Skilled management team who ensures all business operations run smoothly Innovative CEO who provides a clear and concise vision for the company No financial problems Manages its business on a geographic basis Several options of products for consumers to choose from Strong consumer loyalty Ability to reinvest cash flows in R&D to maintain cutting edge technologies Unique designs Simple and user-friendly products Highest stock price in the computer industry Stores allow consumers to have an immediate face-to-face experience with a direct employee of Apple Enter new emerging markets Allow for easier upgrades in hardware and software Extend warranty plans Increasing demand for iTunes not only in but also in movies and applications downloads Halo effect of iPhones and iPods Weaknesses Threats Priced at a premium compared to others Any economic downturns will significantly affect Apple since their products are luxuries High R&D expenses Dependency on Steve Jobs Lower priced goods, with similar quality Increasing competition: Apple’s success will attract more competitors to the industry Product substitution Have been involved in numerous legal battles, these have large costs associated and may lead to critical recognition An increase in illegal music downloads will reduce revenues of iTunes Uncertain global economic circumstances How well has Steve Jobs done as Apple’s CEO? Has he done a good job of performing the five tasks of strategic management discussed in Chapter 2? Why or why not? What grade would you give him? Steve Jobs has excelled in his position as Apple’s CEO. Soon after his “interim CEO” induction in 1997 he announced that Apple would begin selling software directly to consumers. This led to transform Apple into the third largest e-commerce site on the Internet. Immediately once Jobs became CEO he made began to restructure the company
through hiring a new board of executives, an aggressive marketing campaign and the first-ever alliance with Microsoft. Prior to Jobs Apple seemed to be going in a downward spiral, with little hope for sustainability. Steve Jobs has done an excellent job in setting a clear and concise vision for the company. He has implemented the most optimal strategy possible for his goals to be reached and has had strong communication with his stakeholders throughout. Since 1997, Steve Jobs has transformed the organization into the extremely successful business we know of today. The five tasks of strategic management are developing a strategic image, setting performance objectives, defining the strategy, implementing the strategy and evaluating the performance. In order for Apple to become the successful company it is today, they first needed to ensure their strategic management process was on the right track. Develop a strategic image: Steve Jobs was determined to make products that will appeal to consumers. Setting performance objectives: Jobs was determined to turn the company’s performance around. Defining the strategy: In order to turn performance around Jobs must sell products and minimize expenses to generate revenue and result in maximizing shareholders profits. Implementing the strategy: Jobs pushed for new products, made structural changes, enforced business discipline and hired a brand new skilled management team. Evaluating the performance: Using the financial ratio analysis we can evaluate that their cash flows have resulted in a sustainable future for Apple. Since Steve Jobs has done so well in developing and implementing a strategic vision for the company I would give him an A for his CEO performance. Jobs does an excellent job in communicating his visions to Apple’s stakeholders and making sure the actions he takes are in congruence with the goals of the corporation. His strategies will produce long-term benefits for all of Apple’s stakeholders. What are the chief elements of Apple’s strategy? How well do the pieces fit together? Is the strategy evolving? Apple uses numerous strategies to maintain a wide customer base. Using the value chain analysis we will determine which activities are most important to Apple and why. term