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Strategic Challenges Apple

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Apple Inc., incorporated in 1977, is one of the world’s leaders in designing, manufacturing, and supplying personal computers, mobile communication and media devices, portable digital music players, as well as a variety of related software and services. The assessment of Apple’s work processes, which include product design, process planning, production control, maintenance, sale order processing, shipping, and delivery, allows for defining its key employees -CEO, executive team, and highly skilled personnel in the technology sector (Kumar & Suresh, 2008; USSEC, 2012).

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Apple’s various strengths enable them to maintain its competitive advantages in order to meet future strategic challenges related to lower consumer spending, increased competition, changes in the industry, and lifestyle trends. Although, the company should lead in the next major technological shift that requires enhancing its Research and Development (R&D) capabilities while trying to expand its market share or at least hold its current position considering the price point for its products.

To survive in the rapidly changing environment, Apple must employ the innovative kind of workers that can demonstrate different knowledge, skills and abilities with the common features that include creativity, talent, and ability to push the boundaries, self-motivation, strategic thinking, and collaboration (Apple Inc., 2013). Besides, Apple has to align its compensation system, which is not quite adequate to economic conditions of the labor markets.

Apples Work Processes

Apples Functions and Work Processes

The main functions of Apple Inc. that include R&D, supplying components, manufacturing, and marketing as well as distribution constitute the structure, within which Apples main work processes are managed (USSEC, 2012). A work process is a collection of activities that takes one or more kinds of input and creates an output that is of value to the customer (Yeo, 2013). The inputs include men, materials, machines, information, capital; the outputs are Apples products and services (Kumar & Suresh, 2008). Apple is involved in the main transformation processes within its functions – product design, process planning, production control, maintenance, sale orders processing, shipping and delivery (Kumar & Suresh, 2008; Yeo, 2013). The core activity is product design, because it is a crucial element of creating new values for customers and defining the key employees.

Key Employees

Apple Inc. has about 72,800 full-time employees; nearly half of them are in service sector positions sales employees and customer service representatives, repairmen and delivery drivers (USSEC, 2012; New York Times, 2012). The Apples performance depends largely on the key employees that includeChief Executive Officer, executive team and highly skilledpersonnel in the technology sector. Especially, it refers to highly demanded hardware and software engineers. There is the intense rivalry for their talent in the industry.

Meeting Strategic Challenges in the Future

Future Strategic Challenges

The analysis of factors that can influence Apples performance leads to the formulation of strategic challenges Apple may face in the future:

The recent global crisis impacts consumers spending and accentuates the tendency of prevailing better pricing over brand loyalty that highlights a need of adding new products with low prices (Thibodeau, n.d.);

The financial uncertainty and intense competition can impact business spending and increase the cost of capital and operation costs including labor costs;

Changes in lifestyle trends that imply increasing online sales;

New major technological shift related to new technologies and revolutionizing TV industry provides more opportunities and challenges for Apple.

Global influences require further acquisitions of local companies to benefit from their intellectual capital (Thibodeau, n.d.).

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Changes Required to Meet Future Challenges

The company will continue positioning itself as a niche market PC hardware and software manufacturer. However, it should be more competitive with the next major technological shift while trying to expand its market share or at least to hold its current position considering the price point for its products. Consequently, it will force Apple to expand its business in existing and new emerging markets. Apple should use the acquisitions, enhance R&D capabilities by attracting more skilled labor force, adapt its products and services to local consumers needs that require the increase of marketing and design team. Moreover, Apple needs to adjust its compensation system, and reduce operation costs by way of Supply Chain optimization, implement effective IT solutions, and develop multi-channel and cross-channel (USSEC, 2012; Michael, 2013).

Future Requirements to Workforce

Future needs in workers

In order to maintain and develop its competitive advantages, Apple must employ workers who will help the firm to meet strategic challenges in the future. This type of workers should be innovative workers. Although they should demonstrate knowledge, skills and abilities in such areas as hardware and software engineering, marketing, sales, design, IS&T, the common features that are strongly required by Apple include creativity, talent, ability to push the boundaries, self-motivation, creative and strategic thinking, and collaboration (Apple Inc., 2013).

Compensation System

Apples compensation system intended to attract, retain and motivate employees for better performance includes direct, indirect and non-financial compensation. In addition, Apple Inc. provides share-based compensation, in which it receives employee services in exchange for equity instruments (USSEC, 2012). Although Apples compensation system is reflective of the conditions of occupational labor markets by the standards of retailing, however, sales rate as for a consulting company, high dissatisfaction levels of employees, multitasking and other stress-related issues, this system should be considered inadequate. In consideration, work inside the worlds fastest growing industry, for the most valuable company, run by one of the countrys most richly compensated chief executives, Tim Cook (Segal, 2012).

Conclusion

Apple has various strengths to be successful, however, to meet future strategic challenges related to lower consumer spending, financial uncertainty, increased competition, changes in the industry, and lifestyle trends, the company should try to expand its market share or at least hold its current position considering the price point for its products.

In the rapidly changing environment, Apple must employ the innovative kind of workers that can demonstrate different knowledge, skills and abilities with the common features that include creativity, talent, ability to push the boundaries, self-motivation, creative and strategic thinking, and collaboration (Apple Inc., 2013). Besides, Apple has to align its compensation system, which is not quite adequate to economic conditions of labor markets.

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