BACHELOR IN BUSINESS ADMINISTRATION

[STRATEGIC MANAGEMENT]
[BBCM3103]
ASSIGNMENT 2 - 20%

PREPARED FOR
[NUR ZAFIRAH ABDUL RAHIM]

PREPARED BY
[SITI FADILAH BINTI MOHD PAHIZUL]
[890425035020]

SUBMISSION DATE
[11TH MARCH 2022]
 [BBCM3103 STRATEGIC MANAGEMENT] – Assignment 2 2

GUIDELINES FOR ASSIGNMENT FORMAT

Format of assignment: -

 Font Size 12
 Font Type Times New Roman
 Line Spacing 1.5 lines
 Alignment Justified
 Word limit: - Not exceed 4500 words

PLAGIARISM

 Plagiarism is the presentation of the work, idea or creation of another

person as though it is your own. It is a form of cheating and is
considered as a very serious academic offence.

 Plagiarized material can be drawn from, and presented in, written, graphic
and visual form, including electronic data, and oral presentations.
Plagiarism occurs when the origin of the material used is not
appropriately cited.

Examples of plagiarism include:

• Copying sentences or paragraphs word-for-word from one or more

sources, whether published or unpublished, which could include but
is not limited to books, journals, reports, theses, websites, conference
papers, course notes, etc. without proper citation;

• Closely paraphrasing sentences, paragraphs, ideas or themes without

proper citation;
• Piecing together text from one or more sources and adding only linking
sentences;
• Copying or submitting whole or parts of computer files without
acknowledging their source;
• Copying designs or works of art and submitting them as your original
work;
• Copying a whole or any part of another student's work; and
 [BBCM3103 STRATEGIC MANAGEMENT] – Assignment 2 3

APPLE’S PROFITABLE BUT RISKY STRATEGY

When Apple’s Chief Executive-Steven Jobs-launched the Apple iPod in 2001 and the iPhone in
2007, he made a significant shift in the company’s’ strategy from the relatively safe market of
innovative, premium-priced computers into the highly competitive markets of consumer
electronics.

To understand any company’s strategy, it is helpful to begin by looking back at its roots.
Founded in 1976, Apple built its early reputation on innovative personal computers that were
particularly easy for customers to use and as a result were priced higher than those of
competitors. The inspiration for this strategy came from a visit by the founders of the company-
Steven Jobs and Steven Wozniack-to the Palo Alto research laboratories of the Xerox Company
in 1979. They observed that Xerox had developed an early version of a computer interface screen
with the drop-down menus that are widely used today on all personal computers. Most
computers in the late 1970s still used complicated technical interfaces for even simple task like
typing-still called “word-processing” at the time. Jobs and Wozniack took the concept back to
Apple and developed their own computer-the Apple Macintosh (Mac)-that used this consumer-
friendly interface. The Macintosh was launched in 1984. However, Apple did not sell to, or share
the software with, rival companies. Over the next few years, this non-cooperation strategy turned
out to be a major weakness for Apple.

Around the year 2000, Apple identified a new strategic management opportunity to exploit the
growing worldwide market in personal electronic devices. It would launch its own Apple
versions of these products to add high-value, user-friendly software. In 2007, Apple followed up
the launch of the iPod with the iPhone, a mobile telephone that had the same user-friendly design
characteristics as its music machine. To make the iPhone widely available and, at the same time,
to keep control, Apple entered into an exclusive contract with only one national mobile
telephone carrier in each major country for example AT&T in the USA. However, in order to hit
its volume targets, Apple later reduced its phone prices, though they still remained at the high
end of the market. This was consistent with Apple’s long-term, high price, high quality strategy.
But the company was moving into the massive and still expanding global mobile telephone
market where competition had been fierce for many years.

And the leader in mobile telephones-Finland’s Nokia-was about to hit back at Apple, though
with mixed results. But other companies, notably the Korean company Samsung and the
Taiwanese company, HTC, were to have more success later. The world market leader responded
by launching its own phones with touch screens.
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As a short term measure, Apple hit back by negotiating supply contract for flash memory for its
iPod that were cheaper than its rivals. Moreover, it launched a new model, the iPhone 4 that
made further technology advances. Apple was still the market leader and was able to
demonstrate major increases in sales and profits from the development of the iPod and iTunes.
To follow up this development, Apple launched the Apple Tablet in 2010-again an element of
risk because no one really new how well such a product would be received or what its function
really was. But there was no denying that the first Apple table carried some initial risks for the
company.

