Acknowledgment
This dissertation is the culmination of a highly challenging but very interesting journey towards the completion of my master’s degree. The journey was long and full of twists and turns that I may not have been in a position to overcome without the support of several individuals. These individuals played a direct role in ensuring that this dissertation was a success.
I would want to sincerely acknowledge the support I received from my lectures who; as a team, ensured that I successfully went through my master’s degree. I would like to specifically appreciate the effort made by my major professor, Dr. (insert surname) who guided me through the entire dissertation process. I would also like to acknowledge all the respondents who participated in this research by responding to the questions.
Abstract
The electronic industry has expanded very fast over the past few decades. Various firms have been introduced into this industry, creating a new form of competition that was not existing before. The emerging technologies have redefined this industry in terms of products offered, marketing strategies, and the levels of competition. Technological advancements have forced firms in this industry to redefine their products and marketing strategies to remain relevant in the market. Apple Inc finds itself facing stiff competition from other market leaders such as Nokia and Samsung. Another serious threat is coming from numerous electronic firms that are mushrooming in China. These new firms are coming into an already congested market, making the levels of competition in this industry very high. Apple Inc has been forced to come up with various strategies that would help in making it competitive in the market.
Introduction
Background of the Study
The business world is increasingly getting competitive. The electronics industry is one of the most competitive industries in the current world. This industry has experienced consistent growth over the past three decades to reach the current heights. According to Chaston (2009, p. 98), the electronics industry has experienced massive growth over the past decade, especially due to the technological advancements in various fields related to this industry. The need to have phones and personal computers has helped push the technological advancements in this industry. In the current society, mobile phones have become a necessity not only to the citizens of developed nations but also to developing nations around the world.
Personal computers are also gaining popularity at a very high rate in the current world. This has seen various firms emerge especially in China and Korea to compete for the market that was previously considered a preserve for the large multinational American firms such as IBM and Apple. With the emergence of these new firms, there has emerged a new form of competition where firms are struggling to use all the possible avenues and strategies to gain a competitive advantage over their competitors in the market. The competition is so stiff that any firm that makes a misstep will automatically fall into this industry. As Evans (2012, p. 85) puts it, as technology brings in new and better ways of satisfying customers’ needs, firms are forced to double their effort and ensure that they can use this technology not only for the satisfaction of the customers but also to gain a competitive advantage over their competitors in the market.
Apple Inc is one of the companies that are operating in this industry. This firm was founded by Steve Jobs and Steve Wozniak on April 1, 1976. The two individuals were determined to come up with an electronic firm that would be able to meet the needs of a market that did not know of the existence of such a product. Steve Jobs, with a massive ambition to develop a strong company, combined his entrepreneurial skills with Steve Wozniak’s technical knowledge to start a company that grew at a rate that even the two had not predicted before. The firm has experienced consistent growth over the years, and currently, it is one of the leading brands in the world. Anderson (2004, p. 112) notes that the Apple brand was voted the most expensive brand in the year 2010. This is a clear indication of the growth that this firm has experienced over the years. Although the firm experienced some serious challenges in the late 1980s and early 1990s, especially when Steve Jobs was sent away from the firm, the firm made a come-back in the late 1990s following the return of Steve Jobs. With his business acumen, Steve Jobs was able to make a turn-around for the firm, from a feeble firm barely managing to meet its costs, to a profit-making organization that was able to beat some of the top industry players. The report by Bissoondoyal (2006, p.45) shows that under his leadership, Apple was the most profitable firm in the year 2010, overtaking Microsoft for the first time, since the inception of this firm.
This kind of competition means that a firm must be able to determine how well it can meet customer demands to ensure sustainability. In this industry, technology is one of the key factors that determine the success or failure of an organization. According to Andrzej and Buchaman (2007, p. 34), the electronics industry has been experiencing a lot of pressure due to the changes taking place in the field of technology. These scholars say that it is practically impossible for a firm to determine what technology will present to the market tomorrow. Technology has become so unpredictable that it forces these firms to devise ways through which they can manage the unpredictability of this technology. Firms are kept guessing how this technology will affect various operational activities, and whether or not they will be able to withstand the pressure brought about by this technology.
As Evans (2012, p. 113) says, the firms that are flexible to technology have found themselves succeeding in a market where their competitors are struggling to stay in the market. Firms in this industry cannot afford to be lagers when it comes to adopting emerging technology. The best way of managing the emerging technologies in this industry according to Ferrell (2011, p. 90), is by being the driver of the change. When a firm takes the position of the driver of emerging technology, it becomes possible for the firm to determine the best direction to take, and how this direction can give it a maximum benefit over its competitors in the market. This is the strategy that Apple and Samsung, the leading players in this industry, have used to outsmart their competitors in the market. This research sets forth to analyze this industry based on the level of competition, and how different environmental factors have affected it, with a specific focus on Apple Inc as one of the leading companies in this industry.
Problem Statement
Apple Inc is one of the top brands in the electronics industry. The electronics industry has experienced massive growth over the past decade, making it one of the most competitive industries in the world. Gerber (2008, p. 78) says that the level of competition in the electronics industry is so high that players that are unable to adopt the emerging technologies in the appropriate manner risk being eliminated from the market. It is, therefore, a worrying trend that Apple is losing its footing in the market as the industry leader in this industry. Recent reports have indicated that Samsung has already overtaken Apple in the electronics industry. Gerber (2008, p. 62) says that Samsung has been able to assert itself as the industry leader in this market at the expense of Apple which remains its archrival. The biggest question is what the fate of Apple would be if the current trend is to continue. Motorola was one of the best brands in the phone market. However, this brand slowly disappeared as new brands came to the market. IBM was the giant in the personal computer industry, and no one ever imagined that there would be a firm that would be able to rival it in this industry for several centuries to come.
However, the IBM brand is almost becoming extinct in this industry, having been overtaken by various other brands, some of which emerged very recently. It is, therefore, very intriguing to imagine that such a brand as Apple Inc would soon be forgotten in this industry as some of the industry players have. Considered the driver of the modern technology in the Smartphone industry, it would be an unfortunate occurrence if this firm, considered the most innovative firm on earth in the year 2010, would be pushed away from the market due to a new twist of technology that is proving difficult to manage for this firm. This research is intended to investigate the current affairs in this industry to determine the position of Apple, and how possible it is that it can recover its lost glory in a near future in this industry.
Justification of the Research
Companies play an important role in determining the prosperity of a nation, and in improving the living standards of people. In the 21st century, Apple Inc is considered the leading firm that came up with new inventions in the electronics industry that have redefined the social structure of our society globally. The introduction of the Smartphone completely changed the mobile phone industry. Cloud computing has redefined the way data is managed within the organization around the world. The firm has also introduced some of the most effective laptops for use by both students and professionals. This firm has also had a positive impact in other fields such as hospitals and the security sectors. With its machines that help in checking of weapons in the airports, air transport has become safer as the machine makes it difficult for criminals to get into the planes with their weapons. This is how important Apple Inc is to the world. Other competitors of this firm are very smart in implementing the technologies introduced by Apple, and making the best out of it.
It is, therefore, a worrying trend that firms that are unable to come up with creative ideas in this industry are overtaking Apple Inc in its own game. They are threatening to eliminate this innovative firm from the industry. The threat is very real, especially when Apple was overtaken by Samsung in the industry. There is a clear indication that if actions are not taken by the management of Apple Inc to reverse the current conditions, then this firm will only be in memories of how wonderful it was. This research is, therefore, intended to determine the current situation in the market and determine how this firm can make a comeback into this industry, or at least avoid being eliminated by other new entrants into this industry.
Research Aim
The research aim of this dissertation was developed in the research proposal that was prepared before this research. In every research, it is always important to clearly define aims and objectives. According to Anderson (2004, p. 14), aims are the broader desired outcomes of a given research. They are the long-term benefits that such research should bring to an organization. This scholar holds that research should have specific aims that would define its path. It will be clear to all the stakeholders that such research would be striving to achieve a specific outcome in the long run. This research paper is no exception. This research paper aims to give a report, based on research, of the electronic industry given the emerging trends in the market.
Research Questions and Research Hypothesis
Any piece of research requires clearly stated research questions that would help in guiding the researcher when gathering data from the field. Research is a very complex process that involves going to the field and gathering information from a sea of knowledge that is available both as primary and secondary sources. In both sources of data, it is easy to be swayed from the main topic because one would meet a lot of information that is very interesting, but irrelevant to the research. If one lacks research questions, it is possible to get involved in collecting irrelevant data that would be of no use to the research. The research questions, therefore, acts as a guide, that would direct the process of data collection and avoid incidences of collecting irrelevant data. As stated above, the research questions are always dictated by the research aim. After defining a research aim, it is easier to define research questions and research objectives. The following are the research objectives of this research.
- What are some of the environmental changes in the electronic industry within the last five years?
- What is the level of competition in this industry, and are there indications that this level of competition is here to stay?
- With a focus on the selected firm, how are firms struggling to ensure that they remain competitive in the market?
The above three questions will help in defining the process of data collection. The questions will be used to develop a questionnaire that will be used in the collection of primary data for this research. The questions will also be very helpful in guiding the process of reviewing the literature in this research.
