Strategic Management

Introduction Strategic management is an approach to management that deals with diverse and distinct initiatives. These initiatives are taken by the management on behalf of shareholders to ensure that resources are properly utilized.Advertising We will write a custom research paper sample on Strategic Management specifically for you for only $16.05 $11/page Learn More In the long run, the organization will be able to perform well in its business undertakings (Ohmae, 1982, p. 17). It is done by outlining an organizations goals, vision, mission and objectives. This develops plans and policies that will be used to achieve specific goals and objectives through effective and efficient allocation of resources. Evaluation of an organizations performance is carried out through a good and balanced score card. Stakeholders’ expectations should also be considered for sustainability. In a broad perspective, strategic management is an involving activity that se ts goals and business tactics (Ohmae, 1982, p. 19). As a matter of fact, it provides the overall direction that an organization is expected to take for success. Strategic management can be used to enhance consistency in operations. This consistency will only be realized if organizational actions are executed as per the company’s expectations. In addition, strategic management will be defined by an organizations culture. This means that all stakeholders are supposed to be involved for efficiency. In this case, it should be an ongoing process that will control a given company’s operations (Juran, 1982, p. 23). Background Strategic management sets good strategies that can be used to asses various competitors. These strategies are later on reassessed to know if they have been successful as per the company’s expectations. There are various strategies that might need replacements to meet changes in the business environment (Juran, 1982, p. 28). This can be the economi c and political environment, new technology and new competitors. There are various approaches to strategic management depending on a company’s culture.Advertising Looking for research paper on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More The basic model of strategic management is the pattern that is used in strategic management (Traverso, 2000, p. 14). Companies are therefore free to choose a model that will work out for them depending on their organizational culture. It should also be known that there is no strategic management plan that can always be perfect. This allows companies to design their own strategic planning models. This should be done by frequently choosing models and then transforming them to suit an organizations expectation. Strategic management entails a calculated process in which the management of an organization intends to realize a strategy worth of implementation. This is done as per the o rganizations goals and objectives (Traverso, 2000, p. 34). In this case, there are steps that are supposed to be followed. For instance, the management should look at the company’s mission and objectives. This will enable them to settle on a good situation analysis thereby formulating effective strategies (Ohmae, 1982, p. 32). After this has been done, these strategies are supposed to be applied and controlled to ensure that they give the desired outcome. The company will therefore be able to get positive results by embracing strategic management. Strategic management formulation combines various processes. The organization should carry out a situation and competitor analysis. By doing this, it should look at the current business environment through self evaluation. After self evaluation and assessment, the company should outline its objectives. This involves tactical, business unit and corporate objectives. In addition, it should also craft out good vision and mission statem ents (Kearney, 1992, p. 43). In strategic formulation, the management will outline where they want to go as an organization. This can also involve other stakeholders for long term sustainability. The organization should know how to create value to customers by being flexible.Advertising We will write a custom research paper sample on Strategic Management specifically for you for only $16.05 $11/page Learn More In the process, they will be able to know if their strategy is sustainable. Strategic formulation modifies a company’s current business strategies. The formulated strategy should be effective in solving various organizational problems (Kearney, 1992, p. 49). These strategies should be practical to the organization and therefore easy to implement. Formulation should be feasible over a given time frame, not disruptive, cost effective and acceptable to all stakeholders. Strategic implementation is putting into practice what has been formulated . This is done by specifying assignments and milestones. Strategic implementation is very important as it forms the core of any business strategy (Crosby, 1979, p. 9). Implementation should be done through effective strategic measurement. Effective and efficient leadership is necessary in this stage of strategic management. For successful strategic implementation, organizations are supposed to manage various factors well (Traverso, 2000, p. 25). This includes action planning, organization structure, human resource, annual business plan, monitoring and control and linkage. Organizations should come up with good action plans that will define the implementation process. Enough financial resources are supposed to be availed to support human resource efforts for successful strategic implementation (Crosby, 1979, p. 9). Monitoring and control should also be enhanced to ensure that everything is on track as per the chosen business strategy. Objectives There is a very big relationship betwe en a successful business and effective strategic management. This is because strategic management allows an organization to lay out good strategies for its future operations (Traverso, 