Strategic Management Assignment – on Apples competitive market advantage

Question

Task: how to assess Apples competitive market advantage using Strategic Management Assignment research techniques?

Answer

Introduction
The Strategic Management Assignmentreport analyses and evaluates the competitive situation of Apple Inc. in the Australian smartphone industry based on its own strategic objectives in alignment to its mission, vision and values. The competitive environment in the smartphone industry in Australia has been determined as well and contrasted against the resources and capabilities of the organization. Finally, the strategic issues that company need to address has been identified based on its own strengths and weaknesses.

Organization Background
The chosen organization in the Strategic Management Assignmentreport is Apple Inc. which is a leading multinational technology company in the world currently headquartered in California, US but operational presence across the world. In terms of revenue, Apple is the largest technology company in the world and the second-largest mobile phone manufacturer. The company has over 521 retail stores in the world with 22 stores in Australia which initiated from the launch of the first store in Sydney in June, 2008 (Apple Newsroom2008).

Industry Context
The Australian smartphone industry is heavily dominated by Apple and its main rival Samsung although the former is holding its market leader position for quite some time. Industry estimates indicate that the number of smartphone users are expected to reach over 22 million by 2023 with almost 86% penetration rate. iOS devices in Australia have the largest share of mobile web traffic while Apple is the leading mobile device vendor in 2022 with 57.25% of market share.

Existing Strategic Objectives and Future Recommendations
The corporate mission statement of Apple identified on this Strategic Management Assignmentis directed towards providing the best personal computing products, support and user experience to students, designers, educators, businesspersons and other consumers across the world with the help of innovative hardware, software and services (Rowl, 2015). It is quite evident from the mission statement that the company embraces the changing business environment and is willing to make a proactive effort to utilize the future possibilities. Recognizing the trends in consumer electronics market and changes in the industry environment in Australia has helped the company maintain its market leadership position for the past decade. On the other hand, Apple’s vision statement has always been strongly focused on making the best products while also making the world better. The corporate vision of the company has been aligned with its CSR strategy which centres around environmental conversation, sustainability and ecological impact of the organization. Since the days of Steve Jobs, the “Think Different” campaign has acted as the forefront of its core values and has also influenced its marketing strategies (Think Marketing 2018). However, the core values that Apple maintains across all of their operational markets are much more fundamental and embedded in their corporate culture. Some of these include healthy respect for well-being, making personalization more personal, keeping the process clean and green through environment and supply chain innovation and encouraging the growth of roles into careers (Apple 2022). Apple has also rooted from the bridging of varied cultures making it a hub for employees from diverse background.

The current strategic objectives of Apple in the Australian market observed on this Strategic Management Assignment are majorly directed towards three core areas that consists of its renewable energy project, growth in coding opportunities and support for the indigenous community. It is quite evident that the company has been able to align most of their strategic objectives in Australia with their mission, vision and values where sustainability, green energy, accessibility and career building and diverse work culture has been prioritized. The ambitious goal of Apple to become carbon neutral by 2030 can be considered a major step towards its core value of environmental sustainability. However, their purchase and investment in Upper Burdekin Wind Farm is yet to become operational and would begin in 2026 (Apple Newsroom (Australia)2022). It can accelerate its strategic goal by gradually shifting the energy source for its entire supply chain to clean energy. The future plan to launch Apple Foundation program in 2023 is directed towards supporting the innovation economy of Australia. However, this scope to expand coding opportunities is directed towards iOS app economy alone. Apple need to make their App Developer Foundation programs much more versatile in terms of coding practices to ensure jobs for engineers, designers, creators and coders in all forms of technology components.

Strategic Management Assignment -Competitive and Industry Environment
Currently the mobile connection user base in Australia is at 31.8 million while the number of smartphone users is around 23.6 million. Heavily dominated by Apple as the market leader and followed by Samsung, Oppo and Huawei, the iOS market in Australia looks quite promising with plenty of opportunities to expand. In order to determine the competitive environment of the Australian mobile phone industry, Porter’s Five Forces analysis have been created.

Porter Five Forces
Bargaining Power of Buyers (Medium): The main purpose of smartphone users in Australia is for communication that includes social networking, voice calls, emails, video calling and instant messaging. Although Apple still holds the leading position as smartphone vendor in the Australian market, there are a high number of substitutes of the iOS with Samsung, Oppo and Huawei running android in their devices that are more user-friendly and cheaper as well. As the other companies are investing aggressively in marketing for retaining customers, it has allowed customers to gain considerable power. The Strategic Management Assignment research shows the market share of Samsung has increased from 24.5% to 27.78% in the last year indicating the effectiveness of their marketing strategy and R&D investment (Granwal,2022).

Bargaining Power of Suppliers (Weak):The smartphone industry is controlled heavily by the vendors themselves as most of the components are manufactured in-house. Apart from Google which provide Android OS, most the suppliers are small players that provide the minimal components. Due to presence too many suppliers with similar supply chain capacity and quality control, they have very little bargaining power over the smartphone vendors.

Threat of New Entrants (Weak):Although the threat of new entrants in the global smartphone industry is moderate, the Australian market is dominated by Apple. With more than half of the market share covered by Apple, the remaining big players like Google, Huawei, Oppo and Samsung take up only 35% combined leaving room for only 1.05% for unknown brands (Statcounter 2019). This indicates that new entrants would need to gain considerable market share and develop similar level of brand image to pose any threat to Apple.