Objectives
Objectives are the specifics of the research aim. They help in defining the specific issues that are to be achieved by the research upon its completion. Following the above questions, the researcher developed the following research questions to guide this research.
- To give a clear understanding of the current electronic market with a focus on Apple Inc.
- To bring an understanding of the main players in this industry and how they relate.
- To research and report on the impact of technology in this industry.
The above objectives define the focus of this research, and what the researcher plans to achieve by the end of this research.
Research Hypothesis
Research hypotheses are always important in helping a firm define the path to be taken in the research by hypothesizing the expected result. In this research, the following are the hypothesis that the researcher wishes to confirm through primary and secondary data analysis.
H1o. The changing technological environment has not had a positive impact on the electronic industry.
H1a. The changing technological environment has had a positive impact on the electronic industry.
H2o. Given the current trend in the electronic industry, the future of the electronic industry does not seem to be more competitive.
H2a. Given the current trend in the electronic industry, the future of the electronic industry seems to be more competitive.
H3o. Apple Inc cannot overtake the industry leaders in the mobile phone industry despite its recent market strategies.
H3a. Apple Inc can overtake the industry leaders in the mobile phone industry given its recent market strategies.
The researcher wishes to confirm the alternative hypotheses, by rejecting all the null hypotheses using both the primary and secondary sources of data.
Scope of the Study
According to Anderson (2004, p. 38), it is always very important to define the scope of the study when writing a piece of research. This is because research is always intended to help in elevating the current condition of the factor under consideration. As such, policymakers may find some research relevant in defining their research. In this paper, the researcher used both the primary and secondary sources of data. However, it is worth noting that the primary data was collected within Canada. The primary data was collected from the employees of this firm in the city of Markham located along 7495 Birchmount road. It is important to note that the primary data is the core of this research in determining its validity. The employees of this firm were, therefore, able to give relevant information based on their understanding of this firm within this environment. It is important to note that some of the employees of this firm that were interviewed are from the head office of this firm in California in the United States. Some of the employees of this firm who had previously worked at the head office of Apple Inc at Apple Campus were also identified and interviewed by the researcher during the process of collecting the primary data. As such, this research paper will be applicable in the context of both the United States and Canadian markets. The information contained in this report gives the image of the electronic industry in the two markets over the past decade, and its current position. In chapter two, the researcher analyzed the literature relevant to this research.
This literature helped give a wider picture of the electronic industry over the past several years and in different markets. The secondary sources of data were helpful to this research in analyzing other major markets in the world such as Europe and China. These are markets where the researcher could not conduct primary research due to the limitation of time and finance available for conducting this research. Any application of this document as a whole is, therefore, most relevant to the Canadian and the United States’ market because the scope of primary data was limited to the two countries. However, the scope is wider for anyone who intends to use the review of the literature in this research, because the literature was gathered from renowned authors enhancing the authenticity of this research. Any application of the primary data in an environment that is different from the above-stated markets may not give desirable results. However, the scope of the research is widened when the research is to be used for academics.
Literature Review
The Electronic Industry
The electronic industry has attracted the attention of many researchers, especially following the massive development that has taken place over the past decade. According to Gountas and Mavudo (2008, p. 56), the electronic industry has experienced huge growth over any other industry in the world. This scholar says that the electronic industry is at the center of the developments taking place in the field of technology. As technology changes, so do the changes in the electronic industry. This argument is supported by Handlechner (2008, p. 118), who says that the electronic industry has experienced steady growth over the years due to technological growth. Firms in this industry are forced to implement these technologies if they are intending to develop in the market. The competition is stiffer in the mobile telephone market than it is in the computer market. This is because mobile phones have a wider market than the computer industry.
The mobile phone industry has attracted a lot of firms from Europe, the United States, and Asia, especially China. China has seen a huge growth in the number of firms operating in this industry. Hooley (2008, p. 89) says that China has overtaken the United States in the manufacturer and exportation of mobile phones in the world. As Handlechner (2008, p. 115) says, the electronic industry has experienced a paradigm shift. The current market has eliminated all the avenues that were previously considered as permanent sources of advantage. The current society is so dynamic that what a firm considers a competitive advantage may easily turn out to be its main undoing in a near future. Hooley (2008, p. 19) gives an example of the competition that existed between Kodak and Fujifilm.
This scholar says that Kodak was the undisputed leader in this industry, and Fujifilm was considered as a small firm trying a competition that is beyond its reach. The main competitive advantage for Kodak was its ability to produce photographic films in ways that were beyond the capacity of Fujifilm. However, this turned out to be the main undoing of Kodak as Fujifilm adopted the digital technology while Kodak considered maintaining its production strategies that had remained its source of strength for several decades. By the mid 20th century, Fujifilm had already overtaken Kodak in this industry as the market leader. Kodak had to be rescued by Citibank from possible insolvency in 2010. This is the nature of the electronics industry in the current society. Firms are forced to come up with alternative ways of marketing that would enable them to be more appealing to the market to be sustainable. Ignoring the emerging technologies, as Hooley (2008, p. 113) says, may be suicidal.
The Emergence of China as a Powerhouse in the Electronic Industry
For a long time, the United States was considered as the land of possibilities (Hill & Jones 2010, p. 42). Scientific innovation was rife in this country, especially after World War II. The baby boomers have proven to be very innovative and this helped in developing this industry in the United States. There was a sharp rise in the number of electronic firms in the United States from 1945 onwards. Such firms as Microsoft and IBM were very strong and were unchallenged in the industry. Apple would then emerge in the 1970s in the computer industry. However, it diversified its products soon after getting into the market to focus on other areas of electronics.
This glory of the United States has been strongly challenged by China as a force in the electronics industry. China has an advantage over its competitors, given the population of the country. China is home to about 1.35 billion people, making it the most populous country. This large population has been a big advantage to the development of firms within the country. The population means that the country has cheap labor which would enable the firms to cut down on the costs of operation. The huge population offers a massive market for this firm. As a result of this, China has been able to come up with various electronics firms that have been a threat to the American firms in the global market (McLaughlin & Aaker 2010, p. 67).
Lenovo has come out strongly as one of the leading firms in the electronics market globally. There is also a sea of small electronic firms in this country that have specialized in the manufacturer of phones for the emerging markets in Asia and Africa. Such firms as Smadle, Tecno, and Bird amongst others have come up in this country with the specific aim of capturing the emerging markets. The Chinese government has been very supportive of Chinese firms. According to Chaston (2009, p. 19), this government has been offering new firms various incentives as a way of helping them grow. As a result of this, a series of Chinese electronic firms have emerged, posing a serious challenge to most of the United States giants.
Apple Inc and its Position in the Competitive Electronics Industry
Apple Inc is considered as the second-largest phone making company after Samsung and Nokia Chaston (2009, p. 29), and the second-largest electronic firm after Samsung. This gives a very clear picture of how competitive the market for electronics is competitive. According to Bissoondoyal (2006, p. 89), competition is very healthy for the development of firms in every industry. This scholar says that competition acts as the fuel that propels firms to develop their systems in a way that would offer maximum satisfaction to its customers. The scholar says that the current developments witnessed in various industries, and specifically in the electronics industry, can be attributed to the increased competition in the industry. Firms are struggling to outsmart their competitors and be the best in their respective industries. As a result of this, firms always make an effort to improve their systems to offer maximum satisfaction to the customer. This brings about the positive development of these firms in the market. However, there are levels where competition can be considered destructive. Chaston (2009, p. 89) says that in cases where firms are considering the use of pricing strategy as a way of gaining competitive advantage, firms involved in such competition may experience serious losses, especially when they are forced to lower their margins below sustainable levels.
The electronics industry where Apple Inc operates is very competitive and at times one may consider the level of competition as being destructive (Andrzej & Buchaman 2007, p. 73). This scholar says that the level of competition in the electronics industry has intensified with the emergence of various Chinese firms into the market. According to Bissoondoyal (2006, p. 72), most of the Chinese markets have come to realize that there is a huge market in the developing economies such as in Africa and parts of Asia. In these economies, the market has the willingness to buy but lacks the capacity. Using the outside-in approach to marketing, these firms have come up with cheap electronics that can easily be bought in these markets.
Bissoondoyal (2006, p. 90) says that Chinese firms control over 70 percent of the mobile phone market in Africa. This is because they have released cheap phones that can easily be afforded by the majority of the poor. This move found Apple and other major phone manufacturers such as Samsung and Nokia unaware. These Chinese firms managed to convince this market that their products are not only price-sensitive but also of the current trends in the market. With a touch-screen phone going at a price below $ 40, these firms have become entrenched in the emerging markets. To the developed nations such as the United States and Europe, these firms use different brand names to produce high-end products that the market will consider the right value and then charge premium prices. With this strategy, the firms have been able to appeal to both ends of the market, making them very competitive in the market
According to Chaston (2009, p. 45), Nokia and Samsung responded to the move by these Chinese firms by producing cheap products. Nokia was able to respond to this movie and has been able to fight for the market in developing nations. It managed to produce cheap phones that can be bought by the majority of the population in developing nations. Samsung also followed Nokia by producing phones that could capture this market segment. This has helped them increase their profitability. Bissoondoyal (2006, p. 126) says that the African market is very huge, and ignoring it may be an easy way of letting competitors get away with a competitive advantage. However, a firm should be in a position to offer what the market needs.
