Apple Inc.’s Strategic Audit of Management and Environment

Strategic audit is a technique that puts decision making process into action. It operates by means of check listing issues and areas, hence enabling a systematic analysis in corporate functions.

Board of directors

Initially during the formation of the company, the board comprised of internal employees who were also founders of Apple. Lately, eight board members from the external part of the company were put in charge and comprised the board.

The founder members owned the majority stocks since the company was not publicized by then. However, when Apple was made public, majority of the stock were sold out. Therefore, the current board does not control a significant amount of stocks.

The company’s stock is publicly traded in the financial market. The ordinary shareholders are the only stocks holders with the power to vote.

The board of directors consists of highly experienced personnel. They are skilled and arise from a wide range of professional training.

The board members have served in the board for more than seven years. They are actively involved in the strategic decision making. When Amelia resigns, the board decides to bring Steve Jobs back. This proves their role in strategic decision making.

The Top Management

The top management consists of the Chief Executive Officer (CEO), seven vice presidents, operating officers and technology officers. The monitors and directs negotiations between the company’s employees and board of directors.

The founder CEO had no formal training in the management of commercial organization. However, he had acquired adequate experience from his previous work station. The CEOs who followed were extensive in managerial training and experience from international organizations. They contributed in aligning the company with international management standards. The top management is well equipped with relevant experience associated with the international organization especially due to the growth of Apple international market. The top management comprises of officials from the other companies where Steve Job was the CEO.

The top management has been responsible about the company’s operations recently. Steve has remained as the CEO since he returned to Apple in 1997. Under the current top management, Apple has managed to consolidate its market share and venture into the international market that includes Europe countries such as Japan. Apple has the culture of hiring top management from outside the organization. The company specifically target results oriented individual to join their management team.

The top management has a logical and systematic approach in strategic management. For instance, upon recognition market share loss, Apple designed a counter measure to shun the completion brought about by the collaboration between Microsoft and Intel. As a result, Steve Jobs was brought as a consultant. He brought Next Corporation, where Steve Jobs worked, to join Apple. The acquisition of Next Company added value of Apple since it was envisioned to be the company that will produce the next generation computers. This decision brought Apple back to the industrious company.

The top management is highly involved in the strategic decision making processes. When Steve Jobs returns to Apple as the CEO, he drops many nonperforming projects and introduced the Apple retail shops, iPod portable digital audio player and ITunes music stores. This action shows the extent the top management participates in the strategic management.

The top management has a strong working relationship with the board and the lower employees. Recently, the company neither had a resigning senior manager nor did the company experience industrial unrest from the junior employees.

The company makes strategic decision with utmost social concerns. Although the competition is gigantic in their area of competition, the company has strived to win its market share through innovation of products that meet consumer needs.

The company has respected the environmental laws in all its strategic decisions. However, future law may affect the firm due to the requirement of the company to provide a mechanism for the customer in returning goods after their due life time. This spreading law exists in some state.

The top management own stocks of the company but the stocks are not significant.

The top management consists of trained and experienced professional from various backgrounds. The company is well placed to handle future changes.

External Environment

Sustainability Issues

The company is affected by sustainability issues minimally. Supplies of raw materials, transportation of the workforces and distributions of the finished products are the aspects that affect these issues.

Societal Environment

Economic

The company and the industry at large are affected by the current global economic crises. The company has countered this challenge by creating new markets and product diversifications through innovation.

Technology

Apple has the culture of investing in research in order to create new products and make the existing ones better. The company has maintained technological edge over the others. This is proved by the continued acceptance of apple product even during the economic hardships.

Political legal

Apple main market is in America where there is a stable government and established legal framework. Providential governance exists in the new markets except for some countries of Asia. The legal suits subjected to Apple have no material effect.

Social cultural

The sales of I pad, iPhone, iPod and other music related products has realized tremendous growth. This reveals the attachment that consumers have to music and storage of other social cultural data. This has favored the company products.

Task environment

Threat of new entrance is of low effect as the company has consolidated its market share. It will take a long time before the company becomes a threat.

Bargaining power of customers is critical in Apple designing of product. This factor has a high rating because sales drive the company’s success. Threat of substitute product is of medium concern to the company. Apple has managed to cancel the threat or rival mergers through manufacturing superior products.

Rivalry among competing firms is of a medium rating. Apple has a wide margin leading over the rest. Therefore, rivalry will affect the company minimally.

Relative power of stakeholders is of low rating. The company has not collided with any of the stakeholders. However, the company will need to adjust its relation with stakeholders.

The bargaining power of supplier’s can be rated as high since personal computers share raw materials. The company ability to attract and retain reliable supplies is noteworthy for its survival.

The only immediate environment affecting the company is the supplier and the customers. This is due to the intense completion and continuous change in technology.

External Factors Analysis Summary

External factors Weight Rating Weighted scale Comment
Opportunities
Technological advancement
Financial/economic stability

Sociocultural
Customer bargaining power
Political legal

0.20
0.15

0.15
0.05
0.10

4.75
4.20

3.70
2.00
3.90

0.95
0.63

0.56
0.10
0.39

Well positioned
Well positioned

Speedy progress
Adequately positioned
Speedy progress

Threats
Competitors rivalry
Supplier bargaining power
Threats of new entrant
Rivals mergers
0.10
0.10
0.05
0.10
4.50
3.50
3.00
1.50
0.45
0.35
0.15
0.05
Well positioned
Questionable
Fairly positioned
Well positioned
Total 1.00 3.24