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Margaret Lee

Monday 1-3
MGMT 449
Date: September 30, 2010

To: Apple Executives

From: Margaret Lee

Subject: Long Term Plans

Apple Computer was founded by Steve Jobs and Steve Wozniak in April 1, 1976. However, in
2007, Apple Computer Inc. dropped the word in its name and became Apple Inc. This action is a
remarkable milestone which indicates that Apple was no longer just a computer company. They
have moved into digital music, with the iPod and with iTunes, and mobile devices, with the
iPhone.

Apple is really involved in two businesses: the computer market and the entertainment and media
market. Their approach is to integrate its new products around its core industry in an effort to
construct a digital lifestyle that encompasses not only its line of computers but its new products
such as the iPod, iPhone and online services such as iTunes.

Key forces in the general and industry environments that affect Apple’s Choice of Strategy

Apple’s general external environment have some key forces to consider and understand. These
forces are economic and global, sociocultural and demographic, and technological forces. These
are the affects and the ability of the firm to get its product to market and sustain sales.

By looking at the demographic, Apple has to understand that the younger generation are more
tech savvy and welcome new changes as to the Baby-boomers maybe open to the idea but will
not pick up on the technology as fast.

Sociocultural is defined to be relating the social and cultural practices, beliefs, and traditions
within a particular society. Today, we live in a society where the consumers know exactly what
they want and do not want. For example, when we purchase an item made from Japan; there is
already a belief that the product is high performance and will last long.

With the popular growth of the technology it has made the Internet a huge new market for
opportunities. These new opportunities help makes the daily life easier whether if it is a speeder
deliver or a new way to manufacture an item with half the material like the new water bottles.
However, when dealing with technology there is always a factor of risk to keep in mind. You
may not want to constantly update way to fast or update way late compare to the rest of the
society.
Margaret Lee
Monday 1-3
MGMT 449
Internal resources and assets Apple have to give a competitive advantage

The competitive advantage Apple has is in their Value Chain. A Value Chain is consist of
inbound logistics, operations, distribution, sales and marketing, and service. According to Porter
in order to gain competitive advantage, the five areas of the value chain will need to meet. Apple
executes the value chain perfectly in all five areas.

With Apple’s success, their financial resources are well funded when it comes to the research
and development. Technological wise, Apple is the biggest human resource that is capable to
motivate creative employees. This results Apple to be able to keep up with technology
innovation. As an organizational stand point, Steve Jobs has strategically focused on the digital
lifestyle that he has created. These are the tangible resources Apple has. For the intangible
resources it is the innovation and creativity that Apple as a whole company has as a major
strength. The reputation is one of Apple’s most important strength and one that Apple is well
known worldwide. The important factors to focus on here are the importance of resources such
as innovation and reputation.

Apple’s Core Competencies

Core competencies are defined as learning in organizations. What this means is how to
coordinate diverse production skills, integrate multiple streams of technologies, and market
diverse products and services to create value. A main point in core competencies is that it must
create a quality of customer value.

Core competencies consist of cost leadership, differentiation, and focus. Apple’s cost leadership
is the computer industry in which a market share can grow but only to an extent. This is
different from price leadership. Cost leader companies compete on price and are very effective
in having low cost structure and management. Apple has contracts with certain suppliers for
price breaks and guarantee inventory.

Apple’s original strategy was to be “different.” This strategy still implies to this day for all the
Mac/Apple consumers. Not only is the physical aspect of the product different and slicker than
the competition products, but even their operating system is different as to your normal Windows
operation system or Linux.

Apple’s focus is developing easy-to-use technology for individuals. Their focus on innovation
strategy has shape the technology to the customer’s needs, instead of forcing the user to apt to
the technology. Apple has a philosophy of understanding the purpose of the design and to create
things that benefit people.

Understanding and developing the core competencies is all about focus, recoginizaing the
uniqueness that is valued by your consumers, how the competitors will not be able to duplicate
the product/service, and know your market demographic as to marketing and targeting everyone
and everything.
Margaret Lee
Monday 1-3
MGMT 449
Steve Jobs’ role in Apple’s strategic management

Steve Jobs’ role in Apple’s strategic management is a knowledge creating company with focuses
on reinventing the market as much as reinventing the company. They have established the
reputation for innovation.

Leadership is the process of transforming organizations from what they are to what the leader
would have them become. This would involve setting a direction, designing the organization,
and nurturing a culture dedicated to excellence and ethical behavior. Steve Jobs’ vision and
leadership is seen through the firm.