Bissoondoyal (2006, p. 89) says that Apple has not made any serious attempt to attract the lower market segment, especially in Africa and some of the developing economies in Asia. The focus of this firm, according to this scholar, has been the rich and the middle-class market segment all over the world, with the capacity to purchase the products at premium prices. This has helped it in creating a niche in the market that is not challenged by other firms, especially those from China. Chaston (2009, p. 56) says that Apple has been able to create an environment where its products are considered superior to other products in the electronics industry. This is witnessed in the manufacturer of the Smartphone. The battle in this market has been reduced to two firms, which are Apple Inc and Samsung. Hooley (2008, p. 56) says that although the strategy to focus on high-end products helps strengthen the niche for this firm, the strategy eliminates the profits that would have been earned if the firm were operating in all the market segments. This may explain the reason why Samsung has maintained a leadership position in the market over other market competitors, including Apple Inc in the manufacture and distribution of Mobile phones. The table below shows the top mobile phone manufacturers in the world.
Table 1. Source: (Hooley 2008, p. 67).
The table above shows that Samsung is strongly in the lead in the manufacture and sale of mobile phones in the world market. The table shows that the management team of Apple Inc has a lot to do to breach the gap that exists between it and the industry leader. The market share of Apple is about a third that of Samsung. As Bissoondoyal (2006, p. 79) says, when a firm loses its market share to the competitors, irrespective of the market segment, such a firm would be giving the competitor an avenue through which it can be trounced in the competitive market. The management must ensure that the market share is increased, even if it means that the firm would be forced to find new market segments other than the current segments.
Theoretical Perspectives
PESTEL Analysis
According to Handlechner (2008, p. 128), the electronic industry can best be analyzed using some of the theoretical perspectives proposed by recent scholars in this industry. To understand the external environment in which these firms operate, PESTEL Analysis would be appropriate.
Most of the electronic firms, Apple Inc included, operate in the global market. The political environment in the global market is as varied as the leadership of these individual countries around the world. However, the specific focus would be given to the United States Europe, and China. These are the major markets for phones, besides being the host countries of these firms where the process of manufacturing the phones takes place. The political structure of the United States is very stable. The country has witnessed various regimes come to power and leave in a very peaceful manner. The European countries have also enjoyed a prolonged period of political stability. Although China had some political strife in the year 2010, the government has been able to resolve this issue, and the country is now operating peacefully. South Korea, which is home to Samsung, has had a peaceful political environment, although there has been a fear of attack from the North. A generally peaceful market helps firms in developing their productivity. As Chaston (2009, p. 142) says, a country with a stable political structure makes it easy for firms to operate without any fear of acts of lawlessness. This means that there would be security within that particular country. Security is always an ingredient for prosperity for firms.
The economic conditions of a country or a region will always determine the growth of a firm or an industry. As was stated previously, electronic firms have global market coverage. Any changes in the economic status of a country will affect these firms in one way or the other. The 2008/2009 world economic recession had a massive negative impact on most of the electronic firms and this industry in general. This impact was largely felt by this industry because its main markets in Europe and the United States were the hardest hit by this recession. The recession was also felt in other continents such as Africa and parts of Asia. This slowed the growth of this industry. As the world recovered from this recession, this industry felt relief as the purchasing power of the market increased. The market with a higher purchasing power is a sign of a firm’s capacity to increase its productivity. Handlechner (2008, p. 38) says that within the past two years, most of the countries have experienced impressive growth in their economy. Although some countries such as Greece have had an economic downturn, they make a small percentage of countries having negative economic growth. This is means that the external environmental factor for these firms is favorable.
The social environment where these firms operate is also varied. According to Evans (2012, p. 28), the social structure of society would always determine the buying rate of what is purchased. For instance, Gerber (2008, p. 60) says that when Apple introduced its iPhone 5 in the market, over 2 million pieces were sold within the first two days. It took over three months to sell half this number of phones in the Chinese market although the Chinese population is almost twice that of the United States. According to Handlechner (2008, p. 117), understanding the social environment in which a firm operates is very important in helping a firm to segment the market. Market segmentation is helpful for a firm because it helps identify specific markets in a way that would enable it to satisfy each market segment successfully.
Each market segment always has unique needs based on the social stratum in which they occupy. When classifying the global market, the basis of classification is always on the purchasing power of the citizens, irrespective of the GDP of that country. This explains why Samsung would export its high-end products to Finland, while China will receive cheaper phones although the GDP of China is higher than that of Finland. For this reason, most of the cheap electronics find their way to Africa and other developing economies in Asia. On the other hand, high-end products find their way to the United States and Europe. This segmentation is done based on the social class of these markets. As Chaston (2009, p. 27) says, the poor will always be willing to pay cheaper prices even if the quality of the product is compromised. However, the rich would be willing to pay premium prices for the products they purchase as long as they are assured that the quality of these products is within the expected standards.
As was discussed above, technology remains the nightmare that firms have to deal with in the current market. According to Handlechner (2008, p. 48), the technological environment has become so unpredictable. as the emerging technologies keep changing the approach taken in manufacturing products, different players have been forced to cope with these changes or risk being thrown out of the market. Apple Inc has been considered the most innovative firm in this industry. When it introduced the iPad into the market, the product became a hit almost instantly. The product was beyond the market expectation, and as such, it exceeded the level of satisfaction they had in mind. However, Samsung also managed to adopt this technology, and currently, the two firms are locked in stiff competition for the market of this product.
While Apple expected that this would give it a competitive edge over other firms, the movie has opened a stiff competition between it and the market leader, Samsung. Given the wider market coverage of Samsung, Ferrell (2011, p. 37) says that it would be easier for Samsung to overtake Apple in the sale of this product. This is a case where its innovative skills will be acting as its undoing. Unless a firm can continue innovating new products, Hill and Jones (2010, p. 83) say that it risks being overtaken by other competitors. This is because when competitors learn the skills that were giving this firm a competitive advantage, then the skill will cease to be a competitive advantage. Given the rate of technological changes, it forces firms in this industry, all the firms operating in this industry must ensure that they adopt the emerging technologies at a rate fast enough to make them manage the competition.
Environmental issues have become one of the factors that have affected the operations of firms in this industry. According to Ferrell (2011, p. 50), there has been an increasing pressure to have a sustainable environment that can support the future generation. This scholar says that there has been an increase in the number of non-governmental organizations that have come out strongly to fight environmental pollution. The Greenbelt Movement is one such organization. The electronic industry has been accused to be one of the leading industries in pollution of the environment. Individual electronic firms have received criticism over the level of pollution in their manufacturing plants. One such company that has been criticized for environmental pollution is Apple Inc. another factor that this industry must find a solution to is how to dispose of their wastes.
Electronic wastes pose a serious threat to the environment around the world. According to Gountas and Mavudo (2008, p. 70), a firm that plans to win the market through a positive market image should be able to convince the public that it is committed to fighting environmental pollution. This may involve taking part in various corporate social responsibilities that are focusing on environmental pollution. Chaston (2009, p. 38) says that one of the best ways through which a firm can create positive awareness for its brand is to engage in activities that are focused on environmental conservation. The market is very sensitive to issues concerning environmental sustainability, especially following natural disasters such as cyclones that have been witnessed in various parts of the world, and are associated with environmental degradation taking place all over the world.
According to Andrzej and Buchaman (2007, p. 73), the legal environment is also a factor that a firm must know how to deal with to be able to operate successfully in the market. This scholar says that a business unit cannot operate in a vacuum. It must operate in an environment where it interacts with various other firms and individuals who would need to be treated just as well as that particular firm would want to be treated. As such, some laws are always enacted to help guide each industry, and how firms are expected to operate within a given market. The legal environment differs from one country to another. Chaston (2009, p. 78) notes that the global market is liberalized, and this allows electronic firms to operate in a market with limitless boundaries. However, there are some specific rules that each country around the world has on how individuals firms should operate while within their borders. There is also a law that defines how each firm should relate to each other in the market. One of the main legal issues that firms in this industry must take into serious consideration is the patent issue.
There is a law that prohibits one firm from stealing the intellectual knowledge of another firm in this industry. There is a stiff penalty for this crime, and every electronic firm should be aware of this to avoid litigation cases that may have a serious negative impact on their environment. A case in point is the battle between Apple Inc and Samsung over the patent issue that saw Apple Inc come up with iPhone 4 (Andrzej & Buchaman 2007, p. 80). Samsung accused Apple Inc of stealing its technological invention in coming up with iPhone 4. This scholar notes that there has been a legal battle between the two firms over the patent right. When the case was first brought to the court, the ruling was made in favor of Apple Inc, which meant that it was free to continue with the sale of this product. However, when Samsung appealed the case, the ruling was made in favor of Samsung, as the court determined that Samsung was the first to come up with the invention and that the technology Apple used in iPhone 4 was closely related to that of Samsung. Gerber (2008, p. 73) says that court cases are not only injurious to the finances of a firm but also its reputation. When a firm is forced to go to court frequently over any issue, the public will always start to develop a negative attitude towards the firm. The court battle between the two firms is injuring the positive image of both firms.
