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Table of Contents

Introduction ............................................................................................................................................ 2
1.

Competitive analysis of Apple and Nokia ....................................................................................... 3


1.1.

Objectives................................................................................................................................ 4

1.1.1

Vision and mission statements ....................................................................................... 4

1.1.2

Impact on strategy .......................................................................................................... 5

1.2

Assumptions held by the leadership of both companies........................................................ 7

1.3

Beliefs about its competitive position .................................................................................... 8

1.4

Past History ............................................................................................................................. 8

1.5

Industry Trends ....................................................................................................................... 9

1.6

The strategic capabilities of both companies ....................................................................... 10

1.6.1

Apples Strength ............................................................................................................ 11

1.6.2

Apples Weakness ......................................................................................................... 11

1.6.3

Nokias Strength ............................................................................................................ 11

1.6.4

Nokias Weakness ......................................................................................................... 11

1.7

Strategies being employed by both companies.................................................................... 12

1.7.1

Apples strategy ............................................................................................................ 12

1.7.2

Nokias strategy............................................................................................................. 13

1.8

Analysis and Conclusion ........................................................................................................ 14

2 Problems with predicting how the market and the competition will change over the next few
years and its implications for strategy development ........................................................................... 15
2.1

2.1.1

Political Challenges ....................................................................................................... 15

2.1.2

Economic challenges ..................................................................................................... 16

2.1.3

Social Challenges ........................................................................................................... 16

2.1.4

Technological Challenges .............................................................................................. 16

2.2
3

Macro Environment .............................................................................................................. 15

Implications for strategy development................................................................................. 16

Lessons that can be learnt from Apples strategies ...................................................................... 17


3.1

The benefits of learning from ones failure ........................................................................... 17

3.2

The ability to take risk through innovation ........................................................................... 18

3.3

The benefits of understanding your consumers and their needs......................................... 18

3.4

The benefit of having a keen eye for opportunities ............................................................. 19

References .................................................................................................................................... 20

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Introduction
The recent trends in the increasing competitiveness of the global market place with its
accompanying threats to the survival of many industries has forced several managers to
rethink the way they do business. There has been a paradigm shift from the yester years
philosophy where by apart from the recurring operational level planning for finances and
basic forecasting, strategic management was relegated to the bench on most corporate
level discussions on growth and success to a modern thinking where most managers now
consider strategic management as an effective weapon in their arsenal for securing
sustainable competitive advantage in their operational markets. The rise and fall of many
businesses either through very good effective strategies or through a deficiency in
sustainable strategy only go to reiterate this point further. In order to fully comprehend the
many benefits of strategic management it is necessary that we understand what the
concept means.
Strategic management in its basic form comprises of the many intended and emergent
initiatives taken by the management of a company involving the usage of its resources to
enhance the performance of the company in its external environment (Nag, et al., 2007). It
involves a careful study of an organisations internal environment and its interactions with
its external environment (customers, competitors, suppliers, macro environment) all with
the aim of maximizing the positive influences of its environments whilst minimizing their
negative effects. Central to the theme of strategic management is the need for business
leaders to be in touch with their business environments so as to be in a better position to
respond to varying stimuli. This need for greater environmental awareness can be as a result
of a deliberate plot by the business to shape its future through a series of well thought out
initiatives for the realisation of a specific end or as a means of continuous survival evolution
without a concrete end (the end of one journey begins another).
Irrespective of the approach that a business takes to realising its strategic potential, all
strategic planning initiatives consist of three distinct stages namely strategic analysis of the
businesss environment, strategic development of options and the strategic implementation
of one or a combination of the developed options. Strategic analysis of the businesss
environment is concerned with identifying the impact on strategy of the environment, an
organisations strategic capability (resources and competences) and the expectations and
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influence of stake holders (Johnson, et al., 2008). The strategic development of options
helps a company assess varying paths to accomplishing its aims and objectives in relation to
the identified capabilities of the organisation in the strategic analysis phase (Lynch, 2011).
Strategic Implementation the final member of the trio is concerned with all the activities
performed by the business to ensure the chosen strategy not just works but pays off as
intended.
Subsequent chapters in this report will further explore the concepts in strategic
management through a competitive analysis of some of the businesses presented in the
case study notably Apple and Nokia as well as assess the problems with predicting the
future state of external environments. Also the lessons from Apples strategies throughout
its history as presented by the case will also be examined.

