Thursday, October 31, 2013

Apple implementation

Apple implementation
Executive Summary
The aim of the report is to be able to develop the implementation plans for the strategic directions of Apple, Inc. operations in Australia. There is the need to adopt a flat organizational structure in Australia where the focus will be on the decentralization of the decision making as well as the decentralized communication between the different people who are found in the market. The firm can focus on the distribution of the design outlets even though the production will be maintained in the Foxconn and Inventec suppliers who are located in China. The leadership of the firm will focus on the transformational leadership rather than the transactional leadership strategies. The employees in the strategic alliances will be allowed to be able to develop their own objectives and be encouraged to achieve such objectives. There is a need to be able to reduce the power distance to allow for the massive decentralization of the designs, innovations as well as the marketing activities of the firm. The Apple’s operations in Australia need to implement the team spirit especially through the use of the team rewards for the employees and the rewards should be offered to the groups of the employees. The change management will be undertaken through the use of the Kurt Lewin’s three stage change model. The changes that are necessary include the move away from the standardized products to the customization of the products based on the markets where the products will be offered, the needs to change the leadership from the transactional to the transformational and the decentralization of the decision making.

1.0 Introduction
1.1 Background to the report
The background of the paper will focus mostly on the strategies that will be explored by the firm in the market where it operates in. The strategies that will be considered here are the business level strategy of cost leadership and the differentiation, diversification of the operations to take advantage of the opportunities that are found in the market, the international strategy, the acquisition of big market share and the alliances that the firm may enter into. The business strategies will be considered first. The company applies the focused differentiation strategy as a business level strategy through making products that are exclusive but still expensive and worth their price. Cost leadership, on the other hand, when appropriately applied, generates economies of scale to the company’s products since it makes it possible to produce commodities at the lowest cost possible. Apple’s engineering and design developers come up with ideas in the US but the manufacturing part is done by brand manufacturers namely Foxconn and Inventec located in China (Boone & Kurtz, 2013).

The international strategy of Apple will also be considered. Apple has applied the international strategy of making standardized products. Apple’s products are standardized across international markets. The company’s engineering designs and manufacturing are controlled from one source which makes them different from other computer manufacturers.

Acquisitions by Apple are always aimed at increasing the company’s competencies, and acquiring new patents and technologies for incorporation into existing and upcoming products. Apple has acquires over 48 companies since 1988 to 2013, which has paid off as the company is an industry leader in innovation and profitability (Gong, 2013). The company has entered into significant strategic alliances in order to exploit the economies of scale, learn from competitors, risk management, and sharing of costs for the aggregate economic value of the industry. The most significant and valuable alliance is the company’s alliance with AT & T in the production and launch of Apple’s iPhone. Apple Inc. applies close-related diversification strategies as the corporate strategy (Hill & Jones, 2013). In 2001, the company which was historically known for software and hardware technology diversified into digital music technology and launched the portable MP3 player, iPod, and later the iTunes music store. This strategy has helped the company gain economies of scale as a result of integration of personal computing products and personal entertainment.
1.2 Aims

The aim of the report is to be able to develop the implementation plans for the strategic directions of Apple, Inc. operations in Australia. The aim is to be able to implement the strategies and it will include a number of elements for instance the consideration of the capability systems as well as the structures that are found, the people, the consideration of the culture, and the change management amongst the many other elements that will be considered. The aim is to ensure that the implementation plan that is used is geared towards the achievement of the success in the operations of the firm.

2.0 Implementation of the strategies

2.1 Capabilities systems and structure

There is the need to adopt a flat organizational structure in Australia where the focus will be on the decentralization of the decision making as well as the decentralized communication between the different people who are found in the market. The main problem that is found in the current operations of Apple, Inc. is the high levels of the centralization especially as the designs as well as the all the operational strategies are being developed in the Silicon Valley office of the firm and then transferred to the other locations that are found in the globe. There is the need to ensure that the innovations are significantly decentralized to be able to reflect the situations that are being experienced in the diverse countries (Hitt, Ireland & Hoskisson, 2013). This will ensure that the differentiation that is undertaken in the firm allows for the proper consideration of the economic and socio-cultural factors that are found in the different locations. There is also the need to be able to undertake the product developments based on the needs of the Australian market.

The people who are involved in the product development will thus be people who are well aware and have a deep understanding of the situations that are found in the Australian market. The focus should be on the use of the high quality capabilities as the people in Australia have the ability to be able to purchase the products that are offered in the market. The economic situation for instance the low levels of unemployment and the growth in the personal income of the people play a role in the ability of the customers to be able to purchase the products that they are offered.

Moreover, rather than concentrate the design to one location, the firm can focus on the distribution of the design outlets even though the production will be maintained in the Foxconn and Inventec suppliers who are located in China. The above will play an important role in helping to cut the costs that are incurred by the firm due to the fact that the labor and production costs in China are lower than the costs of the production in Australia but also ensuring that the needs and the aspirations of the customers will be taken into consideration (Housden, 2012). The international strategy of the firm should move away from the standardization to be able to consider the individual and unique needs of the customers who are found in the diverse countries where the firm operates in (Kurtz, 2013). The focus of Apple, Inc. operations in Australia will focus on the need to acquire the startup businesses that have their origins in Australia. Such technology startups were started with the sole aim of the resolution of the varied problems or dealing with the needs of the Australian customers. The focus will thus be put towards the clearer understanding of the interests and the needs of the customers who are found in the market. Finally, the firm should focus on the entry into strategic alliances with the firms that have operations and have a home in Australia so that the firm can be able to reduce the risks that are involved as well as be able to learn from the firm that is registered in Australia.

