Apple Computer, Inc.; Maintaining the Music Business While Introducing iPhone and Apple TV
Roxanna Farris
Professor: Shereen Turner
Business Administration Capstone
October 29, 2011

Apple Computer, Inc.;
Maintaining the Music Business While Introducing iPhone and Apple TV
1. Describe key strategic challenges facing Apple Computer. The key strategic challenges will be focus around the company’s commitment to gain a competitive edge. Apple was not satisfied with the Apple’s Tunes Online Music Store which reached millions; they worked on capitalizing the market by the release of the personal computer. After the release of the personal computer and a change in management the public voiced the concern for a more compatible system (Hitt, 2011). Apple launched a new product and merged with another company with the intention of gaining a competitive edge. However, the results were less than favorable. So, a key strategic challenge was to change the sales strategy, making the Mac the “hub” of digital lifestyle (Hitt, 2011). Another challenge was to increase the profit margin, to outline the graphic location; that will be served, the needs of the customer, and how to satisfy those needs.
2. Describe the dimensions along which company success can be measured. Apple computer faced the challenge of Steven Jobs severing his relationship with his business partner, John Sculley. This separation was based on differences in business strategy and the direction in which to take the business. Job’s went on to partner with IBM and Motorola to produce the Power PC Chip (Hitt, 2011). One challenge for Apple was dealing with consumer demand for a compatible operating system, because the Macintosh ran exclusively on Mac OS a program which was not available on other computers. During the absence of Jobs he in turn started his own company called NEXT, which was later brought by Apple. The purchased was made in hopes of using the technology for future operating systems. Jobs’ returned to Apple to lead the company into a different more productive direction. As a result of this reunion, Apple released the iPhoto, iMovie, iTunes, and the iPod. In the process Jobs help with settling the dispute between Apple and Microsoft. Immediately following the dispute, Microsoft quickly made Office 98 compatible with the Macintosh System. Jobs introduced less expensive computers like IMac, IBook and PowerMacs aimed at lower income consumers as a way to gain more recognition in the market.
3. Describe the critical external and internal environmental factors that have strategic implications for Apple's future. The external and internal environmental factors include the economic factors such as funding, and revenue. To be successful it will require a company to understand the needs of the community, and clients. Apple must research the federal, state laws and regulation in order to stay legal. The strategic planning will address the long and short company goals needed to outline future business plans. A cost leadership strategy will ensure that Apple produce a cost effective product or services, which will increase the company’s profit. New distribution methods and techniques will lead to a company operating more efficiently (Hitt, 2011).
Another important strategy is the differentiation, which is the process of creating a product or service that is perceived as being unique "throughout the systems industry". This can be achieved with rapid production, outstanding customer service, technological leadership or anything that leads to a positive customer experience (Hitt, 2011). In addition, some of the conditions that should exist to support a differentiation strategy include strong marketing abilities, effective product engineering, creative personnel, the ability to perform basic research and a good reputation. A focus strategy deals with the product form and cost management process needed to target a competitive segment, therefore Apple will experience an increase in their profits margins.
4. Describe how Apple's strategy stands up against industry rivalry. The strategy used is low cost to drive the bargaining power of buyers and suppliers. A company must strive to reduce cost to a level that are lower than the competitors only then will the cost leader become efficient (Hitt, 2011). Apple should have the drive to re-invent its product and services before the rival companies. Low prices help a company to expand its customer base. The cost leadership strategy comes with two risks. One is the processes by which the production and distribution of good or service becoming obsolete when competitors’ innovations. Also, too much focus on the cost reduction can occur when trying to understand the customer’s perception (Hitt, 2011).
5. Describe the recommendations you would make to enhance the effectiveness of the company's strategy or to change its strategic approach for better results. Apple will need to continue implementing a grand marketing strategy for it products and services. This will ensure their ability to build a stronger global edge. A good marketing plan is the best way to out shine the rival competitors. Apple remains at the top when it comes to advertising their products to customers. They should continue to build a strong relationship with magazines, media and creating new relationships. It is imperative to the success of Apple that they continue to keep a competitive advantage, which will prevent its rival from duplicating their products and services. Always maintain a focus of a cost leadership strategy. This strategy will increase the effectiveness of the company’s strategy and boost the demand for their product. They must be prepared to offer something new and different at all times. Also, the need to employ highly skilled employees, cross training, job development, long term goals, staff empowerment and employment security will create an effective company strategy.
In order to enhance the performance of a company external environment it will need to have in place a strong strategic management, which deals with the intended and emergent initiatives taken by managers on behalf of owners, to enhance the performance of a company’s external environment. It involves outlining the organization's mission, vision and objectives, developing policies and plans, often in terms of projects and programs, which are designed to achieve these objectives. Next the company will need to allocate resources to implement the policies and plans, projects and programs. “Strategic management is an ongoing process that evaluates and controls the business and the industries in which the company is involved; assesses its competitors and sets goals and strategies to meet all existing and potential competitors; and then reassesses each strategy annually or quarterly to determine how it has been implemented and whether it has succeeded or needs replacement by a new strategy to meet changed circumstances, new technology, new competitors, a new economic environment., or a new social, financial, or political environment.” The results of creating a good strategic management plan and continue to expand partnerships will help to elevate Apple into the competitive global market in Japan.