Case Study on "Strategic Management Cycle"

Case Study 18 pages (2741 words) Sources: 18

[EXCERPT] . . . .

4% to $94.61 on Wednesday (1/27/2016) morning (Shan, Tracy, & Paresh, 2016). The company's market capitalization reached a high of about $770 billion in February 2015. From there it roughly plateaued until July, after which it began to drop more or less steadily. It now stands at about $525 billion, meaning the company has shed $245 billion in paper value in less than a year (Oremus, 2016).

The stock market in general has taken a hit lately due to low oil prices among other factors. However, most investors pointed to the declining sales of many of Apple's products as the driving force behind their stock performance as of late.

"They are going to face a challenging year because the previous year was so strong," Tavis McCourt said of Apple. "I'm a little surprised the stock is underperforming today, given how well publicized the iPhone weakness has been the last few months (Shan, Tracy, & Paresh, 2016)."

Beyond just the lackluster iPhone sales, there have been a series of macroeconomic conditions that have really tested Apple's strategic management. For example, smartphone sales in China have previously a major growth market but recently sales have stagnated due to China's economic downswing. Furthermore, the U.S. dollar is currently strong when compared to other currencies and the exchange rate has effectively driven up the price of Apple's products in foreign markets for consumers.

However, many of the analysts do seem to make valid points in regards to Apples current operation strategy. Whereas it may make complete sense for a car manufacture like Toyota to make slow and steady incremental progress in a continuous improvement program that has been utilized for decades now, Apple is in a completely different industry that plays by a different set of rules. Apple was previously known as one of the best examples of innovation and successfully utilizing its strengths from a strategic management perspective, its current level of innovation has not included the same types of market breakthroughs as their previous generation of products such as the iPod, the iPhone, and the iPad. By comparison, the Apple watch and Apple TV are products that are not that impressive and already have meet with a slew of competing products. Therefore, this has led many to question whether Tim Cook is as capable with strategic management as former CEO Steve Jobs was able to do.

Module 2 - Environmental Analysis

The PEST (PESTEL), Porter's 5 forces, SWOT, and other strategic management tools are definitely useful to all businesses, yet to a different degree depending on the size of the organization, circumstantial factors, and the industry that operate within. For example, a company such as Apple or Comcast will undoubtedly be more susceptible to macro level environmental factors that the local mom and pop organization that operates around the corner. However, mom, pop, and their business are still affected by these macro variables to some extent and some cases they could potential even be more vulnerable to them under a specific set of circumstances.

One example of situation in which mom and pop might be put out of business altogether because of macro-economic and macro level changes in the external environment could be a related to a technology that has been replaced by a new product or platform. For example, small businesses that sold 8-track audio tracks and equipment that was replaced by cassette or someone who specialized in processing Kodak film when digital technology largely replaced the value of these services. Some local business could be virtually devastated by certain changes in the macro environment which directly affects them. Thus even small businesses could benefit from considering factors in the macro environment and trying to determine how these trends could affect their operations and value to the local community.

However, despite the potential for small business to be impacted by macro trends, it is reasonable to suspect that these trends generally have less influence on small to medium sized businesses than they do on major corporations such as Apple or Comcast. Comcast could serve as a prime example given the fact that political factors could potentially influence their primary operations. For example, as mentioned previously in this module, if the FCC successfully implements their plan to standardize TV receiver boxes, then Comcast will be directly affected by these regulations and likely lose a significant portion of their annual revenues. Although a local business might also be influenced by local political bodies, it would difficult to imagine a situation in which such a relationship would parallel the tense association between major cable providers and the FCC.

There are other categories in the PESTEL forces model that could also be less influential on small businesses than in most corporations. For example, the legal, technological, and environmental categories might be less of a concern for small businesses by in large. Although many small businesses do have legal concerns and occasional seek advice from local professions for counsel on some issues, most major corporations will have a dedicated legal team that plays an integral role in determining strategic management. For example, with regard to intellectual property and other legal matters, a large corporation may have to navigate countless layers of legal and bureaucratic obstacles to determine if their strategy is consistent with all laws and regulations that govern their particular industry. Even still the largest corporations often face many legal challenges such as in the case of Apple and Samsung continually battling over many disputes over intellectual property.

A family could also be considered a type of organization on a smaller scale relative to business and could likely benefit from the application of strategic management tools. For example, parents could scan the external environment to attempt to determine the likelihood that their children's career path represents a profession that will be demanded in the future. If they analyzed the career opportunities that are present in the job market, they would likely determine that a degree in some healthcare profession would likely be a more financially practical choice than a degree in philosophy. However, the SWOT analysis that focuses more on a micro level would likely be more valuable and relevant to strategic planning on family level than the more abstract macro level.

References

Alleven, M. (2014, December 8). Muni Wi-Fi 2.0: This time, cities are getting smarter. Retrieved from Fierce Wireless: http://www.fiercewireless.com/tech/story/muni-wi-fi-20-time-cities-are-getting-smarter/2014-12-08

Atkins, R. (2007, June). The Case for a National Broadband Policy. Retrieved from The Information Technology and Innovation Foundation: http://www.itif.org/files/CaseForNationalBroadbandPolicy.pdf

James, M. (2016, January 27). FCC chief proposes freeing Americans from getting pricey set-top boxes from TV providers. Retrieved from Los Angeles Times: http://www.latimes.com/entertainment/envelope/cotown/la-et-ct-fcc-cable-box-proposal-20160127-story.html

Kalb, I. (2016, January 27). Is Apple Becoming More Like Toyota in Its Approach to Innovation? Retrieved from HuffPost Business: http://www.huffingtonpost.com/ira-kalb/is-apple-becoming-more-li_b_9085164.html

Kosoff, M. (2014, November 17). New York City Has A New Plan To Give Everyone High-Speed WiFi Internet Access For Free. Retrieved from Business Insider: http://www.businessinsider.com/new-york-citys-linknyc-wifi-plan-2014-11

Oremus, W. (2016, January 27). Peak Apple: The world's most valuable company may already be in decline. Retrieved from Slate: http://www.slate.com/articles/technology/technology/2016/01/apple_may_have_peaked_in_2015_gulp.html

Segan, S. (2016, January 20). LinkNYC Wi-Fi Hotspots Tested: They Crush Starbucks. Retrieved from PC Magazine: http://www.pcmag.com/article2/0,2817,2498177,00.asp

Shan, L., Tracy, L., & Paresh, D. (2016, January 27). Apple stock dives after iPhone sales' growth slows dramatically. Retrieved from Los Angeles Times: http://www.latimes.com/business/technology/la-fi-tn-apple-stock-20160127-story.html READ MORE

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