SWOT Analysis
The above analysis is on the general external environment where Apple Inc and its competitors operate. However, it is important to analyze the internal environment of a firm to determine its capacity to sustain market competition. It has been confirmed that Apple Inc is ranked third among the top manufacturers and sellers of mobile phones. There is a need to ensure that this firm uses its internal capability to outmuscle its competitors over the market. Conducting a SWOT analysis of the firm would be of help.
The strength of Apple Inc lies in its innovative capability that it has shown over the years. Apple Inc has been able to put a strong show of innovation in the market. According to Gountas and Mavudo (2008, p. 73), Apple Inc has been able to come up with innovative ideas that have helped in redefining the electronic industry. This scholar says that the touch screen technology is one of the most successful technological inventions in this field that is credited to the innovativeness of Apple Inc. this firm has also been able to develop iCloud, a system which allows users to store data in a virtual library. This innovativeness has helped the firm win trust of the market. This has helped in creating a strong base of loyal customers in the market. The ability of this firm to diversify its products has also been very helpful in making this firm competitive. Apple produces some of the best personal computers. It is remembered that Apple was the first electronic firm to come up with a desktop model of computer that had its central processing unit (CPU) integrated into the monitor. This was a move to meet the rising demand for more space in offices. The computer was lauded for its speed, and Apple was able to charge premium prices for this product. This firm has also been in operation for a period for about 40 years. Given the profitability of this firm in recent years, it is clear that this firm can fund most of its projects with a lot of ease. This increases the profitability of the firm in this competitive market.
Despite the above strength, Chaston (2009, p. 92) says that it is worth noting that this firm has some weaknesses that it has to deal with to maintain a competitive edge over other firms in this industry. One of the weaknesses that this firm has is in managing the wastes from its manufacturing plants. Just like other electronic manufacturers, Apple Inc has not been able to come out with clear policies that would help it reduce its level of emitting greenhouse gases to the environment. This firm has been accused of being one of the leading companies in the pollution of the environment by various environmental agencies around the world. The management of this firm has been full of advice to these environmental agencies on how much it is willing to fight environmental pollution, but all these have remained as empty promises without any concrete solution is coming out of it.
This has not only been annoying to the environmental agencies, but also to the public in general that has considered Apple to be a firm that makes promises that it is unable to fulfill. This has hurt the public image, and as Montiel (2011, p. 81) says, this may have serious negative consequences on the performance of the firm. The world market has become very sensitive to the environment. Viardot (2004, p. 63) says that the best way through which a firm can ensure that it remains competitive is to ensure that it develops a positive approach to managing the environment. It is through this that a firm can develop a close relationship with the market. This is because people are concerned about what the future will be if the current companies continue with their destructive emissions. If these firms can convince the market that they are playing a pivotal role in the fight against environmental degradation, then it would be possible to create a positive image to the public and develop a long-lasting relationship with the customers. This will guarantee this firm success in the market.
The world market has some opportunities that electronic firms should be able to take. This scholar says that firms such as Apple Inc have a massive opportunity to expand their operations by tapping into the developing markets in Africa. According to the survey conducted by McLaughlin and Aaker (2010, p. 142), the African continent has experienced consistent growth in the economy of individual countries. Such countries as South Africa have some precious metals such as gold and diamond. This has helped grow the economy at a very fast rate. Nigeria and Libya are known for their rich oil deposits. These countries, and many others in this region, have experienced consistent growth in the purchasing power of their populace.
Apple Inc has ignored this market for a long time because of the lower purchasing power of its populace. However, this has changed. Society has had positive growth in their income. This means that they have a purchasing power that is similar to that of the other parts of the world. Viardot (2004, p. 79) advises that Apple Inc should consider venturing into the world market with new products that would meet the needs of this market. The general world economic stability that has been experienced in the world’s major economies is also a source of success that Apple Inc should take advantage of. Ferrell (2011, p. 48) says that with stronger economies in the major electronics market, a firm can expand its levels of production, and this would mean increased profitability for the firm. The infrastructural development that has been witnessed in the developing nations is an opportunity for development for electronic firms. For a long time, most of the global firms have found it very challenging to operate in third world countries because of the pathetic conditions of the infrastructures.
Handlechner (2008, p. 63) says that these global firms could not find appropriate banking institutions as those that were in existence had poorly structured products as compared to those in developing countries. The insurance firms in these countries could not cover large firms, and their rates were considered abnormally high. The road and rail network was on its knees, and moving goods and labor from one point to another was difficult. However, Gerber (2008, p. 132) says that in most of these counties, this has changed considerably. Various countries across Africa have developed their infrastructure within the past decade to reflect on their increased capacity to sustain more international investment. Apple Inc should be able to take advantage of this opportunity. With the increased liberalization of the world market, electronic firms can increase their operations to various other countries in the world. This is the advantage that should be taken by Apple to increase its profitability.
According to Gountas and Mavudo (2008, p. 116), despite the attractive opportunities that electronic firms have in the market, they are faced with several threats that they must learn how to deal with to remain operational in the market. The biggest threat for firms in this industry is the level of competition. The market for electronics has a very stiff competition that only the best of the firms can manage to sustain the heat brought by this competition. Firms that are not able to compete favorably in this market are always pushed aside by others with better management strategies. Ferrell (2011, p. 47) recalls how competitive Motorola was in the mobile phone industry. At one moment, it would be easy to predict that Motorola would easily emerge as the market leader in this industry. It had come up with strategies to appeal to both the high-end customers and consumers with lower purchasing power. That is the strategy that had helped Nokia acquires a massive market share in the world, and given that Motorola was doing it even in a better way, one would easily believe that the firm would soon overtake Nokia and other giants in this industry to emerge as the leading manufacturer and distributor of mobile phones and other electronic devices.
However, this changed from 2007 to 2009. The firm experienced massive competition from other players and was forced to come up with better competitive structures. The strategies that the management came up with to contain competition were disastrous, and the result was a massive loss to the firm that forced it out of the market in 2009. The management could not withstand the heat any longer, and the firm was finally divided into two subsidiaries, to help in redefining a new path that would help it be more competitive. This is the competition that Apple Inc is facing. The management of this firm must come up with smart strategies that would ensure that it does not go in the same path that Motorola Inc, a fellow American company, followed on its way to sunset days. Another threat in this market is the international economic instability. The world market has been experienced a frequent fall in the economy. Whenever this happens, the purchasing power of the market slows, and this reduces the profitability of this firm. General insecurity in some countries is also posing a threat to the prosperity of these firms. For instance, Gerber (2008, p. 15) says that Apple had an attractive market in Libya and Egypt before the rebels overthrew the governments in these two countries. The countries were so secure then, and the economy was very stable. However, this has changed following the civil coup that took place about two years ago. The two countries are no longer safe. The operations in these countries have, therefore, been paralyzed.
Porters Five Forces Model
Porter is one of the theorists who came up with a model to help firms manage the market environment. This scholar says that understanding Porter’s five forces may help a firm manage market forces as a way of increasing its competitiveness in the market. The model should be incorporated with other models when coming up with strategies on how to manage the market. For Apple Inc, the application of this model can be very helpful in managing the threat of the mushrooming electronic firms in China and other parts of the world.
The first of the five forces is the threat of new entrants into the market. According to this theory, a firm should be ready to deal with the new market entrants in a way that would protect its market share in the market. Handlechner (2008, p. 52) says that the management unit should always have a clear program on how to deal with the situation whenever there is a need. For Apple Inc, the management should devise strategies through which it can contain the rising competition. China has seen a rise in the number of electronic firms that have specialized in the production of duplicate products of the existing products and selling them cheaply to the third world countries. To manage this rising threat of new entrants, Gerber (2008, p. 90) says that a firm should remain innovative, and consider producing new and more appealing products whenever a new entrant is detected in the market. This will ensure that the market will always remain thrilled with the products of this firm, and this will make them easily ignore these emerging firms in the market.
Porter also mentions the power of the buyers as a threat that a firm should always be able to deal with. According to Porter, when buyers have stronger bargaining power, then they will always demand cheaper prices for what they purchase in the market. This would mean that the firm will have lower profitability in the market. A firm should be able to devise ways of containing this power to manageable levels. One of the best ways of achieving this is by developing products that would acquire a new niche in the market that is not challenged by other firms in the market. As Gerber (2008, p. 102) observes, the bargaining power of the market is always stronger when they feel that they have various options from which they can choose to buy their products. As such, the best way of limiting this power is by eliminating the various choices that the market has over the issue of purchasing the products. In this regard, the management of Apple Inc should come up with strategies that would enable it to develop a special niche in the market. This would eliminate the liberty of choice that customers have in the market. This would enable it to charge premium prices for its products in the market.
Another force that firms in the electronics industry have to deal with based on this model is the power of the suppliers. According to Hill and Jones (2010, p. 83), the recent past has witnessed a rise in the power of suppliers in the market. Some of the suppliers have grown over the years through acquisitions and takeovers, and are currently experiencing an unchallenged power in the market. As Chaston (2009, p. 81) notes, these firms have grown over the years to reach a position where they can dictate the pricing of their products in the market. Dealing with a supplier who has a stronger bargaining power can be very straining to the finances of an organization as the firm will be struggling to meet the stated high prices. For a firm to dictate the price of its supplies to firms, then it must have control of the market for the product desired by these firms. It is this power that should be reduced. According to Gountas and Mavudo (2008, p. 28), the market has become as demanding as customers are willing to pay less for the products they buy. As such, firms cannot afford to pay higher prices as may be dictated by the suppliers. One way of reducing this power of suppliers is by looking for alternative suppliers. This will pass a message to the supplier that their higher prices would not be considered. Another way of doing this is by forming a strategic alliance with the suppliers as a way of eliminating their power.