2000, p. 32). On the other hand, it will also be able to influence and initiate its own activities. In a broad perspective, companies are supposed to exercise control over their destiny. Strategic management is being used because of its importance in business operations. This can be seen in helping organizations to formulate better strategies.Advertising Looking for research paper on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Organizations have done this through logical, rational and a systematic approach to choice. The benefits of strategic management can be seen in both financial and non-financial perspectives. Financial benefits will be seen in enhanced productivity, high sales and profitability (Feignbaum, 1990, p. 15). On the other hand, non-financial benefits can be seen in various aspects. For instance, an organization will have a better understanding of competitor strategies. Strategic management also helps organizations to enhance their problem- prevention capabilities and abilities. In the process, they will be informed of threats that they are likely to face in the market. This will enable the organization to be ready for any unexpected changes that might arise in the course of doing business. Strategic management helps organizations to overcome any foreseeable problems. This should be done by looking at their business value to eliminate risks that may come about as a result of changing busine ss trends and environment. Businesses should not look at strategic management in terms of profits but they should view it as an avenue for value addition (Feignbaum, 1990, p. 19). It can also be used to redefine responsibilities in relation to existing management trends. Finding and analysis In recent years, many business organizations and companies have seen the urge and need to use strategic management because of the ever changing business environment. The current business environment is very competitive and demanding. Strategic management is therefore being used to assess competitors by setting strategies and goals that will be used in the market. This is why many organizations have been forced to come up with good strategic plans thereby embracing strategic management. Almost every business aspect requires strategic management for sustainability (Berry, 1995, p. 11). This has made businesses to change their perception on strategic management as a necessity for success. Companies have been using strategic management to ensure that their products gain considerable market dominance. Competition is always intensifying in the market place and this has seen many companies come up with plans to gain competitive advantage. This has been complicated by the unpredictable business environment that companies are exposed to. In a real market scenario, strategic management plans are formulated for implementation (Toffler, 1980, p. 24). After implementation, they are then reviewed to assess different outcomes. Companies are therefore advised to review their plans for sustainability (Reichheld, 1996, p. 13). The process of launching products requires a more positive approach to strategic management. Many companies have successfully launched their products thereby coming up with strong brands in the market (Traverso, 2000, p. 32). Others have not been successful and this can be seen from the recalling of products. For instance, Toyota has recently recalled more than 21 mil lion cars from the market. This can be blamed on poor strategic planning. Although strategic management has gained wide acceptance in real market scenarios, some companies have not succeeded in their approach. This means that there are various reasons as per to why strategic plans fail to make an impact as expected (Malcolm, 2000, p. 17). For instance, many organizations do not understand diverse consumer needs in the process of coming up with their strategies. In the long run, their efforts do not add value to customers. Inability to predict environmental reactions can lead to failure of strategic plans. In this case, organizations underestimate what competitors can do in relation to price wars and fighting for brands. Other organizations have not been able to obtain employee commitment. New strategies are supposed to be explained to employees for proper execution (Malcolm, 2000, p. 25). Poor communication has also affected the implementation of strategic plans. In such scenarios, there should be sufficient information sharing among various stakeholders. A strategic plan should be followed to the later. This means that there should be a follow through after initial planning. In addition, organizations are supposed to track progress against their plan (Quinn, 1992, p. 21). As much as strategic plans are formulated by the management, they are also supposed be fully committed. Conclusions and Recommendations Strategic management should be done through proper plans and policies. Evaluation of an organizations performance is carried out through a good and balanced score card. Stakeholders’ expectations should also be considered for sustainability. In a broad perspective, strategic management is an involving activity that sets goals and business tactics (Malcolm, 2000, p. 8). As a matter of fact, it provides the overall direction that an organization is expected to follow for success. Strategic management can be used to asses a company’s operations fo r consistency. This consistency will only be realized if organizational actions are executed as per the company’s expectations. In addition, strategic management will be defined by an organizations culture (Reichheld, 1996, p. 13). This means that all stakeholders are supposed to be involved for efficiency. In this case, it should be an ongoing process that will control a given company’s operations. Strategic management helps organizations to overcome any foreseeable problems. This should be done by looking at their business value to eliminate risks that may come about as a result of changing business trends and