1. Competitive analysis of Apple and Nokia


Strategy can be said to be a cycle driven by motivations and actions in the sense that most
strategic actions are initiated on the basis of stimuli in an organisations environment both
internal and external. Thus all strategic management initiatives can be reversed engineered
to its constituent actions and what motivated those actions. By understanding the
relationship between a companys actions (implemented strategy) and what might have
motivated them, an assessment can be made on the efficacy of such strategies in satisfying
their intended outcomes. Michael Porters four corners model (Porter, 1980) provides a very
good framework to help dissect an organisations competitive strategies along the lines of
motivations and actions. According to Porter most organisations will be motivated based on
their objectives and held beliefs about their internal and external environments (Porter,
1980). Their actions (strategies) will be based on their perceived capabilities.
This cycle of motivations and actions can be translated onto the 3 phases of strategic
management. The analysis of the businesss strategic position feeds its motivations which in
turn helps the business define its strategic options based on its capabilities. The strategic
implementation of the best option for the businesss case consist of the many actions taken
to satisfy its motivations.
Drawing from this understanding, the strategic analysis of Apple Inc. and Nokia will be based
on four broad areas:
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The objectives of both companies.

Assumptions held by the leadership of both companies.

The strategic capabilities of both companies.

The strategy being employed by both companies.

1.1.

Objectives

At the heart of every strategy lies its motive. An organisations motives are formed after an
introspective assessment of its current position, its past and where it wants to go. The result
of this is the formulation of its vision and mission statements which epitomizes its values,
culture and philosophy. Time bound realistic objectives are then set based on this vision
with specific, measurable targets for the business to attain. This gives the business a sense
of purpose and direction in its operations.
Its apparent therefore that an assessment of any organisations competitive strategies
should begin with an understanding of what that organisation stands for.

1.1.1 Vision and mission statements


Although the vision and mission of both Apple and Nokia are not stated within the case, an
examination of some released official documents, press releases and a look on the websites
of both companies revealed in the case of the former the absence of a clearly defined vision
and mission statement. Piecing together little bits of information and examining these
further, Apples vision and its beliefs as revealed by its then COO, Tim Cook is presented as:
We believe that we are on the face of the earth to make great products and that's not
changing. We are constantly focusing on innovating. We believe in the simple not the
complex. We believe that we need to own and control the primary technologies behind the
products that we make, and participate only in markets where we can make a significant
contribution. We believe in saying no to thousands of projects, so that we can really focus
on the few that are truly important and meaningful to us. We believe in deep collaboration
and cross-pollination of our groups, which allow us to innovate in a way that others cannot.
And frankly, we don't settle for anything less than excellence in every group in the company,
and we have the self-honesty to admit when we're wrong and the courage to change
(Frommer, 2009).

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Its mission statement was however seen to vary as per the strategic direction of the
company at any point in time. Although Apples mission statement varies with its strategy
the central theme of all the variations is as presented below:
Apple is committed to bringing the best personal computing experience to students,
educators, creative professionals and consumers around the world through its innovative
hardware, software and internet offerings (Apple Inc., 2004).
Nokia on the other hand had a clearly defined vision with an accompanying mission
statement reproduced below:
Our vision is a world where everyone can be connected. Everyone has a need to
communicate and share. Nokia helps people to fulfil this need and we help people feel close
to what matters to them. We focus on providing consumers with very human technology
technology that is intuitive, a joy to use, and beautiful. We are living in an era where
connectivity is becoming truly ubiquitous. The communications industry continues to
change and the internet is at the centre of this transformation. Today, the internet is Nokia's
quest. Nokia's strategy relies on growing, transforming, and building the Nokia business to
ensure its future success (CEMS, 2012).