When a firm forms a strategic alliance with the supplier, the process of setting the prices will be based on a mutual agreement where none of the parties will try to gain an unfair advantage over the other. Porter gives another force as the threat of possible substitutes in the market, which also includes the possible shift of a technology. According to McLaughlin and Aaker (2010, p. 41), substitute products can have a serious negative impact on the profitability of a firm. This scholar says that when a firm has stronger substitutes that the market favors, then it may be difficult for a firm to have a successful operation in the market. Apple Inc should be able to identify some of the substitute products in the market that may threaten its market share. For instance, iCloud which offers customers extra storage space may have its substitute as the external hard disk manufactured by firms such as HP. Although iCloud seems to be a better product than the external hard disk, there is a substantial section of the market that does not trust the security offered by iCloud, especially when it comes to managing their confidential information.
They would prefer a storage system that is exclusively internal and with no possibility of access by cybercriminals. They would, therefore, consider using the external hard disk. In such cases, Apple should consider coming up with a similar product for this conservative section of the market. However, Montiel (2011, p. 130) warns of a possible shift of technology that may render products of a firm substitute to the products in the mainstream market. The management should always be keen to monitor changes taking place in the market to avoid scenarios where its products are turned into substitutes. For a firm to avoid such cases, it should be part of the change in the field of technology. The management should ensure that it adopts the emerging technologies at a rate that is competitive enough in the market.
The last force in Porter’s list of competitive forces is always an advantage to a firm. This last force is the competitive rivalry between suppliers. When the suppliers are competing for the market share, firms that make their market are given bargaining power. They can use this power to negotiate lower prices from the firms. According to Andrzej and Buchaman (2007, p. 116), this rivalry should be fully exploited by the firms which form the customer base of the rivals by always trying to ensure that all the competing suppliers have equal strength. This scholar warns of the possibilities of allowing one of the suppliers to have a stronger power because this will create an avenue through which it can outsmart other competitors in the market. This may enable such a supplier to eliminate all other competitors, giving it sole authority to control the supplies. Creating an environment where there is only one supplier in the market gives the supplier authority to control the market price of the supplies.
This may be very dangerous as such powers would mean that such firms as Apple will be forced to buy the supplies at the prices set solely by the supplier. This may force them to charge their products at a higher value than their current market prices. For this reason, Gerber (2008, p. 75) advises that the management of firms in the market should make an effort and ensure that it can make the maximum out of the competitive rivalry between suppliers, while still ensuring that all the suppliers remain strong in the market to continue with the rivalry. Through this, Apple will be able to reduce the cost of production while maximizing the profitability of the firm.
The Future of the Electronics Industry
The future of the electronics industry is very bright, but as Ferrell and (2011, p. 48) says, it may be difficult to determine how successful an individual firm would be in this bright future. By the year 2006, Motorola was one of the most successful firms and it would be easier to tell that after one decade, it would be the most successful firm in the industry. However, this was not to be after only half a decade. The firm was brought to its humbling knees as its competitors flourished in this market. There is a massive change in the electronic industry over the past year. This is a clear indication that the future of this industry is very bright.
Emerging technologies have had a great impact not only on the products and production methods in this industry but also on the marketing approaches taken by these firms. The process of production has been made easier- and the products finer- marketing strategies have changed drastically over the past half a decade. Bissoondoyal (2006, p. 67) says that for a long time, mass media marketing was considered as the undisputed channel of marketing products in the market. In the year 2003, it would be difficult to convince Steve Jobs, the then chief executive of Apple Inc, that there is a better channel through which products of Apple Inc could be advertised other than through the mass media. However, this has changed with the emergent of social media. Social media marketing has proven to be very effective in marketing the products of a firm in a competitive market. Firms have come to realize that the best way through which they can reach the global market is through social media.
To the electronic firms, social media marketing is one of the best marketing strategies that have been developed in this century. This scholar says that Apple Inc is currently rated the firm with the highest number of adverts. Social media includes such platforms as Facebook, Twitter, YouTube, and LinkedIn among others. Facebook has a fan base of about one billion, and the number is expected to rise. Tweeter has a fan base of over 700 million while YouTube has a similar number of fans. This means that firms can use these platforms to reach a higher number of customers than when using mass media. According to Gountas and Mavudo (2008, p. 84), the majority of the market for the phone manufacturers are the youth and the middle-aged customers.
This scholar says that this group of persons does not have time to read newspapers where firms initially relied on to make their adverts. This group hates reading. This makes the newspapers an unreliable channel of marketing products to them. The radio and television are also becoming unreliable sources of advertisements. With iPods, the youths do not need a radio for they know that they will have a collection of music under their control. To them, radio has lost its meaning. This group rarely watches television as it used to happen about one decade ago. Instead of watching the popular soap operas, this group prefers watching their favorite movies on YouTube. Instead of watching the news on television, they rely on social media such as Facebook and YouTube to share the news that is specifically relevant to them. This means that the mass media is being alienated as a way of reaching out to the masses in the shortest period.
These changes have massively affected firms in this industry. According to Gountas and Mavudo (2008, p. 89), when a firm finds that there is a shift in the trends in the market, the best approach would be to change with the changes. This would be the surest way of ensuring that it remains competitive. Apple has shown its ability to change with the changing trends in the market. It has taken the competition a notch higher in its online marketing. The firm is currently using even Yahoo as another channel through which it reaches out to the customers. Viardot (2004, p. 38) warns, however, that this should be done with care to ensure that their adverts do not annoy the target audience. When the recipients of these adverts consider this communication as spam in their mail, they can develop a negative attitude towards the brand. This will give the opposite expectation.
Methodology
This chapter focuses on various aspects of research development. It consists of data collection methods, the analysis, and procedures of presentation. Every research project applies a certain research method to achieve its objectives depending on its goals. The methods used to research this project compared closely with the methods proposed in the project proposal. This was so because the project proposal had been proven to be workable. In research, design deals primarily with aims, uses, purposes, intentions, and plans within the practical constraints of time, location, money, and availability of staff.
In this study, respondents were briefed in advance. This was necessary to ensure that respondents were prepared psychologically for the task ahead. This would also help in ensuring that the response was given in time to allow timely analysis. The officials of Apple Inc were given relevant notice by the researcher. The study population was also amicably informed to get prepared for the study. The briefing was important because it could enhance the reliability of the study. It is also ethical to inform people before researching them. The findings were also made public to the researcher as one way of ensuring morality in the study. Furthermore, the researcher observed researcher-researched ethics by keeping away from criticism. This chapter also focuses on the literature review as one of the methods used in the collection of secondary sources of information. It gives the reason why the literature review was used as a method to collect data. The chapter gives an overview of the purpose of collecting and analyzing data and the basic questions used to gather the desired responses.
The chapter brings back the research hypotheses. This is important because it is at this stage that the researcher goes into the field to gather information. It is, therefore, necessary that the research hypotheses are brought to focus because they would be the guiding light in the process of gathering data (Anderson 2004, p. 119). The researcher would be trying to confirm the hypotheses. To eliminate criticism, the researcher clearly states the scope of the study. There are limits beyond which this research may not hold because of the method used in data collection and analysis. It is, therefore, important that limitations are clearly stated to make it clear to readers of this material how far this research reveals what it purports to.
Since the main method of data collection was the primary source, the questionnaire was the main instrument used to collect data. This chapter brings out the questionnaire format, reasons for choosing this format, its advantages, and disadvantages. In a research process, sampling is very important because a certain population can be too big to facilitate a study of the whole population (Hakim 2000, p. 17). This chapter discusses sampling theories, the importance of research design, methods of sampling- giving their advantages and disadvantages- and the determination of the sample size. Also discussed in this chapter is the data analysis technique. In so doing, the researcher hopes to bring to focus the channel through which data would be collected. This is not only meant to bring clarity to this research but also help young researchers who will be interested in furthering research in this field to know the steps necessary to reach the desired results in a given research. The researcher has ensured that the methodology is not only important to the professionals in the financial sector, but also other related sectors such as insurance, marketing, procurement, etc.
Quantitative research method
Quantitative research is a kind of study that utilizes figures to arrive at certain conclusions (Kothari 2004, p. 115). In this regard, the research will take the form of a survey, whereby the researcher identifies the sample and posts questionnaires to them. In this research, there was a need to compare the relationship between variables to establish cause and effect. The researcher was interested in knowing how different factors (independent variables) affected the performance of various electronics firms around the world (dependent variables). This demanded a method that would be objective and able statistically to generalize the findings. The quantitative method was found to be the most appropriate method to use in this research.
