Apple Inc.’s Plans and Ideas for the Future

Subject: Strategy
Pages: 8
Words: 2316
Reading time:
8 min
Study level: PhD

Abstract

The future is not clear for Apple because the company deals with its challenges in a unique manner that leaves the competitors surprised. Over the past several years, the number of sales in the company has decreased and its stock prices have stagnated. The future of the company might see the development of new products like the iTV, the formation of partnerships with rival companies in the software development field, or new business ventures by the company. While most of the ideas for the future of Apple remain speculative, it is clear that the company will have to change its current business strategy to remain at the top of the game.

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Introduction

The concept of globalization has seen the expansion of the international markets as more nations embrace the phenomenon. This expansion of markets on the international scene has resulted in an increase in the number of companies investing in foreign markets. Increased foreign investment has subsequently led to the development of stiff competition for companies operating in different industries. The technology industry has received tremendous growth, and different companies have piloted the development of innovative technology that has in turn resulted in competition for market share. The computer manufacturing industry is one of the areas that have seen the entry of many new companies over the past two decades, and the competition for market share in the international market is quite stiff. Most of the companies have designed innovative business strategies to enhance their competitive power, and to harness the existing opportunities in different markets. As the competition in the technology development industry increases, companies will face challenging times over the next half decade, and they will be forced to develop new ideas to retain their competitiveness in the business. This paper looks into the Apple Company and its projected future in the hardware and software business, as well as its service processes.

Background

Over the past decade, Apple has distinguished itself as a global giant in the production of technological hardware and software. The company has also ventured into the services delivery industry, and it has demonstrated the desire to develop into a highly competitive giant in the business. This tremendous growth at Apple has been partly imparted by the presence of an efficient board of directors who govern the decision-making process in the company and an innovative CEO. Steve Jobs, the late CEO of the company developed an organizational culture that has influenced the employees in the company to develop commitment to their work. The culture fosters innovation among the employees, and the management of the company supports any viable idea suggested by the employees. The core competencies and capabilities of the company are a result of the recruitment of talented employees. The business processes in the company are implemented through strategic plans that guarantee success for the company. Apple has diversified its products by venturing into both the hardware and software development fields of technology, and this translates to high competition with the giant players in the respective fields. Apple is currently experiencing stiff competition from companies like Microsoft, Google, and Samsung. The company must develop strategic growth plans over the next 3-5 years because the competitors pose big threats to its profitability.

Current situation

Apple is renowned for its aggression in developing competitive approaches in its business. The company is currently among the few companies that have opted to use Sapphire in the production of its products rather than using pure aluminum (Worstall, 2014). This is a strategy aimed at distinguishing the quality of its products from its competitors. The company relies on a few suppliers to deliver the raw materials used in the development of computer hardware products. In essence, the reliance on a few companies in the supply chain gives the suppliers substantial competitive power. This power means that the suppliers dictate the prices of the raw materials, and this has led to the high costs of the products from Apple. Apple has some of the most expensive products in the market, and this has forced the company to focus its marketing on the members of the high-income society.

The current drivers of growth at Apple are its marketing strategy and the development of innovative products. Apple has a very unique marketing strategy that does not value harnessing of a larger market share in the global market. The marketing strategy focuses on increasing profits for the company. This approach means that the company looks to limit the cost of production and increase the selling price of the products. The strategy has been effective for the company, and it is implemented through the production of a limited number of products, which is communicated to consumers prior to the release of the products. This approach leads to the development of high demand for new products from the company, which subsequently leads to big sales at higher prices (Bonningtoon, 2012).

Over the past several years, Apple has developed over 400 retail stores in different parts of the world, and they have availed its products to the global society efficiently. As the competition between the company and other giants in the industry like Samsung increases, Apple has decided to venture into high-tech business approaches. The company has developed online stores to provide different services to the customers. Top in the list of the most successful online business projects in the company is the iTunes, which provides consumers with the latest trending music. In 2013, Timothy D. Cook, CEO of Apple employed Angela Ahrendts as a chief strategist to market Apple’s online business platforms. The main goal of the company is to develop an online business platform that is as popular and lucrative as the physical store in different parts of the world (Chen & Scott, 2013).

Ms. Ahrendts is charged with the responsibility of developing a seamless retail platform that links the physical and online business processes. The strategist has used different social media platforms to establish the requirements of the people with reference to online shopping and she has used this information to make suggestions for the future of the company. Through Ms. Ahrendts’ innovative ideas in fashion, Apple has developed wearable technology like the internet wristwatch that is sold alongside some iPhone models. Apple is currently one of the most expensive luxury brands, and it is looking to expand its inventory of expensive products over the next decade. Apple has made it clear to the public that it does not intend to lower its costs by laying off some of its employees. Current statistics reveal that on average, every retail store owned by Apple generates $52 million in revenue annually (Chen & Scott, 2013). Business performance in the company is currently challenged by stiff competition from other giants in the business. Apple is experiencing declining market shares as some of its products have been banned in China. The company also faces the stagnation of its stock price, and there is a significant drop in the number of iTunes downloads. There is also an indication that the global market is gradually being saturated with iPhones, which means that consumers will gain bargaining power against the company in the near future. These are some of the challenges that the company should expect to face in the next 3 years (Arora, 2014).