environment. Businesses should not look at strategic management in terms of profits alone but they should view it as an avenue for value addition. It can also be used to redefine responsibilities in relation to existing management trends. Effective strategic management takes a very important role in the success of a given organization. Therefore, for companies to compete well, they are supposed to embrace strategic management for sustainability in their operations (Feignbaum, 1990, p. 31). This should be done by involving all stakeholders. As a matter of fact, every stakeholder has his/her own expectations that are supposed to be fulfilled. Organizations should continually use strategic management to enhance their problem- prevention capabilities and abilities. Although strategic management has gained wide acceptance in real market scenarios, some companies have not succeeded in their approach. This means that there are various reasons as per to why strategic plans fail to make an impact as expected. For instance, many organizations do not understand diverse consumer needs in the process of coming up with their strategies. In the long run, their efforts do not add value to customers. Therefore, companies should ensure that strategic management is an all inclusive activity (Traverso, 2000, p. 43). Reference List Berry, L. (1995). On Great Service. New York: Free Press. Crosby, P. (1979). Quality is Free. New York: McGraw Hill. Feignbaum, A. (1990). Total Quality Control. New York: McGraw Hill. Juran, J, M. (1982). Juran on Quality. New York: Free Press. Kearney, A.T. (1992). Total Quality Management: A business process perspective.USA: Kearney Press Inc Malcolm, G. (2000). The Tipping Point. New York: Little Brown Ohmae, K. (1982). The Mind of the Strategist. New York: McGraw Hill. Quinn, J.B. (1992). Intelligent Enterprise. New York: The Free Press. Reichheld, F. (1996).The Loyalty Effect. Boston: Harvard Business School Press. Toffler, A. (1980). The Third Wave. New York: Bantom Books. Traverso, D. (2000). Outsmarting Goliath. Princeton: Bloomberg Press. This research paper on Strategic Management was written and submitted by user Kas0n to help you with your own studies. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly. You can donate your paper here. Strategic Management Introduction In every organization, there is need to have an effective strategic management plan. In the contemporary world, the need for an effective strategic management plan has significantly increased due to the increased level of competition in the market. The contemporary business world has been characterized with a very high level of competition, a fact that has increased the need to have effective strategic management processes.Advertising We will write a custom essay sample on Strategic Management – Apple Company specifically for you for only $16.05 $11/page Learn More Strategic management can be viewed as the process through which an organization formulates and implements critical decisions which plays a pivotal role in determining the performance of an organization. The ability of an organization to meet its long term goals is determined by its strategic management processes. Through strategic management, an organization can easily achi eve both its long term and short term goals. Most of the top performing companies in the global market usually have the most effective strategic management practices. Apple Inc has well developed effective strategic management practices. This has helped the company to retain a high level of performance. Apple Inc has managed to offer unique products in the market, a fact that has enabled the company to win a significant proportion of the market share. For instance, the company has managed to provide high quality products when compared to its competitors. It has also managed to develop a good relationship with its customers, a fact that has enabled the company to attract and retain a large number of customers. Apple Inc also consults high performing companies while seeking for outsourcing services, in the process, the company has managed to retain a significantly high level of performance. Apple Inc has utilized its available resources maximally, a situation which has also contribute d to its success. For instance, the company has highly productive and experienced personnel that have significantly contributed to the company’s high level of performance. The company also has adequate financial resources; which has supported perpetual research activities. Continued research has enabled the organization to maintain a high level of innovation. Through these priorities, Apple Inc has managed to develop a good reputation for quality products hence attracting many customers.Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More In the recent past, the market has drastically changed. More competitors are entering into the industry a thing that has resulted in risky price wars. In order to resolve this problem, Apple Inc has decided to expand its market so as to increase its level of sales. Description and Analysis of the Sector of Industry Apple Inc was founded in 1976 in Santa Clara in California. The establishment of the company was the contribution by Steven Jobs and Steve Wozniak. The two were led by the passion of developing a computer that was more user friendly than the existing computers. A couple of years after its establishment, the company recorded a drastic increase in the level of its sales. In 1984, the company made a major step when it unveiled Macintosh computer, which earned the company a great recognition. Since then the company has been engaged in innovations and development which has helped it in introducing quality products in the market. Apple is a multinational corporation with operations in a number of countries all over the world. The company is centred in the United States and it in involved in the manufacture as well as marketing of computers. The company has been in the industry for