Quantitative research involves the systematic empirical study of a phenomenon by the use of statistical tools. Its main objective is always to employ mathematical theories and models in developing its generalization (Walizer 1978, p. 91). Therefore, the quantitative method would help in this research. It would enable the researcher to test the hypotheses put forth for validity and allow the use of a sample as a representation of the entire population. It would help the researcher to use the data to compare the performance of Apple Inc in this industry and compare this performance with that of other players in this industry. The quantitative method would also help in knowing if there is any relationship between external environmental changes in the electronic industry and the performance of individual firms.
Although qualitative methods were traditionally used in social science and would be appropriate in this research, it is not able to give empirical support for the research hypothesis. Qualitative methods explain why a given pattern of events has taken place the way they have. On the other hand, quantitative methods explain the what and when of a phenomenon. Ethnographic research and phenomenology as approaches to qualitative research would have been appropriate. Ethnography would help in the investigation of the culture of the global market, especially in the United States, Europe, and China (Walsh 1990, p. 67). Phenomenology would have helped investigate the realities of the firm under investigation and how it affected its operation. However, because the process may not empirically support the hypotheses put forward to help guide the research, it was not used in this research. Due to these reasons, the qualitative method was not employed in the research and the researcher opted for quantitative research.
Scope of Data Collection
Primary data for this research was collected from the employees of Apple Inc in the city of Markham located along 7495 Birchmount road. This data was collected with the help of a questionnaire. The scope of data collection was limited to the employees of this firm. This was because of the time that was available for the research. Because most of the employees Canadians, they clearly understood the social structure of the Canadian society and therefore, we’re in a position to respond appropriately to questions regarding the society of Canada. They also understood how this affected the performance of Apple Inc in this industry. The level of accuracy needed in this research would be achieved within this scope. Secondary data was gathered from existing literature about the electronic industry globally, and the activities of Apple Inc as our specific field of study.
Format for the questionnaire
Questionnaire design
As was explained in the proposal of this research, the data collection method was very important in helping arrive at the desired conclusion upon completion of this research. There will be two key methods used to gather information in this proposal. The first one will be through a questionnaire, which will be physically delivered to the staff of Apple at its branches in the city of Markham located along 7495 Birchmount road. The questionnaire will capture various attitudes of staff members of this firm regarding their opinions on the strategies of this firm. The second source of information for the research was on the literature on various aspects of marketing in general, and the operational activities that take place within Apple Inc in specific. The focus of the literature review was to find information on the application of motivation techniques within the workplace and also to determine the current state of research about the firm. The questionnaire has four parts.
The first part sought to capture the background information of respondents. The second part dealt with the demography and gender of the respondents. This is to ascertain the prevalence of views in various categories to ensure that if any differences came about, then they would be captured in their demographic space. The third part dealt with the academic credentials and work experience of the respondents. The motivation for this section came from the understanding that different sections of the population respond differently to issues, based on age and academic credentials. The fourth part delved into the specific issues relating to the firm as an institution under our investigation, starting from the understanding of the concept used to counter market challenges to the possible effects it would have on the employees and customers.
The questionnaire also employed a mix of open and closed-ended questions to capture different aspects of the issues studied. Open-ended questions were used because they give respondents more time to figure out their opinions, which would make them volunteer more information related to feelings, outlooks, and comprehension of the subject (Mouton 1990, p. 117). This would allow a researcher to understand the position of respondents as regards feelings. Open-ended questions minimize some errors that could have been created in the course of research. Respondents rarely forget answers if allowed to respond freely. Furthermore, respondents cannot ignore some questions because they must go through all of them. Open-ended questions generate data that can be used in data analysis by other researchers. In other words, they allow secondary data analysis. On the other hand, closed-ended questions are analyzed easily. That is why they were used in this study.
Each response can be coded for statistical interpretation. Nonetheless, closed-ended questions are compatible with the computer analysis package. The technique is more specific meaning that its answers are consistent in all conditions. This aspect is impossible with open-ended questions because each respondent is allowed to use his or her own words. Finally, closed-ended questions take less time to administer unlike open-ended questions, which are detailed hence time-consuming. The questionnaire will be sent to respondents using the drop and pick method. The researcher arrived at this decision after considering time and resources. The method is time-consuming but very effective. Furthermore, the method allows respondents to reflect on the questions and answer them accurately.
Moreover, the method is not affected by the respondent’s level of literacy. One big advantage of the technique is that there is an interaction between the researcher and the researched. This means that the respondent’s reactions are easily captured. Reactions are important because they give more information regarding the feelings of respondents. The literature collected provided information regarding various theories related to marketing strategies, which are spread across the last century. The body of literature availed some theories dealing with sampling and sample designs in the business world and performance issues in the context of human resource development in the electronics industry. Apple Inc fits well within this parameter. Finally, the literature provided information on the state of research on the field. Various researchers have conducted studies on various elements of social segregation and its effects on motivation (Mouton 1996, p. 73). This gave the study a sound academic backing and a strong basis for drawing comparisons and conclusions.
The use of the questionnaire made it possible to capture issues that are unique to this firm. This is because there was no accessible literature with the required degree of relevance to the subject matter of the firm under the study. The targeted staff would respond to the questionnaires, which will be physically delivered to them. The availability of staff influenced the choice of this method because this firm operates throughout the day and therefore it is not possible at any one time to find all of them in one place. Physical delivery of the questionnaire increased the accuracy of data collected as there was interactivity. After collection, the data will go through analysis, culminating the observations and conclusions.
The sampling method used for this survey
Some factors should be put into consideration when choosing the right method of sampling in any given research project. In this research, precision was needed. The best method that would lead to the desired results was stratified sampling. As stated above, this method is simple to use and it is appropriate when one intends to use data quantitatively (Anderson 2004, p. 52). The researcher settled on this method because the research population could be divided into subgroups for clarity purposes. The sample would then be divided into subgroups so that each group got equal representation. This would make it easy to capture the attitude of the respondents in this research based on their age, and experience in this industry.
Determination of the sample size
As stated above, in a study, there is always a need to have a sample population. This population will be representative of the entire population. The selection of this sample must, therefore, be designed in a way that would give the expected results. Generally, two constraints would help in the determination of the sample size: time and financial resources. Time is very important in determining the sample size. If a researcher has a lot of time to conduct the research, it would be appropriate to consider using a larger sample size. However, in case the time available for the same is limited, then the researcher would be forced to limit the sample size to be in a position to conduct the entire research process successfully. Another constrain is the available finance for the research (Hakim 2000, p. 19). The process of collecting data and its subsequent analysis can be very expensive. For this reason, a researcher would determine the sample size based on the available finance. In this research, the sample size was chosen based on the two constraints given above and other relevant factors that may influence the operations of the bank.
Methods of data analysis
Data analysis refers to the process of transforming raw data into refined useful information that can be of use to people. Hakim (2000, p. 31) advises that before settling on a method of data analysis, it is important to the approach to be taken by the research. The research can take a quantitative, qualitative, or categorical approach. This research took a quantitative approach. Depending on the type and accuracy needed, data analysis can take a simple descriptive form or a more complex statistical inferencing. The technique used in the analysis can be univariate analysis, bivariate analysis, or multivariate analysis. In selecting the appropriate method, a researcher should ensure that assumptions relating to the method are satisfied.
In analyzing the collected data, the researcher used appropriate statistical data analysis tools such as descriptive and inferential statistics in analyzing quantitative data.
About the quantitative analysis, Kothari (2004, p. 78) argued that the most commonly used sets of statistics include meaning, frequencies, standard deviation, median, and percentages. The researcher coded and entered the quantitative data into the Statistical Package for Social Sciences (SPSS version 20). Using SPSS, the researcher used cross-tabulation to compare economic performance, level of employee satisfaction, level of customer satisfaction, and quality of management practices between Apple Inc and other market competitors such as Nokia and Samsung. The researcher also used descriptive statistics such as mean, standard deviation, percentage, and frequencies to describe the properties of the target population. Further, the researcher used tables, figures, and charts to present the findings of the study. Because the research also entails a comparison of the performance of the firm under study and various other firms, the researcher employed correlational analysis to enhance clarity. Therefore chi-square tests were used to test the hypotheses. Inferential statistics like chi-square tests help to test whether the observed relationships between the variables are genuine or due to chance. The statistical significance level used in the research is 0.05 indicating whether the observed association occurred by chance in 5 out of 100 results. Chi-square is the most widely used measure of association in social science research, being suitable for use on nominal, ordinal, interval, and ratio data.
Findings
Chapter 3 discussed the methodology of this dissertation. In the methodology section, the researcher outlined the steps taken during data collection. It was made clear that data was collected through questionnaires, which were distributed, to the employees of Apple Inc. In total, the researcher distributed 100 questionnaires to the employees. In this part of the research, the focus was put on the analysis of the primary data which was collected from the respondents from the office of Apple Inc in Canada. The section is very important in validating the research. The results that will be obtained in this section will be closely compared to the result that was gotten from the review of the literature. It is the results obtained from this chapter that will help the researcher agree or refute the claims of other researchers in the discussion section below. Based on the results that will be obtained from this section, it would be easy to know how much the researcher agrees or disagrees with the theories and claims made by other authorities in this industry. The researcher started this section by analyzing the three research hypotheses.