Threat of Substitute Products (Moderate):The Australian smartphone industry is quite different from the global average as the most dominant brand Samsung is lagging way behind Apple in terms of market share. Despite the user-friendly features, extensive range of models and cheaper pricing, iOS has maintained its popularity over android counterparts. However, over the past decade android have been gradually gaining popularity with increase from 4.23% to 38% market share from 2011-2022.

Competitive Rivalry (High):the Strategic Management Assignment research shows as the device penetration rate has reached to 86%, the demand for smartphones have plateaued in the last few years and the key focus has been shifted to R&D, marketing, innovation and customer retention. The main competitor of Apple in the Australian market identified on this Strategic Management Assignmentis the global leader Samsung with Chinese and Korean brands like Xiaomi, Oppo and Huawei slowly catching up. While Oppo and Xiaomi are implementing aggressive marketing strategies to attract customers, Samsung and Huawei are investing heavily on R&D and innovation to retain their customer base. The $11.6 billion mobile phone and tablet industry in Australia is expected to grow by 5.6% in the next year, making competitive rivalry all the more intense (ibisworld, 2022).

Resources, Capabilities and Competitiveness
Apple has always dominated most of the markets based on its strong differentiation strategy that has been strongly reinforced by its internal resources and capabilities. The competitive advantage of Apple can be pointed to its unique design capability, innovation capability and powerful brand image that has also made it the market leader in Australia (Maet al., 2020). The VRIN framework has been used to address the key points related to Apple’s competitive position in the Australian region.

VRIN Framework

Among the various long- and short-term resources and capabilities of Apple, rapid innovation, green energy programs and premium brand image are the key focus in the Australian market. The hight rate of innovation at Apple has enabled them dish out notable hardware devices like the iPhone which is the most popular Apple device by far (Karen,2022). The 2030 climate goal with its subsequent purchase of clean energy from wind farms and investment in renewables have earned them the consumer trust and reputation required for boosted sales and higher market share. Apart from this, Apple has a global presence which adds in to their brand name and makes it easier to attract and retain customers as compared to the other new players in the market.

Competitive Situation of the Organization
A Strategic Management AssignmentSWOT analysis for Apple has been conducted as well to determine the company’s internal strengths and weaknesses and also the potential competitive deficiencies and opportunities that the company can leverage in the Australian smartphone industry.

SWOT Analysis

Critical Strategic Issues and Resolutions
The critical analysis of internal competitiveness and external business environment of the Australian market indicate that the android-based competitors like Samsung and Oppo are gradually catching up to Apple’s market share. Currently, Apple lacks any strong and aggressive marketing strategies, digital or otherwise, to counter its main business rivals. Setting up an iAd advertising program like that in the US and Europe would help Apple address the growing threat and attract new potential customers (Oliveira, 2022). Apart from this, Apple needs to address the growing demand for cloud-based services that goes hand-in-hand with the mobile devices. While companies like Amazon and Google are leading this front, Apple needs to ramp up its iCloud services in the Australian market.

Strategic Management Assignment Conclusion
It is quite evident from the report that Apple has a considerable hold in the Australian smartphone industry primarily due to its global brand image and technological innovation. However, despite its current market leader position, there are some major strategic issues that company needs to address over the next few years to meet customer demands and market trends. It is recommended on this Strategic Management Assignment that due to the competition soaring in the industry, Apple needs to rely on its resources and capabilities to make effective strategic choices to maintain its competitive position.

Reference List
Apple 2022, Shared Values - Jobs at Apple, Apple, www.apple.com.
Apple Newsroom (Australia) 2022, Apple marks 40 years in Australia with new commitments to protect the planet, Apple Newsroom (Australia).
Apple Newsroom 2008, Apple’s First Retail Store in Australia Opens in Sydney on Thursday 19 June, Apple Newsroom.Strategic Management Assignment
Apple Newsroom 2022, Apple expands the use of recycled materials across its products, Apple Newsroom. Gehani, R.R., 2016. Corporate brand value shifting from identity to innovation capability: from Coca-Cola to Apple. Journal of technology management & innovation, 11(3), pp.11-20.
Granwal, L 2022, Australia - smartphone vendors market share 2019, Statista.
ibisworld.com 2022, IBISWorld - Industry Market Research, Reports, and Statistics, www.ibisworld.com, viewed 17 November 2022, . Karen, S 2022, Apple maintains hold on Aussie smartphone market, www.arnnet.com.au.
Ma, G, Wu, H, Qiao, Y & Wang, D 2020, ‘A Resource-Based View on Sustaining Competitive Advantage: A Case Discussion’, International Journal of Innovative Research and Development, vol. 9, no. 10. Oliveira, I.D.S., 2022. Analyzing the sustainability of apple’s competitive advantage (Doctoral dissertation).Strategic Management Assignment
Rowl, C 2015, Apple Inc.’s Mission Statement and Vision Statement (An Analysis), Panmore Institute. Statcounter 2019, Mobile Vendor Market Share Australia | StatCounter Global Stats, StatCounter Global Stats.
Think Marketing 2018, Have you ever read about Apple’s core values? | Think Marketing, Think Marketing.Strategic Management Assignment