a long period where it has produced a wide range of computers. The company is involved in the production of products such as ipod, iPhones, and Mac intosh computers. The company is also involved in the production of other products like iPads. For instance, the company introduced a unique ipad2 which has recorded a recommendable performance in the market. Ipad2 has several features that make it unique from others especially those provided by its competitors. It is very thin and therefore it is more portable than the other products. This attracts a significant number of customers because most people do not like carrying gorgeous electronic devices. This product also has batteries that can last for more than ten hours. In other words, Apple has managed to introduce into the market high quality products hence winning a significant number of customers. The history of the Apple Inc can be traced back in 1976 when the company started at California. Since its establishment, the company has concentrated in computers. However, the company has done a significant work in the entire electronic industry.Advertising We will write a custo m essay sample on Strategic Management – Apple Company specifically for you for only $16.05 $11/page Learn More In connection to this, the company decided to omit the word computer in its name to Apple Inc that more describes its achievements not only in the computer world, but also in the entire electronic industry (Malhotra 2007). The company has a total of about 37,000 employees. The company maintains good working conditions for its employees while giving adequate attention to their motivation. This has helped in employee retention hence retaining competent and experienced personnel. Over the recent past, Apple has been widely known for its digital entertainment devises which are widely used all over the world. It has introduced a wide range of entertainment devices, which has recorded a high level of performance. The PC industry is characterized by a large number of players who operates in the industry. Apple Inc is one of the oldest players in th e industry. Since its entry many other companies have entered into the industry. This has affected Apple’s market share significantly since they intensify the level of competition in the industry. For instance, the market share for Apple fell by 8% in 1983. In the recent past, there have been negotiations requiring Apple to license the Mac OS. For instance, Microsoft and Bill Gates insisted that Apple should license Mac OS in late 1970s. However, Apple failed to license. As a result, Microsoft developed their operating system. PESTEL Analysis In every organization, it is important to carry out the PESTEL analysis in order to make critical organizational decisions. This analysis is of great importance to Apple Inc. For instance, this analysis enables the company understand Political, Economic, Social, Technical, Environment and Legislative factors which may have a significant impact on organization’s activities. Social analysis is of great importance to Apple Inc especi ally in the current contemporary competitive market. In order to interact with its customers adequately, Apple Inc has opened its own retail stores in different places around the world. Through their outlets, they provide repair services and collect the views of the customers at the same time. In the process, the company manages to improve the quality of services to its customers. Through environmental analysis, Apple has managed to understand its market networks. For instance, the company manages to understand the costs of locating its stores in various places. The company locates its stores in places where it minimizes costs and maximizes sales at the same time.Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More This has helped the company in maximizing its profits. Environment analysis also helps Apple in understanding the public opinion regarding its products. This information plays a pivotal role in future innovation plans. This is because innovations should be directed towards satisfaction of the consumer needs. Vision, Mission and Objectives Vision Over the past, Apple has recorded a recommendable performance through invention and reinventions. The company is committed in providing best computing experience to the users including educators, creative professionals, students as well as the other consumers from all over the world (Brainmass 2004). The company has managed to realize this by providing high quality software, hardware, and internet offerings. Mission Apple is determined at maintaining a secure and quality environment, safety, and health for its customers, employees and the entire community all over the globe. The company emphasized on the need for maintaining a friendly envir onment for the current as well as the future generation. In order to achieve this, the company has integrated all these aspects in its management practices to facilitate in realizing their vision. Competitors As already noted, the contemporary market for PC has become more saturated. This has increased the level of competition in the industry. There are several negative consequences associated with high level of competition. For instance, increased competition may result into price wars. This may threaten the performance of an organization. Apple’s main competitors include Hewlett-Packard, Dell, and IBM. Since Apple is involved in production of a wide range of products, it also faces competition from Microsoft in a range of areas in personal computer software industry (Malhotra 2007). The computer market has been characterized by high level of technological development both in software and software advancement. Therefore, there is a stiff competition faced to each of the manu facturers. Failure to innovate would mean a complete exit from the industry because consumers are seeking for computers which are up to date technological advancement. Through this management, Apple managed to revive its