would come from Jobs without any analysis, focus group or thorough consultations (Morrison, 2009). This style of decision making imply the fact of authoritative rather than autocratic, which was one of the Jobs leadership skills who had exceptional ability to provide clear and powerful message (Chaffin, n. d.). In many cases, Jobs would directly interact with the employees.

Conclusion

In the core of Apple’s success, there remains innovation, performance, and reliability, where a combination of differentiation in product design, marketing and customer services has been adopted. Apparently, two most important factors driving these successes–Jobs’ leadership skills, and the right set of people. Organizations’ culture and structure have profound impacts on people and their behavior, which is important for the success of any business strategy. The successful composition of various structural and cultural components in organizations is achieved through appropriate directions and a competent leadership. The paper discussed how leadership of Jobs applied to simplify the organizational structure and processes, such as to enhance communication and decision making.

From the study of this paper, it can be concluded that the organizational culture of Apple is that of adhocracy category where all challenges and tasks circle around the product success. This product oriented culture can be attributed to the reflection of Jobs’ leadership vision to make great products that customers will fall in love with, which is a significant proposition for its differentiation strategy. Jobs successfully diffused his passion and motivation in Apple’s culture and instilled accountability, self-responsibility, innovation, and creativity. To sustain innovation and entrepreneurship, which is the central to an adhocracy culture, Jobs surrounded his workplace with creative people through recruiting right talent and rewarding the creativity.

Adhocracy organizations lack of centralized power and authority relationship, which may apparently seem contradictory in Apple’s case. However, it is notable that Jobs reduced the bureaucracy of the organization to support a more flattened organization where authority can do more interactions on the need basis. Jobs’ visionary, innovative and risk-oriented leadership style is the perfect match to that of an adhocracy organization culture. Apple’s project or product based business units and team oriented structure also reflect the nature of the adhocracy culture.

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Smartphone Market Apple

Apple’s Position in the United States Smartphone Market

The smartphone market in the United States is comprised of all firms that manufacture and sell smartphone’s specifically to U.S. consumers. According to Cromar (2010. p 4.), a smartphone is a mobile phone which is run on an advanced operating system. The operating system makes a smartphone to have advanced computing capabilities such as installing of new applications and can connect to the internet.

There are five major players in the U.S. smartphone market. They include:

  1. Apple Inc. (a U.S. corporation)
  2. Research in Motion Limited (a Canadian corporation)
  3. HTC Corporation (a Taiwanese corporation)
  4. Motorola Inc. (a U.S. corporation)
  5. Samsung Electronics (a subsidiary of a Korean corporation)

This article will mainly focus on Apple’s presence in the smartphone market.

Apple’s Market Share

According to new statistics released by comScore – an analytics firm – on February 2013, Apple and Samsung have continued their two-horse race for the U.S. smartphone subscription over the last quarter of 2012 (Campblell, 2013). For three months ending in December 2012, Apple’s iPhone had maintained its dominance in the U.S. smartphone market which raised its share of the market by 2% up from 36.3% in the previous quarter. However, Samsung, the biggest competitor to Apple had experienced the most positive change over the same period by controlling 21% of the market. These two smartphone giants were trailed by HTC and Motorola, which unfortunately were experiencing declining results with market shares of 10.2% and 9.1% respectively (Campbell, 2013). The following table shows a percentage share of smartphone subscribers for the period between September 2012 and December 2012

Smartphone Market 01
Smartphone Market Apple

Source: comScore (2013)

This was a representation of 125.9 million people in the United States who were owning smartphones during the last quarter of 2012 (Jones 2013). As Apple was dominating in smartphone subscription, Google’s Android Platform operating system was leading with a 53.4 % of the market share in the fourth quarter of 2012 (Paul, 2013). This made Apple’s iPhone 5 and Samsung Galaxy SIII the bestseller in Q4 leaving HTC, LG and RIM struggling to get a share of the lucrative market.  The following table according to Jones (2013) shows a tabulation of Apple’s position in the period between December 2011 and December 2012

Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 +/-
Android 47% 51% 52% 53% 53% 6%
Apple 30% 31% 32% 34% 36% 6%
RIMM 16% 12% 11% 8% 6% -10%
Microsoft 5% 4% 4% 4% 3% -2%
Symbian 1% 1% 1% 1% 1% -0%
Other 1% 1% 1% 1% 0% -1%
Total 100% 100% 100% 100% 100%

Source: comScore (2013)

Threat Analysis

Apple’s dominance in the smartphone market for many years can be attributed to the advantage that the company takes from vital synergies that are available in its electronic ecosystem of electronics, computers and software (Comar 2012 p 31). Before the company released the iPhone, Apple already had an existing broad base of users for its iPods, computers and software like iTunes. The iPhone is a smartphone that can be easily integrated with other Apple products such as the Apple TV. It is the success of Apple’s other products that were carried over and integrated into the iPhone making it an unmatched smartphone with highly differentiated and integrated user experience.