1.1.2 Impact on strategy


An assessment of both companies vision and mission statements reveal some similarities as
well as differences in their approach to growth.
Table 1 A comparison of the vision and mission of Apple and Nokia
Mission components

Apple

Nokia

Slogan

Think Different

Connecting
People

Products or services

PC hardware, software, consumer

communication

electronics and internet services

products,
internet
services

markets

Global

Global

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Mission components

Apple

Nokia

customers

Students, Educators, creative

Everyone

professionals and general


consumers
Technology

Own and control the primary

Technology

technologies behind the products

with a human

that they make (use in house

touch

technology).
Concern for

participate only in markets where

growing,

survival/growth/profits

we can make a significant

transforming,

contribution

and building
the Nokia
business to
ensure its
future success

Philosophy

Innovation as a driver for success,

Products

simplicity, focused product

should be

development, collaborative effort

intuitive,

to development,

arouse joy and


should appeal
to the senses

Self-Concept

self-honesty, courage, excellence

helpful

Concern for public image

Not clearly stated

Not clearly
stated

Concern for employees

Not clearly stated

Not clearly
stated

A convergence in their operations is in the products they offer and the markets they operate
in. Both companies see great potential in the market of providing internet services and
consumer telephony devices and as such have included it in their product portfolio. They
also envision the global market place to be their operational turf.
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Apart from these similarities Apple and Nokia are very different in their beliefs and
purposes. These differences span the areas of defining key customers, approach to
technology development and the companys philosophies amongst many others. Apple
clearly defines its key customers whilst Nokia is content in providing services to satisfy a
wider market base. Their differences also show in their approach to technology
development with Apple preferring to look in house for all its technological needs with
Nokia choosing to emphasise on the kind of technology it prefers rather than the source.
Their differences become even more profound through a comparison of their philosophies.
Nokia believes that their garnered competitive advantage comes through the development
of intuitive products with the ability to appeal to the senses of their customers. Apple on the
other hand believes that by making their products more innovative albeit simple, they stand
the chance to appeal much more to their intended customers.
These differences and similarities should show in their choice of strategies. Assessing their
vision and mission alone will only provide the analyst with a summary of what to expect in
terms of a companys outlook and as such would not be the only determinant of a
companys strategy. A companys vision and mission may be or may not be enshrined in its
operations thus there is the possibility of a company having a very beautiful vision and
mission statement on paper but with contradictions in its actions. Companies with a
formalised vision and mission statement tend to gain an advantage in terms of an increased
familiarity with the companys purpose amongst its entire working populace although this
does not necessarily translate to it having a competitive advantage over its competitors that
do not have formalised vision and mission statements.

1.2 Assumptions held by the leadership of both companies


The perceptions of senior management about their internal and external environment often
than not contribute a great deal to shaping the strategies of most organisations. The
important role management assumptions play in shaping strategy can be seen through an
example of a company that fails on various occasions at introducing a new product to the
market being very unlikely to get management support for the reintroduction of similar
products because of their past experiences of failure. A companys held assumptions may be
based on a number of factors. These may include:

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Beliefs about its competitive position

Past history

Industry trends

Regional factors

Rules of thumb (NetMBA.com, 2010)

1.3 Beliefs about its competitive position


A companys competitive position relates to the way it differentiates its offerings and
creates value for its market. A companys competitive position is determined through the
spot it occupies in its competitive landscape and what its best known for (Moderandi Inc,
2006).
Apple views itself as the producer of very innovative high quality products which usually sets
the pace in which ever market they compete in. Due to this, most of Apples products are
premium priced to match this perception of higher added value to the customer. This sense
of innovation translates into:

Leadership in the PC hardware and software for the creative arts consumer market
through its reputation as being the developer of the worlds first desktop
publishing software (Page Maker).

Leadership in the personal music player market through the IPod.

Leadership in the digital music purchasing market through its online music store
ITunes.

Nokia in comparison to Apple with its core business being in the production of
communication related products and services sees itself as the leader in the mobile
telephone market.

1.4 Past History


A companys history recited through its origins, challenges, successes and failures plays a
role in determining the companys present state as well as where it may be heading. Most
manager gain experience as they grow in the business and these experience usually come to
bear on their judgement in decision making.