activities. The company later continued with value creation in the organization which led to a significant growth. Apple has a group of experienced and competent engineers who has played a major role in innovations and development of new ideas. Under Job’s management, the organization has managed to utilize these resources in order in the most useful ways. The company also has several retail stores which are operating in different parts of the world. This is another important resource which has helped in advertising as well as distributing the company’s products. Through its stores, Apple has managed to collect information from the consumers about their views on the product. This information plays a pivotal role in directing the future innovations. It would be the wish of an organization to produce goods and services that satisfies their needs. This information is therefore necessary in maximizing the level of consumer satisfaction. Through its stores, the company has managed to develop a good image and brand providing quality service to the customers. Over the past, many companies have failed in their effort to distribute their products through their own stores, but Apple has recorded a very good level of performance. Therefore, retail shops are a valuable resource to Apple since not many organizations has managed to realize this. Resources Capabilities Apple has a wide range of researches both tangible and intangible. In order for any organization to maintain a high level of performance in the market, there is need for adequate resources to facilitate the process of meeting various goals. One of the major company’s resources is based on its ability to maintain a high level of innovation. Apple lnc has managed to maintai n a high level of innovation in its products. This has been facilitated by its ability to conduct an intensive research. As a result, the company has managed to provide products which are up to date with technological development. This has been realized through teamwork which has encouraged the exchange of ideas among the employees. This has significantly contributed to the company’s ability to win and retain its customers. Apple has well developed networks and relationships in its operations. For instance, the company has a very good relationship with OEM partners. This has provided the company with an opportunity to outsource some of its manufacturing processes. As a result, the company has managed to produce high quality products. The company has also managed to reduce its operational costs. One of the most valuable resources to the Apple Company is Steve Jobs. Steve has recorded a recommendable level of performance in Apple under his management. The company recorded a dra stic improvement soon after he started managing the organization. For instance, when he discovered that the failure of the organization was as a result of the leaders during the period, he sacked them and made various adjustments. SWOT Analysis for Apple Inc. Every organization has its own strengths and weaknesses. Similarly, Apple Inc has several strengths and weaknesses. The company has a number of strengths that has significantly contributed to its success. On the other hand, its weakness undermines its effort to retain its high level performance. Strengths The company has enjoyed a stable line of product which is easy to use. Over the recent past, the company has integrated its operations with the Microsoft products and others have helped the company in developing a wide customer base. The company has managed to retain a high level of innovation. This has enabled it to introduce high quality products with more features. For instance, the company introduced ipad2 early this year. The ipad2 has come with a wide range of features which has attracted a wide range of customers. In addition, this product (ipad2) has a long life battery which can last for ten hours. This is a major improvement since most of the similar products have a low battery life. Apple Inc has also enjoyed financial stability. The company has adequate cash reserves, the fact which has helped the company in funding activities like research which fosters innovation. The company has also managed to retain a high level of innovation. This has been realized through continuous research and development. The management has realized the need for research in maintaining a continued innovation and development in its product. Therefore, a significant amount of funds is allocated to the research operations. Research processes has also enabled the company to improve the quality of its products with time. This has helped in increasing the level of customer satisfaction. Apple Inc has already developed a s trong brand. This has developed a strong relationship with its customers hence forming a stable customer base. The company’s products have a good reputation throughout the world. It is therefore even easier to market its products in the global market. In other words, a strong brand name has increased the efficiency and reduced operational costs in the company. It costs a lot in terms of financial and time resources for an organization to build such strong brand. Therefore, this provides a great opportunity for the company. In every organization, the working personnel play an important role in determining the performance of an organization. Some leaders can dip an organization into failure while others can promote success. Steve is one of the most important leaders who have been of great importance to Apple. Before he joined the company, Apple experienced hard financial situations which threatened its existence in the increasingly competitive market (Malhotra 2007). The compan y was also characterized with low level of innovation before Steve joined the management. However, soon after joining the company, he made drastic changes which led to changes in operations that encouraged innovation and fostering new ideas. Weaknesses Despite of wide range of strengths associated with the