Research Hypothesis
Research hypotheses are always important in helping a firm define the path to be taken in the research by hypothesizing the expected result. In this research, the following are the hypothesis that the researcher wishes to confirm through primary and secondary data analysis. The researcher used the result obtained from the questionnaire and fed the information on SPSS. The results were then obtained in the form of tables and figures as indicated below.
H1o. The changing technological environment has not had a positive impact on the electronic industry.
This was the first hypothesis of this research. The researcher intended to reject the null hypothesis by accepting the alternative hypothesis. The null hypothesis was holding that the changing environmental factors of technology do not affect the electronic industry. This argument would go against the principles of marketing which widely states that a change in the environmental factors would have a direct impact on firms operating within that environment. It would also go against the ideas given by the researchers whose works were reviewed in chapter 2 of this paper. The data was run on SPSS software and the graph below was generated.
The question that was used in analyzing this research was asking whether the respondents believed that the external environment had a direct influence on the performance of this firm and this industry in general.
The graph above shows that although the percentage of those who stated that the external technological environment had no impact on this firm was considerably many, the majority confirmed the fact that the external environment had a direct impact on this industry. To determine whether there is a significant impact of the external technological environment on this firm, a chi-square on equal proportions was applied using SPSS to help generalize the findings to a wider population. The findings are given in the table below.
According to the results given in table two above, it can be observed that the value of the chi-square statistic is 28.189 and its corresponding p-value is 0.000<0.05. Since the p-value is less than 0.05, the null hypothesis is rejected and it can be concluded that the external environmental factors have a direct influence on individual firms in the electronic industry. The following alternative hypothesis was accepted.
H1a. The changing technological environment has had a positive impact on the electronic industry.
The following research was the second hypothesis of this research. In this hypothesis, the researcher was trying to visualize a more competitive electronics industry in a near future, given the current competitiveness of the market, the high level of market entry by new players, and the increasing technological development witnessed in this industry over the past one decade. The researcher was, therefore, interested in rejecting the null hypothesis below using analysis of the primary data.
H2o. Given the current trend in the electronic industry, the future of the electronic industry does not seem to be more competitive.
The following graph was obtained from this analysis based on the question given.
As shown in the graph above, the majority of the respondents believed that the future of the electronics industry will be marred by stiff competition from various players that will be present in the market. The respondents affirmed the fact that there is a possibility that the number of firms existing in this industry may increase in a near future. The primary data indicated that there is a possibility of increased competition in the market in a near future.
From Table 5 above, it can again be observed that the value of the chi-square statistic is 176.972 and its corresponding p-value is 0.000<0.05. Since the p-value is less than 0.05, the null hypothesis is rejected and it is concluded that there is a possibility of high competition in the electronic industry in the future. This means that the alternative hypothesis below is accepted.
H2a. Given the current trend in the electronic industry, the future of the electronic industry seems to be more competitive.
In this third hypothesis, the focus was on the ability of Apple Inc to become the market leader in this industry. The motivation of this hypothesis came from the understanding that Apple Inc is one of the most innovative firs in this industry. In the review of the literature in chapter 2, several scholars had stated that if Apple Inc could diversify its markets to include the lower social class in the market segment, then this firm may have the capacity to overtake the two market leaders. The researcher wanted to confirm this claim using the primary data.
H3o. Apple Inc cannot overtake the industry leaders in the mobile phone industry despite its recent market strategies.
The data was run in the SPSS sheet and the graph below was obtained as per the question indicated.
To test whether there is a significant difference in the performance of Apple and the other market leaders and the probability of Apple Inc overtaking them, chi-square for equal proportions was applied using SPSS, and the findings are shown in Table 6 below.
From Table 7 above, it can be observed that the value of the chi-square statistic is 137.370 and its corresponding p-value is 0.000<0.05. Since the p-value is less than 0.05, the null hypothesis is rejected and it can be concluded that there is a possibility of Apple Inc overtaking other market leaders in the mobile phone industry given its recent market strategies.
H3a. Apple Inc can overtake the industry leaders in the mobile phone industry given its recent market strategies.
This hypothesis is therefore confirmed. As it is, should Apple continue applying its current strategies in the market, there is a high possibility that it may overtake Samsung and Nokia in the mobile phone industry? This is further demonstrated in the chapter below where the primary data is discussed alongside secondary data.
Discussion
The research questions
The analysis above, coupled with the review of the literature points out some facts about the electronics industry, and about Apple as one of the main players in this industry. It is apparent from the review of the literature that this industry has experienced massive growth over the past decade, especially due to the advancements that have been made in the field of technology. Technology has a direct relationship with the changes that take place in this field. The discussion above demonstrates that the electronics industry is actually at the center stage of technological changes. Any shift in technology will always have a direct impact on all the firms operating in the industry. The analysis points out the fact that a lot more should be done by the players in this industry to ensure that they remain competitive in the market. This research has responded to the research questions and research hypothesis effectively.
What are some of the environmental changes in the electronic industry within the last five years?
This question was given enough response in the review of the literature. It has come out clearly from the literature review that within the last five years, the electronic industry has experienced massive environmental changes that have redefined various activities carried out by the players in this industry. For instance, it has been confirmed that five years earlier, social media marketing was something absolutely strange in this industry. However, the current marketing in this industry is heavily reliant on social media marketing, with Apple Inc leading other firms in marketing their products through such channels as YouTube, Facebook, and Twitter. The research has also demonstrated that environmental bodies have become more concerned about the environmental degradation taking place due to the activities of various electronic companies. This has increased pressure for these firms to lower their level of emission into the environment. The analysis of the primary data in the above section confirms these facts.
What is the level of competition in this industry, and are there indications that this level of competition is here to stay?
This was the second question for this research. There is a strong indication that the level of competition in the electronics industry has reached very competitive heights. The review done on the available literature indicated that there is massive competition in the market for electronics globally. Although the number of countries manufacturing electronics, especially mobile phones, are very few and can be limited to just four (The United States, China, South Korea, and Finland), the volume of production is massive. China alone has over fifteen mobile phone manufacturers, most of which are focused on duplicating what other major players have produced.
This has seen this market become very competitive as it gets flooded with various players. The analysis of the primary data confirms the fear that employees of Apple Inc have on the issue of competition in the market. The individuals who were interviewed in this research confirmed the fact that the electronic market in its current form is very competitive. This means that these players must find a way of managing this competition in a way that would help in ensuring that they remain n the market. On the issue of whether or not this industry will remain competitive, both the primary and secondary sources of data in this research indicate that the competitiveness of the electronic industry is likely to get even stiffer. This is because, although a few firms, such as Motorola, have been ejected from their industry, a higher number of players get into this industry periodically.
With a focus on the selected firm, how are firms struggling to ensure that they remain competitive in the market?
Giving focus to Apple Inc as to the firm under study in this research, it is clear that firms in the electronics industry are doing everything within their reach to ensure that they become more competitive. Apple Inc has maintained a competitive outlook in the market. As both the primary and secondary data shows, Apple has been keen to ensure that it remains innovative in this industry as a way of managing market competition. This has helped in be very attractive to the market. This firm has also been struggling to ensure that it uses emerging technologies in its marketing strategies. The firm has embraced social media marketing as a way of boosting its brand and product awareness in the market. Apple is one of the firms that have been keen on niche marketing as a way of evading the highly flooded and very competitive electronics industry in the global market.
The research hypothesis
The research hypotheses have also been responded to effectively using the primary and secondary data. As witnessed in the analysis of data in the above section, the entire null hypotheses were rejected, confirming the alternative hypothesis.
H1a. The changing technological environment has had a positive impact on the electronic industry.
This was the first hypothesis in this research. As witnessed in the analysis of primary data collected from the employees of Apple Inc in this country, it was confirmed that the technological environment has had a positive impact on this firm. The respondents confirmed that the current state of this firm is far much better than it was ten years ago, and this is largely attributed to technological advancements. The respondents were quick to note that technology was the driving engine of this firm and that given the current trends it is most likely that this industry is set to advance further as the technological environment improves. In the literature review, it has been demonstrated that technology is a double-edged sword.
Depending on how a firm adopts the emerging technologies, it can either bring success or total failure to a firm. Some scholars have noted that technology can be very helpful if a firm understands how to adapt to it promptly. However, this technology can be a source of failure as well. The emerging technologies proved to be very challenging to Motorola. This firm was one of the leading phone manufacturers and distributors around the world. However, when the management could not adapt to the emerging technologies at a speed that was expected of it, the firm was rendered redundant in the market. The competitive forces in the market became too strong to bear. The management realized that it had to act with speed to relieve itself of the unfortunate situation, but as was witnessed, it was too late. The competitive forces had forced this giant firm out of the market slowly and surely. For this reason, technology will be of great help to a firm or can be the source of danger that may force a firm out of the market. Depending on the approach a firm takes with the emerging technologies.
H2a. Given the current trend in the electronic industry, the future of the electronic industry seems to be more competitive.
This is the second hypothesis that has been confirmed in the analysis of the primary data. The analysis of the primary data demonstrated that in the current market, there is stiff competition between the major players in this industry and the upcoming firms. The respondents that were interviewed stated that Apple Inc is facing serious competition in this market. Some of the major players giving Apple Inc stiff competition in the market include Samsung and Nokia. These two are the market leaders in this industry. They have demonstrated a high understanding of the market both in the developed and developing economies. The respondents were, however, quick to note that these major market players were not as much of a threat as the Chinese firms that are mushrooming into the market. These small firms are mushrooming at an unprecedented rate, and the established firms are at risk of losing their market share to them if they do not come up with proper management strategies.