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Apple started off as a maker of PC products having picked up ideas from a visit of it soon to
be founders to the research laboratories of Xerox. This visit inspired them in the
development of its first wave of innovative easy to use PCs that were applauded market
over. The sway its first generation products had on the market was short lived once
competitors were able to imitate them. Learning from this experience, Apple has since tried
to be on the front foot of which ever market it do decide to participate in. Its hallmark has
been to bring positive disruptions through innovation and thinking differently. Apple over
the years has learnt that products and technologies can be copied once they are launched
and whatever first mover advantage they possess at product launch will erode as the
product matures. Constant product innovation to them is the only way they can stay ahead
of their competition.
Nokia has grown from a small company in Finland to a global giant in telecommunication
products and services. This growth has come on the back of its leadership in the mobile
telephone market with the development of intuitive, simple to use handsets its hallmark.
Often challenged but never overtaken by its competitors, Nokia has grown comfortable in
its position as the brand of choice in its operating market.
Both companies possess an abundance in rich history from which to draw from when
developing current and future strategies. Apples experience through its participation in
different markets gives it the edge over Nokia who throughout its history had have to
contend with only competitors from the telecommunications industry. Nokia however can
count on its vast experience in dealing with the threats from past competitors such as
Siemens and Sony Ericson as it seeks to consolidate its hold on the mobile telephone market
as Apple plans entry.

1.5 Industry Trends


The perception of a companys management about the industry in which they operate in
affects the kind of strategies they will deploy in their battle for supremacy. According to
Michael Porter (Porter, 2008) the competitiveness of any industry can be assessed through
five key determinants which include the ability of new entrants to break into the market,
the bargaining power of buyers to drive up value and lower product cost, the bargaining
power of suppliers to drive up their returns, the availability of products from other markets
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that offer similar functions and the intensity of the rivalry between existing competitors. In
an industry where the odds have always been against new entrants will see existing market
players placing very little emphasis on the threat from a new entrant. A companys held
views about the industry in which it belongs can be its advantage as well as its demise.
Correct views held by an organisation about its market may help determine where the
companys efforts should be channelled to gain advantage whilst an organisation with a
wrong perception about its market may be blind to possible threats which can affect its
survival.
Apples perceptions about the PC industry in its initial foray into business led to its loss to
Microsoft, with the latter growing to become the market leader in Personal Computing
software. Apple has since moved on from its initial setbacks in becoming a force to reckon
with in varying markets. Nokia as a market leader had always seen itself as insulated from
the threats of new entrants in the mobile telephone market, after all, existing competitors
were already struggling to compete in the market. This oversight allowed Apple to foresee a
strategic gap in Nokias product offering and take advantage of that.

1.6 The strategic capabilities of both companies


A companys strategic capability can be defined as the key resources and competences
needed by the company for its survival and prosperity (Johnson, et al., 2008). An
understanding of a companys capabilities is useful in understanding how it might respond
to a competitive attack. A companys strengths usually lie in its resources and the way it
utilizes these resources (competencies) to counter threats and secure opportunities. A
companys resources can be both tangible (physical assets such as workers, factories, and
equipment) and intangible (non-physical assets like information, intellectual rights) and
comprises of physical, financial, human and intellectual resources (Johnson, et al., 2008).
Adherents of the resource based view believe that a companys competitive advantage only
comes through the resources it possess and not from a thorough understanding of both its
internal and external environment. In order for a company to gain competitive advantage
they argue that its resources and competencies must be rare, hard to imitate and not easily
substituted. This ideology goes to show how relevant a companys capabilities are to its
survival and growth.

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A SWOT analysis of both Apple and Nokia should reveal their strengths and Weaknesses
which together determines their strategic capabilities.

1.6.1 Apples Strength


In accessing the strength of Apple, it can be seen that Apple is a company with a strong
brand name, a leader in the online music download market, possesses a strong vision led by
the charismatic Steve Jobs and has a solid financial base. Apple by offering exclusive
contracts on their mobile phones maintain their identity as a premium brand producer.
Apples ability to offer innovative but yet easy to use quality products coupled to its skill in
product design contributes to its strength. Apple is known within the industry circles to be
very cost efficient.

1.6.2 Apples Weakness


Apples weakness lies in its pricing strategy which has the tendency to discourage potential
customers whose selection is based on low pricing. Also Apples history shows that although
the company has always been a first mover through innovation, its competitors have always
been able to imitate this over time. This presents a challenge to them staying competitive
over the long haul. Further the companys preference for direct distribution or limited
partnered distribution chains as was in the case of the IPhone means that the company will
be missing the benefits of a broader exit through multiple channels for its products into the
market. Currently in comparison to Nokia, it holds a smaller share of the mobile phone
market. This means any open confrontation with the market leader may be to its
disadvantage since Nokia can count on its market position.