Apple Inc, the company has some weaknesses. These weaknesses has tended to threaten the company’s efforts to achieve its goals and realizing its missions. Apple Company has been one of the strongest players in the United States market. Over the past, the market has been faced with tight economic difficulties. Saturation of the U.S. PC market has even made things worse. The company is therefore forced to spend a lot of cash at the expense of increasing market pressures without strategic innovation integration. Opportunities Apple has several opportunities which form a room for further improvements. For instance, the company has the opportunity to develop its music player and itunes into mobile phone format (Datamonitor 2006). This provides a great opportunity to the company as it will help in expansion. Another opportunity for the company lies on the wide range of its wireless products. The demand of wireless products is expected to increase in the future. Therefore, the company will be able to increase its sales in the future. The market will expand and the company will be able to increase the number of its customers. Apple has positioned itself with the necessary resources in order to benefit from this growth (Datamonitor 2006). For instance, the company has managed to come up with a wireless technology known as Airport. Through this technology, the users can create computer network and enjoy the internet without necessarily having cables (Datamonitor 2006). Through the Airport technology, users can access a high rate speed at a radius of 150 feet from where the airport base is located. This opportunity will provide a good base for the companyâ€℠¢s growth. In March 2006, Apple’s market share in US for MP3 player increased to 78% from 71% in December 2005 (Datamonitor 2006). However, the company performance in the international market remained relatively lower. The company is planning to penetrate further in the international as well as the domestic market. This will help in increasing the company’s market share. Threats Apple Inc Company has been faced with several threats in its effort to expand its market share. One of the major threats that face the organization is strong competition. The company is faced with a very high level of competition in all its fields of production ranging from the software to hardware among other products. The industry is also characterized with a very high level of innovation which has led to introduction of new products in the market with performance, price, and feature competition. This competition has resulted into price wars. Some of the Apple’s competitors have lowere d significantly the prices of their products in an attempt to increase their market share. As a result, Apple’s financial status may continue to deteriorate since the level of competition is continuously rising. This leads to reduction of the profit margins. Another threat facing Apple Inc company is the slow down in Euro zone economy. This may be accompanied by a high level of unemployment. As a result, the level of spending falls because disposable household income is relatively low. A household bubble which may burst any time also poses a big danger to the economy. These economic uncertainties affect the level of spending negatively, a thing that has led to a significant cut down in information technology products. Strategy Diamond Analysis within Apple Company In the contemporary world, every organization has its own strategies aimed at realizing their individual goals. However, the most important things to consider are the effectiveness of these strategies. An organizati on may implement strategies that may be of little importance in a given situation. Therefore there is a need for preparations in order to have effective policies. Policy diamond contains various facets which include Arenas, Vehicles, Differentiators, Staging and Economic logic. The facet arena implies that the strategy must match the market arena. For instance, Apple Inc locates its stores in the areas where its customers are located. This helps the organization in maximizing its sales by utilizing the available opportunities while minimizing its costs. Differentiators are unique features of the firm. In this case, Apple has managed to manufacture both software and hardware. This differentiates the company from other companies. Through these differentiators, Apple is able to achieve positive performance (economic logic). Vehicles on the other hand help an organization in applying their strategy to reach their destination. Apple has been using internal development to realize its goal s. The company has intensified research which has helped in maintaining continuous level of innovation. Research helps in generation of new ideas and therefore promoting innovation. Business Strategy As already noted, Apple Inc has recorded a commendable performance over the past. An effective business strategy which the company has applied has to a greater extent contributed to its success. Most of the successful companies have managed to develop and execute effective business strategy. This can clearly be described through the strategic positioning model. It has been revealed that the main problem which Apple faces is competition. In order to overcome this problem, there is need for the company to have an effective strategic positioning. Through this strategy, Apple has managed to position itself among other organizations in such a way that it has managed to stand out from many. Apple’s strategic target is in broad industry and characterized by broad differentiation. Apple has managed to differentiate its product through innovation. This has been the main factor which has promoted the company’s success over the past. A good example is when Apple dominated PDA market when they introduced Newton in 1993. Later, the company introduced into the market iMac, which was a device that was easy to use. These were just some of the innovations which the company has developed. Through