See the figure below for the action plan that will operationalize the implementation plan for the capabilities systems and structures.

Figure 1: Action plan for the capabilities systems and structures Activity Who is responsible Cost (US $) Timelines Decentralization of innovations Head of R&D Australasia $250,000 per annum Continuous process. The innovation will be decentralized to focus on the inclusion of the products that are geared towards satisfying the needs of the customers who are found in Australia. Distribution of design outlets Business Development Manager $100,000 December 2013- June 2014 Customization of the products to suit the needs of the customers found in Australia Marketing Managers $200,000 per year Continuous process Acquisition of Australian business startups Business Development Manager, Head of Procurement $25 million Ongoing process. The firm will focus on the acquisition of the firms whose products would solve the needs of the customers Development of Strategic alliances Head of procurement, Business Relationship Manager $300,000 p.a. Ongoing process. The firm will focus on the acquisition of the firms whose products would solve the needs of the customers

2.2 Leadership
The leadership of the firm will focus on the transformational leadership rather than the transactional leadership strategies which have been used in the firm. In the transformational, the employees or the staff will be encouraged to be able to undertake the different functions that are geared towards the achievement of the success (Lasserre, 2012). Rather than focus on the achievement of the goals that have been set by the top management of the firm, the focus will be on the need to be able to allow the staff to develop the objectives that they will explore and then allowing the employees to work towards the achievement of such goals (Craig & Campbell, 2012). The strategic alliances that are used in the firm will allow the reduction of the control of the management on the strategies that should be adopted by the firm. The employees in the strategic alliances will be allowed to be able to develop their own objectives and be encouraged to achieve such objectives (Daft, Kendrick & Vershinina, 2010). There will be the reduction on the need to provide monetary rewards and the use of punishments to encourage the customers to be able to undertake the functions that are at play. The employees who are fronted by Apple, Inc. will be encouraged to be at the forefront so that the Apple, Inc.’s brand cannot be diluted.

The acquisitions that are being undertaken in the firm will play a role in the enhancement of the leadership as the innovators who are incorporated into the firm will allow for the reduction of the control by the management of the organization. The use of the transformational leadership will be enhanced even more through the use of the acquisitions as the entrepreneurs who are found in such business startups fancy working alone and setting their own goals rather than following the goals that have been set by the management (Daft, 2010). The leadership style that is adopted by Apple, Inc. in the Australian operations will also support the international strategy as rather than follow the directives from the Apple, Inc. headquarters with regards to the products that are to be manufactured and the prices at which they are supposed to be offered, the employees of the firm have the capability to be able to make a choice about the products that will suit the market based on the needs of the customers (Das, 2012). The focused differentiation will also be properly undertaken through the use of the leadership method that will be adopted in the firm. The differentiation allows for the customization based on the needs of the customers. The firm will thus be able to increase the demand for the diverse products that are offered in the market.
2.3 Culture

There are a number of the elements of the culture that will be considered. The culture entails the elements of the power distance for instance whether a low power distance or a high power distance (McLean, 2005). The current operations of Apple, Inc. in Australia are reminiscent of a high power distance culture where majority of the important decisions in the firm are made in the head office which is located in California, US. The important decisions that were made in the head office of the firm include the decisions with regards to the products that are to be made as well as the design of such products in terms of the look and the feel (Mihaela, & Bratianu, 2012). The firm has been operating under the direction that the management and the people who are found in the firm have the ability to be able to know the needs of the customers even if the customers were not asked. This has been the major problem that is faced in the firm especially in terms of the pricing and eh general feel. The rise of Samsung and the other smartphone markers and the domination of Dell and HP in the PC market can be attributed to the high power distance culture of the firm. It can thus be said that there is a need to be able to reduce the power distance to allow for the massive decentralization of the designs, innovations as well as the marketing activities of the firm. Secondly, there is also the need to move away from the high levels of the individualism that are found in the firm towards the collectivism (Ramachandran, Chong and Ismail, 2011).
The employees especially the innovators who are found in the firm are involved in the individual undertaking of the elements of the designs and the reward systems that are sued in the firm encourage the use of the individual effects in the achievement of the diverse objectives in the firm. However, the Apple’s operations in Australia need to implement the team spirit especially through the use of the team rewards for the employees (Schein, 1990). Rather than focus on the need to reward the individuals, the rewards should be offered to the groups of the employees.

2.4 Change management
Change management will need to be considered in terms of the change in the attitudes of the people who are found in the firm. The change management will be undertaken through the use of the Kurt Lewin’s three stage change model. The unfreezing will involve the acceptance of all the change that is necessary (Paton & McCalman, 2008). The changes that are necessary include the move away from the standardized products to the customization of the products based on the markets where the products will be offered, the needs to change the leadership from the transactional to the transformational and the decentralization of the decision making i.e. in terms of the design and the innovation (Anderson & Ackerman-Anderson, 2010). The above changes are needed so that the firm can be responsive to the needs of the customers, encourage the individual discretion and also help to build the trust between the firm and the employees who are found in the firm. The change involves the adoption of the new ways of doing things for instance the decentralization of the design and the innovation, the focus on the teamwork and the transformational leadership. Finally, there will be the refreeze where the firm shall have revived the stability of the operations.

3.0 Conclusion
Apple, Inc. will continue to have massive successes in the market due to the adoption of the change strategies as well as the implementation of the strategies that are geared towards the consideration of the individual needs of the customers in Australia. The movement away from the standard global products towards the customization of the products for the diverse markets will play a role in the reduction of the levels of the competition that is faced by the firm.