pple Incs Operations Strategic
Operations Strategy refers to a plan specifying how an organization will designate its resources to support infrastructure and production. Per Tim Laseter, An operations strategy should guide the structural decisions and the evolution of operational capabilities required to achieve the desired competitive position of the organization as a whole. Operations Strategy addresses the question How to go about fulfilling the company operational tasks? (Laseter, 2009).
Apple, since its establishment in 1977, has had a business, marketing, and operations strategy based on highly innovative products, fast product life-cycles, spectacular promotions and introductions, high quality, and premium pricing. Apple has executed this strategy flawless over many years. However, Apples current operations strategy is not supporting the challenges that the company is presently facing. So, what went wrong with Apples Operations Strategy? Apple failed to consider the issues of their operations strategy. Such matters may have seemed technical, low-level and almost useless to the top management. Apples wrong decisions can have far-reaching effects; it can affect long-term competitiveness and, eventually, stock price. To maintain Apples competitive edge, its Vice President of Operations Isaura Perry will address these challenges and formulate a new operations strategy.
Tasks that do not Align with Apples Operational Strategy
and Tasks Weaknesses.
Apple failed to align their strategic objectives with the companys mission and vision. This is a common and easy error to make in strategic planning. Strategic objectives are fundamentals to the strategic plan; they are vital in any organization because they suggest business changes to be achieved to be able to move a company towards its goals. The setting of strategic objectives should be a collaboration between top management, line management and operational staff from engagement to implementation. Also, customers should be involved in the setting of strategic objectives (Mahadevan, 2009).
Apples individual projects are not well coordinated with a program that can be aligned towards their operations strategy. Apple should take the decision of aligning all projects adequately with its strategy to prevent steering a project in the wrong direction. All projects should be communicated to employees per their abilities and roles. Apples employees have not received proper communication for efficient delivery of the company strategic objectives. It is not possible good employees performance if the individual projects are not linked to strategic goals (Tan & Matthews, 2009).
Co-ordination of various initiatives is not getting the much need attention from managers. Top managers see these actions as technical, low-level and almost useless. Apples operations plan should be done in a way that management can provide with feedback on how they are working. Team members should have contact with the upstream or downstream operations. They could share tasks or assist one another in a significant way to be able to have balanced operations.
The effectiveness of Apples operations strategy will depend on the way the company overcomes its weakness in establishing the strategic objectives, as well as executing the strategy (Mahadevan, 2009).
Apples New Operations Strategy
Operations strategy provides a plan for the design and management of the operations function in ways that support the companys business strategy. Apples new operations strategy will focus on specific capabilities (cost, quality, time, and flexibility) of the operation that will give the company a competitive advantage in its market (Greasley, 2009).
Cost
Apple can charge premium prices and still enjoy high-profit margins. This means that within limits, the cost is not the most important consideration for Apple. However, Apples new operation strategy will allow the company to adjust to volume changes by shifting labor, space, and equipment to other products if volume declines (Gong, 2013).
Quality
Apple has a reputation for high quality. Customers purchase from Apple primarily for product features, not because of quality. However, Apple must maintain a reputation for good quality, not necessarily the best quality in the market, just acceptable quality. Higher quality will not generate more customers, but if the quality falls below market expectations could have disastrous effects on Apples new products. In other words, quality only becomes essential if it falls below acceptable levels.
Time/services
Apple should keep their time/services simple and straightforward. They should continue offering fast or on time delivery, and convenient locations.
Flexibility
More than anything else, Apples new operations strategy requires flexibility. This flexibility can come in several forms new product flexibility, volume flexibility or product mix flexibility.
Apple must be able to reconfigure for new products very quickly because of the fast life cycles. It should be able to increase production from pilot to maximum demand quickly because of the initial promotions and short life-cycles. If Apple cannot produce it probably will have lost sales. Since sales forecasts are notoriously inaccurate and new product forecasts even more so, Apple must be prepared for a landslide, a fizzle and anything in between. Then, as the product life cycle nears its end, it should be able to decrease production and prepare for the next new product.
Analysis of the Structure of the Competitive Priorities and Infrastructure of the Production Process
Competitive priorities
Apple mostly focuses on innovation in the digital market. Its vision is to contribute to the world by making tools for the mind that advance mankind. (Rowland, 2015). With this drive, Apple creates most of its product and services that are the industry benchmark. It focuses on the limited product portfolio and creates innovation in this space. Due to this narrow focus, it has lost most of its market share to companies like Microsoft, and Samsung. Nowadays, Apple is entering the music industry and thrives to revolutionize it. The AirPort Express system is one of Apples new methods of staying on the top of its innovation.
Infrastructure
Apple subcontracts its manufacturing to contract manufacturers like Foxconn, Pegatron Corporation, Quanta Computers. This is so that it can focus on design, testing and developing software. It also concentrates on what is manufacture meeting specification. Presently Apple has 18 manufacturing locations spread around the globe from Ireland, USA, and China to Brazil. Its total investment in production-related infrastructure is staggering $15 billion in 2016. It has about 478 retail stores located in 17 countries. It is the largest company by total asset valuation (Apple, n.d.). Distribution related, Apple operates some of its facilities around the clock and after manufacturing data is automatically feed into a system and sorted before being palletized. This system is utilized to divert the shipment.
New Enablers
Enablers of variety
The granularity of range of product in Apple must be small. Apple has always been the pioneer in technology in gadgets market. It is the first computer making company to have a music industry. It developed the first unibody design that helped minimize resources while manufacturing more products. Thus, it must concentrate on breakthrough innovation and trim its variety so that it can focus on this product line and make more innovative products.
Pros- Will create customer delight by surprising new technology and innovation. The products will do well in the market also the organization will be lean and more sustainable as the company will grow vertically.
Cons- Competitors may copy its breakthrough innovation in products and may sell it to customers at a low price. Thus, Apple will lose market share to these companies like it has lost it to Samsung.
Project selection criteria
Apple should be very choosy when it comes to the selection of projects. It must consider the various aspects while making this decision such financial, strategic, urgency criteria, etcetera. Project selection must be customer oriented rather than internally oriented.
Pros- the Company will take its decision based on returns in the market. Its products will be strategically developed.
Cons- But this will result in a shift of Apple from innovation-based to a market-based company.
Location strategy
Selection of location such that the operations cost is minimized. Most Apple stores are in urban centers to maximize foot traffic and brand exposure. At present, the company has more than 450 stores in 16 countries (Rowland, 2015).
Pros- The strategic location will make the company leaner and will help the organization to develop sustainability.
Cons- will hinder Apple to reach a new market.
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