the strategy of the product differentiation, Apple has managed to reduce threats which are posed by a high level of competition. Although differentiation comes along with a cost, this costs acts as entry barrier to other companies. Corporate Strategy In its effort to maximize its performance and profitability, Apple has applied a diversified strategy in its production operation. Apple Inc is involved in production of both hardware and software. The company has managed to apply its wide range of competence to manufacture software and hardware that are compatible to maximize th e performance of their products. The company also has resources which are necessary for production of both software and hardware. Apple Inc is also involved in production of various computers. These include, iPhones, Pad, Macintosh and Apple TV among others (Baxter 2010). This has helped the company to make maximum use of its available resources. For instance, the company is able to distribute its resources in various businesses hence saving on costs. Each of the company’s business is focused with a number of product types. For instance, notebook and desktop are two kinds of products under Macintosh. Through such strategy, the company minimizes costs because various product lines can share resources. The products may also supplement each other. This strategy has significantly helped the company in maximizing returns. Competitive Advantage In the contemporary world where the level of competition is extremely high, the need for a high competitive advantage has increased. Organi zations with a high level of competitive advantage are mostly the top performing in their respective industries. Apple success can to some extent be attributed to its competitive advantage. For instance, the company has managed to retain a high level of performance while other companies face hard times. Apple has remained unstoppable while its competitors face difficult times. Since its development, Apple has managed to differentiate its products. This is unlike its competitors who are now struggling to differentiate their products. The company has managed to develop both software and hardware. This combination has improved the quality of their products because they can manage to develop the software which is most compatible with its hardware. The company is led by the principle that an organization that is serious about coming up with an effective software must also be serious in developing an effective hardware (Bajarin 2009). This is because in case one of these is not effective then the resultant performance will be poor. Therefore, in order to satisfy the needs of their customers, Apple Inc has managed to manufacture both the software and the hardware. This strategy has significantly enabled Apple Inc to maximize the value of its software. This strategy has also helped the company to win a significant proportion of the market share. For instance, the company has managed to make high performing software known as ilife (Bajarin 2009). This software is the best of the software used in creating music, DVDs, movies among other functions. In other words, Apple Inc has managed to handle successfully the production of both software and hardware. Many companies deal with either software or hardware. This combination is demanding and therefore most of these companies are forced to specialize in either production of software or hardware. This has undermined the value of their products since they have to rely on the products from other organizations for compatibility . For instance, a company specializing in production of hardware will rely on software from another organization. Therefore, it is a great opportunity for Apple to handle the production of both. Another Apple’s competitive advantage lies on its retail strategy. The company has come up with a strategy of coming up with its own retail stores. However, their idea to come up with their own retail stores was received with a lot of pessimism since many companies had tried and failed in this strategy before. Contrary to this conception, Apple did very well after launching its own retail stores. The main reason why Apple retail stores were success was because the company managed to identify the factors which contributed to the failure of many companies that attempted to open their own retail stores. The main reason why these companies failed was because of improper identification of best location or even lack of priority. Apple managed to make perfect decision on both cases. This has helped the company reduce its operational costs, a thing that has helped in increasing its profitability. Apple has emphasized on the need for good services for its customers. It has been extremely careful on how people buy its products. Apple authorized small shops where it ensured that they provided all Apple products and accessories. In addition, these outlets provided repair and support for the customers. By recognizing the need for quality service for its customers, Apple Inc has managed to maintain quality service for its customers throughout their market network. Close interaction with its retail shops has also enabled the company to build close relationship with its customers, a priority which most organizations in the industry have not managed to access. Previous research has indicated that most of the company’s customers prefer buying from the company’s stores (Bajarin 2009). This can be attributed to the quality services offered by these stores. Through the se arrangements, Apple Inc has managed to maintain an effective support strategy. By provision of repair services and support to the customers, it generates even more sales. For instance, the customers can shop for other products in the store as they wait for their repair to be completed. This interaction has also enabled the company to have direct conversations with its customer as well as their potential customers. This provides good information to the company for the future