As of 2010, most of Apple’s competitors were facing significant challenges in market share control due to Apple’s availability of a highly integrated electronic ecosystem.  However, Samsung has in the past two years revolutionized its smartphone presence in the United States making it Apple’s main competitor.  This has led to patent counter suits between Apple and Samsung being experienced in especially the last one year. Samsung has fully utilized its wide range of consumer products such as the manufacture of computer chips, PCs, TVs and printer to influence its smartphone innovation in recent years, a technique that Apple largely relied on in the earlier days.

Apple’s Weaknesses

The biggest challenge that Apple as a smartphone manufacture is facing today is the growing competition in smartphone operating system application platform. Apple smartphones use iOS which is a mobile operating system created exclusively by Apple. Over the last couple of years, Apple has been experiencing a significant long term risk in gradual loss of smartphone market share specifically to the Android platform. This trend has reduced Apple, a one-time smartphone giant, to a mere niche player in the U.S. smartphone market. The following image show’s Apple’s iOS market share as compared to other mobile operating systems for the period between January 2009 and June 2012 (Blodget 2012)

Smartphone Market Dissertation
Smartphone Market Dissertation

The Android platform that is giving Apple’s iOS a run for its money is a software stack of mobile devices which includes an operating system that is designed mainly for touch screen devices such as smartphones. Android, which is owned by Google, has played a key role in challenging the success of Apple’s smartphone by handing companies like Samsung an easy to use mobile operating system.

The reason why Apple’s smartphone market share is under siege is essentially because the smartphone market is a ‘platform’ market. Apple’s weakness here is that in a platform market, third company markets like Google build products and services on top of other companies’ platforms (Blodget 2012). In this case, Google continues to build the Android application for use by companies such as Samsung on their smartphones. Currently, Android and Apple are continuing to dominate the smartphone market with Apple’s share declining in a rapid manner in the last two years.

Another area of Apple’s weakness is its spending on research. According to Chen (2013), smartphone manufacturer, Samsung, outspent Apple by 2012 on research and development with Samsung spending 5.7% of its revenues on research as compared to Apple which has spent only 2.2% of its revenues. Research is essential, especially in a mobile based platform, since a company will always be abreast with not only emerging trends, but also reading the current trends of consumers.

Samsung’s Competition on Apple

Even though Samsung came in second in the U.S. smartphone market share, Samsung was the only company that recorded significant growth especially in the last quarter of 2012.  Paul (2013) points out that with increase in competition in innovativeness in smartphone design, Samsung’s growth rate was slightly more than Apple’s which consequently heightens the prediction of its market share results in the first quarter of 2013.  Samsung has not only been experiencing growth as a mobile phone manufacturer in the United States alone. Globally, for the first time in 13 years, Samsung toppled Nokia in the global mobile phone business on an annual basis at the end of 2012. Samsung accounted a growth of 29% in mobile phone business in 2012 which was up from 24% in 2011 (Wayne 2012).

Chen (2013) also concurs that for many years Apple has not face a challenger like Samsung, who can make very popular and profitable smartphones and tablets.   Whereas Apple is staking its success on creating new markets and then dominating them, Samsung is investing heavily on studying existing markets and coming up with new innovations inside them. Samsung’s strategy has seen the Samsung Galaxy SIII smartphone to be the first smartphone to engage on a neck-to-neck competition with Apple’s iPhone in sales (Chen 2013).

Samsung’s success over competitors like Apple and Nokia is being mainly forged by the company’s competitive edge in the smartphone sector. According to information and analytics provider HIS, on a global perspective, Apple and Samsung ended 2011 in an absolute two-horse race over smartphone market share, with only 1% separating the two (Wayne 2012) .

Business Analysis tools and techniques

There are many business analysis techniques and tools that can be used to analyze different business problems. This paper shall focus on four of the majorly used tools. They include:

  1. SWOT Analysis
  2. The PESTLE Technique
  3. The 5 Whys Technique
  4. CATWOE Analysis

SWOT Analysis

SWOT analysis is one of the most commonly used tools for analyzing and auditing the overall strategic position of a business and its environment.  SWOT is an acronym that stands for Strengths, Weaknesses, Opportunities and Threats.  For purposes of understanding the business environment of a company through SWOT analysis, strengths and weaknesses mainly focus on the internal factors while opportunities and threats focuses on the external factors.