The respondents stated that although these Chinese firms are not a real threat because they have not attacked the high end market niche that Apple Inc controls there is the fear of the unknown. The firm fears what would become of it should its market niche be attacked by these firms. This thought is shared by various other scholars whose literatures were reviewed in the research. Some of the scholars were quick to note that the biggest threat that a firm can ever face is the threat of the unknown. Some of the scholars stated that the trend at which electronics firms are mushrooming in China is worrying major players in this industry. They are left wondering what would become of them if their market share is attacked. Both the primary and secondary data confirmed the fact that the future of electronics industry is likely to be highly competitive. Firms in this industry are destined for a more competitive market as there is a sharp rise in the number of firms in this industry.
H3a. Apple Inc can overtake the industry leaders in the mobile phone industry given its recent market strategies.
This was the third hypothesis that was confirmed in this research using both the primary and secondary sources of data. According to the primary data that was analyzed, it was confirmed that Apple in has the capacity to overtake the two industry leaders if it can improve its technical skills both at the production and marketing stages. According to the respondents who were interviewed, although Apple Inc trails Nokia in the market share for phones, it is a fact that the income that Apple earns in this industry is higher than what Nokia earns. This is because Nokia sells to a larger market, but has cheaper products. On the other hand, Samsung has been able to outmuscle Apple Inc in the sale of phones because it sells in all the market segments. Samsung has products for the rich, the middle class and the poor. The strategies to operate in all the three market segments have seen this firm prosper in the market, surpassing Nokia which till then was the industry leader. The ability of Samsung to satisfy the entire market segment has been its main strength. Apple has the capacity to satisfy the lower end of the market.
This will not only help in increasing its market share, but also in increasing the profitability in the market. This segment that has always been ignored by Apple will be very enthusiastic to welcome Apple Inc and its quality brand. This argument is supported by the scholars whose works were reviewed in this research. Most of these scholars observed Apple Inc had a great capacity to gain more of the market share if only the management would be willing to fully exploit the potential of the firm. These scholars noted that the idea of only targeting the rich and the middle class was limited the scope of a firm with a huge potential. This means that if Apple were to consider expanding the scope of its market share, then it would be easy to capture a huge market share. The scholars have also stated that the approach taken by Apple Inc by overemphasizing on the American markets and ignoring the third world countries may not work well for it.
The capacity of the American market is increasingly getting constrained. On the other hand, these third world countries are experiencing a positive economic growth. This is an indication that in a few years time, these countries that for a long time have been considered as economically incapacitated will become very attractive markets. Letting other firms such as Nokia and Samsung control these markets may make it difficult for Apple Inc to penetrate when the right time comes. The time should come when this firm is well established in the industry. If Apple can consider these moves, then it would not be too difficult to become the industry leader in this market.
This research has clearly indicated that in the electronic industry, the idea of ‘too big to fall’ may not hold. There are various forces that emerge in this market that all the players must conform with. This is irrespective of the size of the organization or the number of years it has been in operations. Ignoring change in this industry may as well mean that a firm is considering the possibility of quitting the industry. This is because of the rate of competition.
The nature of competition demands that a firm should be able to understand the forces that are relevant. As Hooley (2008, p. 95) says, not all technological innovations that come to the market are relevant. Some of these technologies are very destructive when implemented. As such, the managements of different firms in this industry must be able to determine the appropriateness of the new technology before making any serious commitment. This may not only help the firm avoid unnecessary expenditure on its revenues, but it will also help in avoiding time wastage, misuse of labor and customer dissatisfaction that could arise when such a product is delivered in the market. The management of Apple Inc has a role to play in ensuring that it understands the emerging technologies, and that only the most appropriate of the emerging technologies are implemented. It is through this that it will be in a position to withstand market competition.
Conclusion and Recommendations
This research confirms the fact that the world is increasingly becoming competitive. The electronics industry has experienced massive competition within the past century. This is especially attributed to the fact that there has been a massive influx of companies in this industry. The research has shown that this is one of the most lucrative industries around the world. As a result of this, numerous firms have been attracted into this industry over the last few years, making it one of the most competitive industries in the world. Growth of this industry may be traced back to the periods after the Second World War. In this period, there was a conscious attempt to redefine technology, and there was an impressive result as firms tried to use technology to develop devises that would make life easier. The stiff competition that is witnessed in the current market traces back to those early years when this industry started receiving an influx of firms.
Traditionally, mobile phones were known to come from the United States, Finland and South Korea from such firms as Motorola, Apple, Nokia, and Samsung. However, China has strongly emerged as a country that embraces technology, and as a result of this, there are numerous firms that have emerged in this industry. Although these Chinese firms have not risen to be in the position to take market lead, their presences have redefined competition in this industry. For a long time, most of the mobile phone manufactures concentrated on the developed economies to market their products. The third world countries were not considered as of value to these firms. Such large electronic firms as Apple Inc gave a lot of emphasis on the American and European market. Realizing that there is a vacuum in the developing economies, these Chinese firms moved with speed to ensure that it was captured. They developed cheap products that were of very poor quality as compared to those of the market leaders. These products were warmly welcomed by the market that was yearning for these products. Realizing the potential of these markets, Samsung and Nokia moved with speed to acquire these markets. These two firms were successful in wrestling the Chinese firms of this market segment, and this explains the reason why they are at the top of this industry in market share.
Competition is very healthy. As was stated above, competition acts as a fuel that propels firms to higher heights. Every time a firm makes a move to manage market competition, it always comes up with better strategies that would positively transform the entire procedures it takes in the market. Samsung, Nokia and Apple have reached their current glorious positions because of the level of competition in the market. The market is very competitive, and firms are forced to come up with strategies that would ensure that they attract the largest market share. With the current choosy customers, it forces the firm to come up with management approaches that is geared to deliver higher value. However, it is important to note that competition can also be very dangerous. Very stiff market competition may force firms to come up with strategies that may injure their productivity. When a firm is forced to go beyond improving the service delivery and the product offered, then that level of competition may be considered destructive. This is especially when the firm is forced to consider such moves as price reduction. Price war forms the most destructive competitive strategy because it is always a sign of frustration.
It is always an indication that a firm has tried all possible means to gain competitive advantage to no avail. As such, the firm will be considering the possibility of cutting down its profitability as a strategy of being more productive. Of course this is not possible. There is no way a firm may consider cutting down the profit margin and consider this a means through which it would increase its profitability. It is not guaranteed that it will be able to attract more customers. When a firm takes such a move, there will be two negative consequences that may arise. As was shown in the review of the literature, the competitors may consider lowering their prices. This would result into a scenario where the sales remains the same, but at a reduced profit. Another scenario may be a situation where customers shy away from the firm for fear that the lowered prices could mean that the products quality is compromised. This would mean that the firm will have reduced profitability, due to lower sales and reduced profit margin per item sold.
These are some of the factors that Apple Inc should be aware of as it operates in this industry. It should be conscious of the fact that its current position may either be lost or improved depending on the approach it takes in the market. Apple is currently ranked third after Samsung and Nokia in this industry. It has been considered as one of the most innovative firms in this industry. This is a good starting point for Apple. However, just like the fellow American Motorola Inc, Apple Inc should ensure that it is not edged out of the market due to this stiff competition. As was witnessed in the case of Motorola, for a firm to be faced out of the market, it takes a little mistake for a couple of years. The respondents in this research, who are employees of Apple Inc, indicated that this firm has plans to expand its market share by giving more attention to markets outside the United States, Europe and China. Both the primary and secondary sources of data confirmed that with an appropriate strategy, Apple Inc has the capacity to outsmart the other giant firms which currently are the market leaders in the world. However, this possibility may remain in paper if this firm does not consider employing appropriate strategies in its operations.
As indicated in the literature review, whenever Apple Inc will make the move to try and outmuscle the other two market leaders, they will most certainly not stand and watch. They will act. They will try their level best to ensure that they fight the threat that Apple Inc will be posing. This means that this will be a battle, and the best fighter would carry the day. Apple must therefore, consider the following recommendations that would help it manage a possible lash backs that would come from its competitors.
Recommendations
The discussion above has clearly demonstrated the fact that the electronic industry is getting increasingly competitive. The players in this industry have a lot of pressure to come up with managerial strategies that would make them manage this competition. For Apple Inc to be able to match this competition, the following recommendations should be considered.
- The management of Apple Inc should embrace transformational leadership style when managing employees. This will help in maintaining employee motivation within the firm. It is a motivated group of employees that can help this firm achieve its objectives.
- The firm should further improve its innovative culture within the organization. It should continue providing the market with fascinating products that would continue thrilling consumers.
- Apple Inc should consider entering the market segment for the lower social class. They make the majority of people globally. This market segment has enabled Samsung and Nokia to have a larger market share in this industry than Apple. If Apple is to outsmart these two firms, this segment should not be ignored.
- The management of Apple Inc should closely monitor the emerging technologies, and apply them as might be necessary in the market.
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