decisions. For instance, the products may be modified depending on the needs of the customers. VRINE Model The VRINE model gives an analysis of Valuable, rare, inimitable or non-substitutable resources that an organization has. The ability of an organization to access such kind of resources or products contributes in developing its competitive advantage. Apple has managed to differentiate its products through innovations. By maintaining continuous innovations in its products, Apple has managed to offer unique products in the market. This has helped the company in attracting and retaining a large number of customers. Through research and development, Apple has managed to acquire patents. This protects the organization’s contributions from imitation. Therefore, exploitation of such resources is restricted and therefore offers a great opportunity for the company. However, the industry has been faced by a very high level of competition, the factor which has forced the company to improve on its products to retain its customers. Apple has also managed to provide both software and hardware. This provides a good opportunity for the organization because it can be able to develop best compatible software for their hardware. Value Chain-CAGE Distance Framework Apple has a very successful value chain which has been characterized with a high level of achievements. Apple Inc distributes its market all over the world. Therefore, the company distributes its products to people from diverse cultura l, geographical, administrative, and economic backgrounds. This can be viewed in terms of cultural, administrative, geographic, and economic distance framework (CAGE distance framework). CAGE distance framework helps in identifying and assessing the impact of distance on various industries (Ghemawat 2001). For instance, the European economy is different from the American economy. The economic condition can significantly affect the performance of a product in respective markets. For instance, the economic downturn in the Euro region in 2005 led to unemployment and other economic uncertainties which led to cutting down of spending on electronics. This situation posed a major problem to Apple since the company’s level of sales fell significantly. BCG matrix Analysis The BCG matrix has been used by several organizations in their effort to realize their goals. The chart is mostly used to assist large organization like Apple Inc in making critical decisions on how to allocate their financial resources accordingly. The BCG matrix is very helpful to Apple Inc because it helps the organization in allocating resources in the best way. As already noted, Apple is involved in a number of businesses. For instance, it produces both software and hardware which is not the case with many organizations. Through the BCG matrix, an organization categorizes its business into units. These include stars, cash cows, question marks and dogs. On categorizing their business units, the business would then move its finance from cash cows to stars and question marks that have higher growth rates. For instance, Apple’s new products like Ipad2 have a high level of demand. Therefore, more money should be allocated in its production. Recommendations From the discussion above, it is clear that Apple Inc has recorded a commendable performance in the computer industry. The company has managed to provide quality services to its customers to the level which majority of organizations ha s not managed to achieve. The company has also managed to maintain continuous innovation. This has helped it to differentiate its products. However, the high level of competition in the industry has subjected the company to a big risk. The cost of production has also increased which has posed a threat to its financial stability. Therefore, there is need for the company to consider coming up with necessary measures to eliminate these threats. To start with, there is need for the company to consider production costs. This can be achieved by considering application of the most efficient methods of production, which minimizes their costs. For instance, the company may consider relocating some of its production functions in the regions where they can access cheap labour. It is also advisable for the company to consider formulating an effective knowledge management strategy. Knowledge management will help the company in improving the performance of its employees. When employees’ pr oductivity is high, the company will be able to reduce its average cost per unit production. This strategy will help in reducing the total production costs effectively. Knowledge management will also help in maintaining continuous innovation hence attracting more customers. It is also advisable for the company to consider intensifying its research activities. Research is the major key to innovation. Another way through which the company can overcome this problem is by increasing the number of its retail stores to allow their customers to access their products easily. This will also help in advertising the company’s products. By so doing, Apple Inc will manage to expand its market share despite the high level of competition. All these strategies will help Apple Inc in overcoming threats posed by increasing level of competition and increasing costs. Reference List Bajarin, B. 2009. Apple’s Competitive Advantage. Web. Baxter, K. 2010. Apple’s Mobile Future: Corpora te and Business Strategy. Web. Brainmass. 2004. Apple Computer Inc. Web. Ghemawat, P. 2001. Distance Still Matters: The Hard reality of Global Expansion. Web. Malhotra, H. 2007. Apple’s Success Is a Lesson in Corporate Strategy. Epoch times Washington, D. C. staff. Special Edition-August 2007. This essay on Strategic Management – Apple Company was written and submitted by user Angeline Bailey to help you with your own studies. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly. You can donate your paper here. Strategic Management Strategic Management Strategic management