The Role of a Mutual Fund Manager, Essay Example

Founded by two college drop outs in 1976 Apple has today grown into a multinational conglomerate that manufactures electronics as well as  computer hardware  software, and servers.  The company has four prominent product lines which includes the iPad, iPhone, iPod music player, and the Macintosh range of personal computers. Apple  started out primarily as a computer manufacturer and in the 1980’s achieved prominent market share with its top selling range of personal computers including the Macintosh and Power Mac lines. However in the 1990s the company was faced with declining sales and reduced market share because of increasing competition from other computer manufacturers. During this lean period Jobs returned to the helm with a new philosophy emphasizing the creation of a line of easy to use and easily recognizable products. In 2001 a re- structured Apple entered the consumer electronic market and introduced the iPod. The product was an instant hit and continues to be one of the company’s top sellers  After this successful launch the company underwent an image change, dropped the word “computer” from its name and started focusing on the consumer electronics market.  It went on to achieve further success with the launch of the iPhone, the iPod Touch and the iPad. Today Apple has evolved into one of the biggest technology manufacturers in the world yielding an annual revenue of $65 million.

The decision to invest in a company is influenced by various factors. This includes the company’s performance an analysis of its strategy, favorable future trends and an overview of its internal and external capabilities. Apple’s financial performance in recent years has been strong, its strategy has been focused on producing a range of integrated products that are mutually compatible and also interdependent. The strategy has also sought to identify a specific not catered for niche in the consumer electronic market and then produce products which satisfy this particular niche market. The future trends for consumer electronic market indicate a strong demand for products despite the onset of the global recession and tough economic times.  An overview of the firms internal and external capabilities can be provided by conducting a SWOT analysis This is commonly used to evaluate the company’s capabilities both from an internal perspective (i.e. within the company itself) and an external perspective (i.e. in the context of the larger industrial environment.) This analysis highlights Apple’s capabilities in terms of the Company’s internal Strength and Weakness as well as the Opportunities and Threats it encounters as a result of its interaction with the broader industry environment. This framework seeks to establish how the Company uses its internal strengths to counter its weakness and how it can use the opportunities available in the environment to balance the threats that it encounters.(David, 1995)

Strengths

• One of the Company’s key strengths is its strong brand name and the corporate identity it enjoys as a global market leader in the online music industry. In this capacity the brand will always remain synonymous with the online music despite any challenges it might face. This brand equity can be used to attain and sustain competitive advantage both in the short run and the short run.
• Apple’s diversification strategy has meant that it offers a number of consumer technology products to its consumers under the same platform. This gives it a competitive edge over other competitors which do not have as broad a spectrum of products and cater only to selected niche markets

Weakness

The company relies heavily on the leadership and advice of Steve Jobs one of its original founders. Jobs has played a prominent role in the success of the company. It can be accurately said that the company would not have achieved the phenomenal success that it has today without his guidance. However the health of the company’s leader is floundering and this could have an impact on the company’s shares and standing with investors. Future investors may feel that the company has no future without Jobs at the helm and may seek not to invest if the executive leaves his position on the account of ill health or old age. Jobs needs to appoint a successor with similar qualities and strengths that he possesses. This move will help restore investor confidence in the future of the company after Jobs retires.

Opportunity

• Increased use of mobile technology has meant that people use their smart phones to view and download online video. Apple can use this opportunity to launch mobile applications for iTunes which allow users to download video images through their i-phones
• Another opportunity is the acquisition of a prime competitor. This would accord the company both economies of trade and result in a stronger more diversified entity. It would also add value to the company’s shares and help enhance the company’s brand identity and good will.

Threats:

• One of the threats that Apple faces is the possibility of price competition. The online video industry is extremely price competitive and houses a large number of competitors. Some competitors also offer online video content for free. This implies that the company will have to keep its pricing strategies very competitive and focus on increasing profits not by charging higher subscription fees but by capturing a larger chunk of the market.

On the basis of the above SWOT analysis, I would invest in the company because of  future opportunity for growth. The consumer electronic market has proved to be resilient to the economic recession. As one of its major players Apple is at the forefront to exploit the huge potential that this industry has at the moment. As an investor I feel that the company has huge future potential for growth and would definitely put my money in it.

In determining Strategy it is also important to look at the various stake holders who stand to benefit or lose the most as a result of the implementation of the strategy.(Fred, 1995) In the present scenario Apple has four prominent stakeholders. These are the Management of the Company, the employees, the shareholders and the customers of the company.

The stakeholders often hold different opinions regarding strategy implementation. The Management and the shareholders of Apple will be more concerned about increasing profits and establishing competitive advantage. They would favor any marketing strategy which focuses on these two factors.

The customers of the company would be concerned about the impact of the new strategy on the quality and price  of products offered on the site . If the strategy is focused on enhancing the consumer experience and delivering superior service at an economic price it would have a beneficial effect on the customer. The impact of such a strategy would be to attract new customers and retain existing ones

Employees both new and existing will probably favor the implementation of a new strategy if it results in improving the profitability of the company. A marketing strategy aimed at building brand equity would probably benefit the employees as they can reap both the financial and reputation benefits of working for a well known organization.

Apple in the present scenario is satisfying the expectations of all of its stake holders.  Shareholders and Management are satisfied because of growing profits, increasing market share and sustainable competitive advantage. Employees benefit from working in a globally reputed and top performing multinational organization which offers them competitive salaries and other benefits. Apple customers are satisfied because the company is committed to delivering a product that enhances the consumer experience and innovates it continuously to meet customer tastes and preferences.