1.6.3 Nokias Strength


Nokias main strength is by virtue of its position. Observed to be the market leader in the
mobile telephone market it can draw on a large customer base for future product
development endeavours. Its reputation for making good products adds to its already strong
brand name. Its solid financial foundation makes the company an even more formidable
opponent in its market of operation.

1.6.4 Nokias Weakness


With the mobile phone market maturing and heading towards becoming commoditized with
the release of every new product, Nokia is presented with the challenge of staying relevant.
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It needs to grow into an innovative company if its to survive which its history has yet to
prove. The indifference of Nokia in assessing the strategic gaps provided in similar markets
in order to take advantage as Apple did in the consumer electronics and music downloads
market shows as a weakness of the company to develop alternate streams of revenue there
by shielding it against the shocks of a faltering market.

1.7 Strategies being employed by both companies


1.7.1 Apples strategy
Apple has varied its strategies very little over the timeframe of the case recovering from its
initial upset in the PC market where by it employed a non-cooperative approach to an
emerging market although it had first mover advantage in contrast to Microsofts strategy
of building advantageous relationships with key suppliers and promising distribution
channels. Microsofts strategy ensured that its products set the taste and requirements for
this new market. Since then Apple have had to play catch up to Microsofts market share.
Irrespective of this setback, Apple stayed true to its vision of organic growth by building a
vertically integrated process chain opting to develop both the hardware and software
components of its PC line different to the approach of its competitors.
Since then Apple have been more open to cooperation with key market players when it sees
the possibility of forming a strategic Alliance with no direct threats to its business ambitions.
This can be seen in its approach to the development of the ITunes Music Store by partnering
with five of the worlds biggest record labels for the creation of one of its very successful
business endeavours.
Apples strategy to market development described using Porters generic strategies (Porter,
1980) is based on a focus approach where by it targets a section of the market with varied
needs from the general population and provide tailored solutions. By leveraging on its
ability to provide a product different to what its competitors offer, the company is able to
arouse in their customers that feeling of uniqueness. This ability to create the perception of
only providing premium products enables Apple to command higher prices on their
products.
Apples strategy to growth and expansion is through diversification into new markets with
new products although ensuring that the potential for a relationship with its existing
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products exist. By developing products that can be integrated in a way although for different
markets, apple capitalise on the potential to cross sell existing products to buyers of the
new products. This strategy falls in line with Apples strategic direction of not just
developing standalone products but rather an ecosystem of functionally related consumer
products which work in harmony to the ultimate satisfaction of the customer.
Apples core strategic principles in its business endeavours can be summarised to be:
1. Focused strategy to market development through product differentiation.
2. Related diversification taking advantage of strategic gaps in surrounding markets.
3. Vertical integration taking control of its up and down stream supply networks.
4. Achieving cost efficiency so as to increase profit margins.
5. Form strategic alliance when beneficial.
6. Seek first mover advantage where possible.
The fuel behind apples strategies is its ability to rapidly innovate to match the requirements
of the competitive markets in which the company operates in. its in-house technological
know-how working in tandem with its strong product design skills have enabled Apple to
churn out market defining products time and time again.

1.7.2 Nokias strategy


Nokia had enjoyed considerable success on its way to the top of the mobile phone market
till Apple disrupted the market with the launch of the first touch phone, the IPhone.
Although Apple had targeted a section of the market not catered for, the premium touch
screen phone segment, Nokia foresaw the possibility of Apple eating into its revenue
streams due to the strong appeal of Apples product wooing over its admirers and as such
had to adjust its strategies.
Prior to Apples arrival, Nokias strategy had been to provide a wide range of personal
communication devices tailored for various market segments. Nokias competitive
advantage was through cost leadership with the ability to provide products to suit the
varying income levels of its customers. Nokias strategic direction had been conservative
choosing only to develop its existing markets for increased market penetration.

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Nokias response to Apples foray into the mobile phone market in a bid to quell Apples
ambitions was to launch its own line of products similar in design and function to Apples
IPhone offering a lower price advantage. Subsequent actions included attacking Apples
strong hold, the online music download market, through diversifying into the provision of
such services.
Nokias change in strategic direction takes into consideration the need to protect the value
accrued to its stakeholders by diversifying into other sources of income hitherto ignored.