Whereas a business cannot change the external factors affecting it, it can change the internal factors affecting its business environment. SWOT analysis do help companies for instance to understand the external environment of a business and how they can strategize on sustainability and performance.  SWOT also helps a company to identify a strategy that creates a concrete business model that best matches a company’s capabilities and resources to the environmental requirements. It is basically a foundation in which a business evaluates its internal potential and probable limitations in comparison to opportunities and threats posed by its external environment. Arguably, a consistent SWOT analysis of the environment that a business is operating enables a company to adequately predict changes in trend and also helps in factoring them in the decision making processes of the company.

Strengths

The strengths of a business are the unique qualities that enable a company, for instance, to accomplish its mission and vision. They form the basis on which the continued successes of a business are established and sustained.  The strengths of a business are what the business is well specialized in or the expertise it has, the traits and the exceptional qualities that its employees poses and the distinctive features as compared to others in the industry that gives the business its consistency.  They are simply the attributes within a company, which can either be tangible or intangible that give the business a competitive edge over others. Some of these beneficial aspects of a business may include: customer goodwill to the brand loyalty, human competencies, financial resources, products and services, etc.

Weaknesses

Weaknesses are the attributes and qualities that prevent a business from accomplishing its mission and consequently achieving its desired full potential. In SWOT analysis, these are factors that prevent a business from achieving successful results since they simply deteriorate a business’ growth. They are internal factors in a business that make the business not to meet the required standards that the business opts to be meeting. They may range from insufficient research and development capabilities as in the case of Apple Inc. when compared to Samsung Electronics, to narrow product range and depreciating machinery. Analyzing weakness assists the management in a business to know the areas in the business that need to be improved. Weaknesses precisely impact on the profitability of a business and if not well controlled, they may make a company to go out of the business.

Opportunities

Opportunities are essentially the possibilities that a business has in increasing their profit margins or improving on performance.  They are presented by the environment within which a business is operating. Opportunities arise when a business takes an advantage of the conditions posed in its operating environment to plan and execute strategies that could drive it to more profit making. Businesses have to be very keen in identifying opportunities and grasping them immediately they rise. It could be something as simple as releasing a new product line to targeting a new customer niche. Conducting a SWOT analysis on opportunities involves examining external factors to a business such as technological advancements and the state of the overall economy.

Threats

Threats to a business rise when external factors in a business environment compromise the profitability and reliability of the business. They create a vulnerability that is faced by a business when compounded to its weaknesses. They are peculiar external factors which cannot be controlled. For instance, the economic downturn of 2008 was factor that most businesses could not control. Political and social trends can also be possible threats to a business. A good example is the current social and political push for products that are more environment friendly as compared to those that are not.  An essential part in analyzing the threats of a company has to involve a look at the strengths of its competitors.

SWOT analysis is advantageous in that it presents valuable information since a business can evaluate the four elements either independently or as in combination (Nordmeyer, 2010). It also involves the integration of qualitative and quantitative data which is an essential part in formulating a business strategy. SWOT analysis is preferred by many since one is not required either have technical skills or training to conduct the analysis. This in turn makes SWOT analysis one of the most affordable business analysis tools that also requires a fairly short time to conduct.

The PESTLE Technique

The PESTLE technique is a business analysis technique that is mainly concerned with the external aspects of a business such as the environment. PESTLE is an acronym that stands for Political, Economic, Social, Technological and Legal Environment (Financez 2012).  This method is mostly used in analyzing a business environment and making market evaluations at the initial stages of the business. According to Marx (2010), the PESTLE technique primarily consists of four main phases.  These phases are:

  1. Formulating the external factors list
  2. Identifying the implications of these external factors
  3. Determining the relative importance of the impacts of the external factors
  4. Formulating alternative scenarios

Political – When generating a political-factor list, one is expected to concentrate on the key political factors that will affect a business. The taxation policy, for instance, especially during elections is one of the main political factors that a business needs to internalize and factor in its strategy analysis. How foreign policy will affect exports and imports especially to a business in such a field can also be a cognizant factor.

Economic – In this analysis, one is considered to factor the overall economic situation, the strength of consumer spending in business’ main product and service segment, both current and future government expenditure and how it may affect the economy among many other factors.

Social – When considering the sociological aspects in business analysis, it is important to concentrate on the cultural aspects that are likely to impact on the business (Marx 2010). Cultural and social trends have great influences on a consumer of any product or service. Therefore, it is important to consider factors on demography, lifestyle patterns, fashion, and work attitudes as well as religious and ethnic differences when analyzing a business environment.