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Future strategies

Over the past two decades, Apple has concentrated on producing quality products that its consumers need. Despite the high prices attached to its products, they have been making big sales in the retail stores established by Apple across the world. The future in the development of products by Apple lies in the threat that there is no guarantee that its rivals will not compete with Apple’s technology. This awareness compels the production teams to continue developing innovative ideas to enhance the quality of the products. The future for Apple is shaped as a continuation with its current aggressiveness in developing consumer-focused products. The company has to continue introducing new technology to remain at the top of the game. It has invested in a talented workforce led by Ms. Ahrendts, and the team is expected to pilot the company into higher levels of success in the business. As Steve Jobs revealed in 2003, the future of Apple lies in its ability to uphold the rules of innovation, and to focus on solving technological issues for the people before they are aware of the issues (Walker, 2003). For instance, the iCloud idea that has been developed by the company to enable users to store their music, applications, contacts, and books among many other valuable digital items has gained remarkable reception. People are excited that in the next 3-5 years, the iCloud will have attracted new ideas and products from Apple (iCloud, 2014).

To forge forward into success, Apple needs to focus on becoming self-sufficient in the production process. Since 2013, the company has developed entities to enable Apple to process its raw materials like Sapphire (Worstall, 2014). This move is aimed at eliminating the cost of sustaining the few companies in its current supply chain. By becoming self-reliant, Apple can offer its future products at lower prices and still make huge profits because the cost of production will be lower. This development means that the company will start targeting both the middle-income and high-income members of the society. The company does not focus on increasing its market share; hence, it is likely to stick to applying marketing strategies that lead to an increase in the number of units of the specific products it sells to the consumers.

Apple has demonstrated its intentions to increase its capabilities of designing attractive products. Part of the business strategy of the company is to produce quality products with respect to their appearance and performance, and this strategy has been reinforced by the presence of Ms. Ahrendts. The company will continue developing wearable technology to give its customers a better experience with its products. Apple will also continue to diversify its business processes. For instance, the company could come up with the iTV over the next 3-5 years or even develop an entirely new product with its iOS technology (Bonningtoon, 2012). There is a need for the company to keep introducing new stylish products to the market because the current business environment is not supportive of constant growth in sales of smart phones. The company has been struggling to make big sales with every new smart phone and with the entry of Google in the market and Samsung’s aggression indicate that competition is getting stiffer. Over the next four years, Apple will still make profits from the iPhone, but the margins will be lower because the competing companies will have a hold of some of its customers.

Innovation in the production field will cease to be the core source of strength for the Apple brands. Over the years, the company has received huge profits from its retail stores, but Ms. Ahrendts’ dream for the future of the company is rooted in the online stores. She is particularly pursuing better relations with the Chinese government to lift the bans it has placed on Apple’s products. The Chinese market provides an integral market zone for Apple and it will probably be the main target zone for Apple over the next half decade. The taste and preferences of the Chinese society reveal that they appreciate the high-quality products from the company. Their purchasing power is also quite high; hence, they will afford the expensive products. While many business analysts have claimed that Apple’s big challenge in China is to gain larger market share, the traditional business strategy of the company solely focuses on increasing its profit margins. Aside from venturing into new markets, Ms. Ahrendts has also indicated that she intends to change the entire experience at the Apple stores for the customers. Her goal is to ensure that customers are satisfied with the fast delivery of services from the time they find their desired products to the exchange of information about the products. She also looks to change the way customers pay for the products. In essence, she intends to add value to Apple’s products through the enhancement of services at the retail stores (Bonningtoon, 2012).

There are prospects that over the next half decade, Apple will venture into strategic partnerships with some of the giants in the market. It is expected that Apple will finally ease its limits on iOS apps for Google devices. Allowing Google to have some of the most attractive apps will increase profits for Apple in the software development field. Android’s growth rate over the past several years indicates that it will be a leading brand over the next few years, and Apple will have to find a way to compete or collaborate with the rivals in some areas of the business. Apple is also expected to tighten its grip on mobile payment services through its iOS devices. The company will engage money transfer companies in the local markets in stiff competition, and it can emerge successful by allowing Android to install iOS mobile payment apps. This will be a shift in strategy for Apple, but it is a viable venture (Arora, 2014).

Conclusion

Apple has experienced changes in the international market over the past several years. These changes have been fueled by the development of highly competitive power by some of Apple’s close rivals. The future is not clear for Apple because the company has developed a business strategy based on diversification of products, but it is expected that the innovative nature of the company will prevail. Apple has hinted on taking full charge of the supply of its raw materials, and this will make Apple’s products cheaper in the future. The company is also expected to enhance the viability of its service industry. Partnerships are also a potential shift that Apple might take to maintain its high profitability in the business.

References

Arora, N. (2014). Apple Could Spur Growth by Opening up iTunes, Mobile Payments. Web.

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Bonnington, C. (2012). What Tim Cook’s comments reveal about Apple’s future. Web.

Chen, B. X., & Scott, M. (2013). Apple hires Burberry Chief to Polish Image of Online Stores. Web.

iCloud. (2014). Web.

Walker, R. (2003). The Guts of a New Machine. Web.

Worstall, T. (2014). Explaining the economics of Apple’s Sapphire supply chain. Web.