All during this period, Apple’s strategic difficulty was the other powerful companies had also
recognised the importance of innovation and flexibility in the response to the new markets that
Apple itself had developed. For example, Nokia itself was arguing that the markets for mobile
telephones and recorded music would converge over the next five years. If the Nokia view was
correct, then the problem for Apple was that it could find its market-leading position in recorded
music being overtaken by a more flexible rival- perhaps leading to a repeat of the Apple failure
20 years earlier to win against Microsoft. Apple had at last found the best, if risky, strategy.

Source: Adapted from jstor.org

1. Apple Annual Report and Accounts for 2006 and 2010. www.apple-history.com/history.

QUESTION 1

Using the concepts of Strategic Management, undertake a competitive analysis of both Apple
and Nokia. Who is the stronger?

Based on the situation given above, we can see that the Apple was very good in managing the
products and brand. However, the Nokia was not well prepared with their products and they
cannot able to maintain the products and technology. As the result, Nokia was losing people
hope and trust on their products.

The best and the strongest is Apple. Apple was well prepared and always upgrade their
technology and always make sure people get latest model of their phones and ipad and many
more. Besides, Apple also had good and new products which are more competitive and make
people trust in their brand as well.
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QUESTION 2

What are the problems with predicting how the market and the competition will change over the
next few years? What are the implications for strategy development?

The problems that will face by the Apple are as below:

1. Outdated technologies – this is because the new technologies was developing very fast
and lots of companies such as nokia, Samsung, Appo, Redmi and so on will come with
the new technologies for their phones and this will make the Apple outdated. How ever,
if the Apple manages to cope with the current technologies and always looking forward
to change, then Apple will not have problem at all.

2. Outdated design –the design always be the first impression of any product. If Apple
wanted to make their design up to date, Apple needs to prepared much design and keep
always make new models. Besides, Apple is the famous brand which more customers
trust and believe of their technologies.

3. Competitors will copy their product – most of the electronic companies like to design
their product same as I phone. This is because iphone had the best features and design,
that why more people buy iphone. The competitor will just copy the design, but cannot
product same as iphone.

Strategy development is important for all companies because this strategy will help once
company to get more profits and money. If they use the right and correct strategy, they will
success and get more money. Strategic management involves setting objectives, analyzing the
competitive environment, analyzing the internal organization, evaluating strategies, and ensuring
that management rolls out the strategies across the organization. Apple was using the right and
correct strategy and had success every year to product new models for iphone and ipad and many
more.
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QUESTION 3

What lessons can other companies learn from Apple’s strategies over the years?

Here are five lessons that all brands can learn from Apple.

1. Customer-Centric Mastery

Apple always has been all about the customer. That is why it refuses to let its techies lead
product innovation, and instead directs its designers to create something that they themselves
would want to use. That means that the design is customer centric — meeting customers’ needs
first and foremost. It is no wonder that Apple is known for its products’ ease of use. The
company knows that the last thing users want when it comes to their device is something too
difficult to manage. Apple also understands that the customer “wants” list is constantly growing.
We customers are not satisfied for long, it seems. Rather than fight this reality, Apple has
embraced it. That is why it constantly improves its devices based on what customers want, often
making changes that customers didn’t even know they needed until the latest version is released.

Here’s a case in point: the removal of the home button years ago on the iPhone. Surely the same
applies to the dual and triple cameras within the iPhone 11 series. While other brands claim to do
the same, Apple is the master of customer-centric marketing. Moreover, Apple’s customer-
centric approach doesn’t stop at new features. The product design is another example. Its
prowess for creating lustrous designs is well-known. Apple knows that its customers value
stylish, elegant design as well as an array of in-vogue color choices. In these respects, Apple
never disappoints. It constantly pushes the bounds of product innovation with alluring color
palettes. Lavender iPhone case or Pink Sand Sport Apple Watch, anyone? This speaks to Apple’s
ability to be cutting-edge while honoring one of the top desires for buyers, namely the ability to
look, well, cool.