Technological – This is one area that has greatly changed the lives of many people today. For a business to easily sustain itself in today’s world, it has to adequately factor technological advancements available to improve its overall performance. Having a big eye on technology is a major factor that creates a competitive edge of a business over its rivals (Financez, 2012).

Legal – Legal and political factors are closely related but for good business analysis, they are distinguishable. Current and pending legislation ultimately do have implications on a business which makes them a compulsory business analysis consideration as this technique provides. Legislation may affect employment, taxation, health and safety requirement, as much as many other aspects of a business.

Environmental – These are factors in business analysis that may have a connection with the environment. Aspects on pollution capabilities and recycling possibilities in the product and services of a company are important factors in business analysis.

The 5 Whys Technique

The 5 Whys technique is a problem-solving technique that assists one in getting to the root cause of a problem quickly (Manktelo & Carlson 2011). This method simply helps in determining the cause-effect relationship in a problem or failure event (Sondalini 2008). This technique was made popular by Toyota especially in the 1970s when they were developing their manufacturing methodology. The 5 Why’s technique simply involves looking at a business problem and asking ‘why’ and ‘what caused the problem’. In using this strategy to solve a problem, one simply starts with the end results and works backward in asking ‘why’ in a repeated manner until the root cause of a problem is apparent.

Five is a rule of the thumb and that is why this technique is called the 5 Whys technique. It is not a must for one to ask 5 ‘whys’ since one may ask more or less before finding the root cause of the problem. When one, for instance, in business is facing a certain problem, you start with a statement of the situation and ask why it is occurring. Then turn the answer to this questions into a second ‘Why’ question. The answer to the second ‘Why’ questions becomes the third ‘Why’ questions and so forth. Repeatedly asking why peels away ‘layers’ in an issue which then leads one to the root cause of a problem. When one refuses to be satisfied with an answer, this increases the odds of coming up with the underlying root cause of the problem (Sondalini 2008).  Some of the benefits attributed to this technique are:

  1. Simple – it does not require the use of advanced mathematical tools.
  2. Effective – it quickly helps to separate symptoms from causes
  3. Flexible – It can be used alone or in combination with other techniques

CATWOE Analysis

CATWOE analysis is a business analysis technique where an analyst prepares a report, that is analytical, to solve a particular problem. CATWOE is an acronym that stands for Clients, Actors, and Transformation, Worldview, Owner and Environmental constraints.  In business, it is a technique that is very useful in checking the features existing in a defined problem. The CATWOE technique is mostly preferred when identifying a business problem that requires prompting critical thinking on why it is really necessary to be solved.

Clients – The clients of a business have to be analyzed on so as to understand who are on the receiving end of the business’s products and services.

Actors – This comprises the employees who form part of implementing the business strategy or changes to achieve a desired mission.

Transformation – It comprises of an analysis of probable changes that have been introduced in a business. It also factors on the analysis of the processes involved in transforming inputs into outputs.

Worldview – In other words, this is the world view. This describes an analysis on the bigger picture that a certain situation or a problem in business fits.

Owner – Having a look on the stakeholders and identifying needs of the owners or shareholders of a business is crucial.

Environmental constraints – It includes an analysis on the external environmental factors in which a business is operating.

References

Blodget H. (2012). This Trend is very worrisome for Apple. Business Insider

Campbell M. (Wednesday, 6th February 2013). Apple and Samsung pull further ahead in U.S. smartphone market, iOS gains on Android.  Apple Insider

Chen B. (February 10th, 2013).  Samsung Emerges as a Potent Rival to Apple’s Cool. New York Times

Comar S. (November 29th, 2010).  Smartphone in the U.S. Market Analysis

ComScore (February 6th 2013). ComScore Reports December 2012 U.S. Smartphone Subscriber Market Share

Financez (2012). What is Business Analysis: 2 – PESTLE Technique

Jones C. (February 2013). Apple’s and Android’s U.S. Smartphone Market Share Continues to Increase.

Manktelow J. & Carlson A. (2011). 5 Whys – Quickly getting to the root of a problem. Mind Tools

Marx C. (July 20th, 2010). The PESTLE Strategic Marketing Analysis Technique: Compiling the list of External Factors. Yahoo! Voices

Nordmeyer B. (2010). Advantages and Disadvantages of SWOT Analysis. Houston Chronicle.

Paul C (2013). Apple top US smartphone market with Samsung second. TechBeat.

Sondalini M. (2008). Understanding how to use the 5 Whys for Root Cause Analysis. Lifetime Readability Solutions

Wayne (December 18th, 2012). Samsung displaces Nokia as Top Cellphone Brand in 2012 and takes decisive Smartphone lead over Apple.  HIS Supplier

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