1.8 Analysis and Conclusion


Apple and Nokia are currently embroiled in a competitive cycle with Apple keen on breaking
Nokias hold on the mobile phone market whilst Nokia is determined to stay at the top. This
competitive rivalry is good for the industry which have for a long time been stifled of
innovation and gone stale approaching commoditization. Both companies have their own
strengths and weaknesses and have been able to create value for their shareholders
although through different strategies.
There exist a strong correlation between their purpose, assumptions and strategies. In the
context of the case study using the BCG Matrix to assess their product portfolio, Apple have
three cash cows in IPod, ITunes and the IPad, a star with their IPhone and a problem child
with their PC line. In comparison to Nokia whose entire portfolio had been centred in the
mobile phone market under different segments. Its foray into the online music market can
be seen as a problem child since the outcome on its investments had not been determined
during the time frame of the case.
Most markets are not static and as such makes it difficult to predict the outcome of any
companys strategy in the long term. History has shown that although Apple always have an
advantage through its innovative approach to development, this advantage is usually short
lived as most of its competitors are able to imitate its strategies easily. Only time will tell if
Apple can continue its rapid cycle of innovative development as without it the company
loses its edge over other competitors.
Nokia on the other hand takes solace in its large market share in its core business. However
a lack of diversification puts a huge strain on it being overly dependent on its sole source of
revenue. This approach leaves the company susceptible to market shocks.
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As to whos stronger? Both companies are relatively comfortable with their profit margins
and can count on a solid financial base. Apples strategy have failed it before in the past but
it quickly recovered to gain new ground. As to whether it will fail it again cannot be decided
within the context of the case study. Nokia has altered its strategic direction in relation to
changing market conditions. As to whether this change in strategic direction will pay off in
the long run cannot also be decided within the context of the case study. In conclusion, both
companies are strategically strong in their own right although Apple may have a slight
advantage due to its ability to innovate rapidly.

2 Problems with predicting how the market and the competition will
change over the next few years and its implications for strategy
development
Most markets consist of a complex relationship between sellers competing for buyers, their
suppliers and the macro environment in which they operate. The many variables in the
market mix increases the permutations of possible market behaviour and performance at
any point in time. This presents a source of worry to many businesses as the many market
variables behave differently under different stress as such makes near to impossible
predicting long term market behaviour in order to lock in their market strategy.

2.1 Macro Environment


An industrys macro environment using the PESTLE frame work consist of the Political,
Economic, Social, Technological, Legal and Environmental aspects. These aspects play a vital
role in shaping the future of most markets either positively or negatively. An organisations
macro environment is outside its control and as such any changes outside the organisations
tolerance has the capacity to cause serious damage to the organisations business
endeavours.

2.1.1 Political Challenges


Political factors refers to government policy. These include regulations on trade restrictions,
subsidies, employment laws, environmental regulations and tax policy that might change
with the coming of every new government. Political decisions can impact on many vital
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areas of business such as the level of education of the workforce, the infrastructural quality
of the country such as the road and rail system and the overall health of its citizens. The
uncertainty in predicting what a change in government will bring makes it very difficult to
plan effectively. This situation becomes worst in highly volatile areas where the political
climate is very unstable.

2.1.2 Economic challenges


Another factor that poses an obstacle to effective market prediction is the degree of
economic uncertainty that may impact on a customers purchasing power as well as an
organisations ability to produce. Economic factors represent the wider economy so may
include economic growth rates, levels of employment and unemployment, costs of raw
materials such as energy, petrol and steel, interest rates and monetary policies, exchange
rates and inflation rates.

2.1.3 Social Challenges


Social factors represent the culture of the society that an organization operates within. They
may include demographics, age distribution, population growth rates, level of education,
distribution of wealth and social classes, living conditions and lifestyle. Changes in social
trends can impact on the demand for a firm's products and the availability and willingness of
employees to work.

2.1.4 Technological Challenges


New technology creates new products and new processes. Technology can reduce costs,
improve product quality and increase innovation. As much as technological advancement
can be beneficial for businesses this can also result in the loss of a competitive advantage
especially in the case where by this may lead to competitors being able to imitate
competencies. Easy and open access to technology can greatly reduce the barriers to entry
for new entrants. This can also result in the commoditization of the market. An example will
be open standards like Bluetooth and Wi-Fi which has greatly commoditized the consumer
electronics market.