2. Brand Ambassadors

Apple understands the value of turning customers into brand ambassadors. Instead of purchasing
endorsements from celebrities or well know influencers (which would be an easy lay-up for
Apple), the company realized that it just as easily could turn its customers into raving fans who
can’t wait to tell their brothers, sisters, cousins, neighbors, mail carrier — well you get the idea
— about how much they love Apple products. That is exactly what they have done. Apple’s
ability to make customers happy ensures that they will stay loyal and continue to purchase from
the company over the long haul, while bringing in new customers in the process. That never was
lost on Apple. Unlike other brands, Apple isn’t transactional. It isn’t trying to get customers to
buy once and then just cross fingers that the customer will buy again. Always at the forefront of
thought-leadership, it knows that when customers eat, sleep and live the brand, it becomes that
much more influential and powerful. Having customers promote a brand to friends and family
not only gives it credibility, it provides a memorable distinction. Creating customer advocates is
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something that most brands aim for, whereas Apple actually has achieved it by making
customers feel valued. This approach also gives the brand an extremely human feel because the
pay-to-say element isn’t there. These are true brand/customer advocates. That doesn’t mean that
Apple doesn’t use influencers — it means it doesn’t need to, which is a critical distinction. Other
brands would love to be in Apple’s shoes when it comes to artfully turning customers into brand
ambassadors. They just haven’t figured out the secret sauce yet.

3. Real World Connection

When is the last time you took a glance at Apple’s Instagram feed? If it has been a while, grab a
cup of coffee and take a gander. The bio on the page says simply “everyone has a story to tell,”
and looking through the feed one can see the merit of that statement. The page is a sea of
engaging user-generated imagery and video. This isn’t just about showcasing the features of the
iPhone via the #shotoniphone user-generated campaign, it’s about creating connections to the
company’s audience. While it is clear that many of the images are from professional
photographers with large follower counts, there is also a healthy mix of amateur photographers
and enthusiasts, which makes for a potpourri of unique and interesting pictures. Real people
sharing captivating, personal images and video from their iPhones breaks away from the brand-
speak and makes an impression on the audience. The artful curation puts the focus on the user
while showcasing the breathtaking imagery that can be achieved while shooting on an iPhone.
Beyond the obvious promotional benefit, it underscores that we know photos are personal. They
are intimate. They are a reflection of who we are, and we value that. All of that reinforces the
company’s point: What matters to you matters to Apple. This page easily could look like others
with logos, product shots, and other brand-centric messaging, but Apple is too smart for that. It
knows that typical brand-centric marketing on its page would detract from the authenticity that it
works diligently to foster and maintain. Apple knows the value of a tribe. It understands that
belonging to a larger group provides real-world connections that are priceless.

4. Aspirational Lifestyle

Apple understands that people buy identities, namely their own. The company understands that
bringing lifestyle to a brand is like bringing water to the desert. It is most appreciated. Apple is a
lifestyle brand for a reason. It understands that having its products embody the interests,
aspirations and motivations of its customers is smart business, because it separates its brand from
the competition. The company does this by representing the emotions, values and identities of its
audience. It helps customers express who they are. It knows that the more the brand represents
how customers want to feel, and the more it reflects customers’ aspirations, the better.
 [BBCM3103 STRATEGIC MANAGEMENT] – Assignment 2 8

That is why Apple has positioned itself as a high-end or luxury brand. The brand is perceived as
worth the expense. The Apple Watch and other Apple products are considered a status symbol.
They are a representation of wealth or affluence. Many people love to feel wealthy, and buying
an Apple product is a way of fulfilling that need. That is not the only reason people buy Apple
products, but coupled with the emotional influence, it makes for a winning proposition, because
it speaks to the human experience. It also breeds brand loyalty.

5. Brand Equity

Perhaps more than anything else, Apple recognizes the power of branding and the real-world
profitability that successful brand awareness, married with brand preference, creates. Apple is a
hugely valuable brand. It has an exceptional brand image and brand positioning. These things
didn’t occur by accident — they were done by design. Apple has crafted its brand strategy
carefully, with an eye on perpetually delighting the customer — and I do mean delighting. In an
increasingly crowded market, Apple understands that making the customer feel important means
that no matter the hordes of similar products in the market, its brand always will be one that
customers know, trust and seek out. In an era when the branding can be minimized or devalued,
Apple is a model of branding done right.