2.2 Implications for strategy development


The uncertainties in predicting the market brings into question the effectiveness of the
deliberate or rational approach to strategic planning. A prescriptive or deliberate corporate
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strategy is one where the objective has been defined in advance and the main elements
have been developed before the strategy commences (Lynch, 2011). This is what some
managers will call long term planning whereby a company decides on a strategic direction
and puts in measures for that. This approach will require a degree of certainty as to know
the future behaviour of the market in which the organisation participates in. However
events in the real world like the global financial meltdown proves that this is not always
possible. Most companies can control their micro environment which may include their
industry competitors, suppliers, competencies and to some extent their customers. They
however are faced with the challenge of the impact of their macro environment, which is
out of their control, on their operations. How do they predict what the Government will do
next or whether the economy in their operational markets will decline or grow? These are
some of the difficult questions managers are faced with day by day. An alternative to the
deliberate approach to strategy development is the emergent way. An emergent corporate
strategy is a strategy whose final objective is unclear and whose elements are developed
during the course of its life, as the strategy proceeds (Lynch, 2011). The emergent approach
to strategy development sees strategy as a continuous process taking into consideration
actual environmental factors at any point in time so as to maximise the companys
advantage. The advantages of the process include its consistency with actual practice in
organisations; it takes account of people issues such as motivation; it allows
experimentation about the strategy to take place; it provides an opportunity to include the
culture and politics of the organisation; it delivers flexibility to respond to market changes
(Lynch, 2011).

3 Lessons that can be learnt from Apples strategies


Apples strategies over the years have taken it from a small maker of PCs to a global giant in
the personal consumer electronics market. There are many lessons that other companies
can learn from Apples strategies:

3.1 The benefits of learning from ones failure


No company ever wants to fail but in todays ever changing markets, failure might come.
Apple lost its first competitive battle to Microsoft which most industry pundits would have
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based on to signal the end of them. However being gracious in defeat, Apple saw its lost as
an opportunity to learn. The company went back to the drawing board recooked its
strategies and its subsequent products were hits. Irrespective of its new found success,
some of its products like the Newton personal assistant still struggled to make an impact on
the market and was hence dropped. This tells us that even very good companies do fail
sometimes and there is no golden rule to strategy but learning.

3.2 The ability to take risk through innovation


The fuel to Apples fire is its ability to innovate and not just innovate but innovate rapidly.
With the ever changing demands of todays modern markets, a companys ability to meet
the demands of the market will be the determinant of its survival or demise. Innovation is
the way through which companies can gain advantage in very competitive markets. Apple
realised this fact early in its life and made it its guiding principle (Apples slogan: Think
Different). Innovation has the ability to breathe new life into stagnant markets and allows
companies to reap profits from otherwise barren markets. However despite all the benefits
innovation can bring to a company there is no escaping the fact that innovation is a risky
choice albeit it pays off when done right. The prospect of conservative markets rejecting
new products is high. In spite of this fact, Apple have taken this gamble over and over again
winning most of the time when its competitors have preferred to rather sit and watch.

3.3 The benefits of understanding your consumers and their needs


Apples focused approach to market development means that they only develop a product
when they have identified a strong need to be met. This limits the chances of failure as
there will be a market ready for the product when launched. This approach to market and
product development can be rather tedious as it requires really getting to know your market
segment. The niche market approach has been shunned by many businesses since this
requires tailoring products to suit a small section of the general population which goes
contrary to popular perceptions of production like economies of scale. The ability of a
company to serve such markets may lead to increased returns since niche markets usually
command higher prices. Apple is able to charge premium of its products by way of being
able to provide to its customers just what they want.

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3.4 The benefit of having a keen eye for opportunities


Apples ability to recognize strategic gaps between already existing markets and capitalize
on them is profound. The music industry was not a product of Apples creation neither was
the mobile phone market, however the companys ability to identify a strategic gap in the
offerings of existing market players and capitalize on that was what really set them apart.
The IPod and the ITunes music store helped the music industry solve an existing issue with
piracy and the IPhone set the standard for a new way users interacted with their phone.
This gave the company first mover advantage in already existing markets something very
rare in hyper competitive markets. Strategy is about the way and manner companies take
advantage of the opportunities in their environment. Being attentive to detail will help
managers pick up on opportunities their competitors might have ignored.

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4 References
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