Helpful Strategic Management Audit Information Resources The following links can assist you obtain information for your Company Audit Global Edge MSU http://globaledge.msu.edu/ibrd/ibrd.asp Background Country Notes http://www.state.gov/r/pa/ei/bgn/ US Department of Commerce http://www.stat-usa.gov Organization for Economic Cooperation and Development http://www.oecd.org/eco/surv/esu.htm Going Global http://www.going-global.com Current Information on Importing & Exporting http://www.smartbiz.com/sbs/cats/ie.htm The Country Commercial Guides (CCG) http://www.usatrade.gov/website/ccg.nsf Center for International Business Education and Research at Michigan State University (MSU-CIBER). http://ciber.bus.msu.edu GICS Industry S&P 500 http://www2.standardandpoors.com/spf/pdf/ index/GICSIndexDocument.PDF Brint http://brint.com/International.htm UNESCO (United Nations Educational, Scientific, and Cultural Organization) http://www.unesco.org World Bank http://worldbank.org World Trade Organization http://www.wto.org International Trade Administration http://www.ita.doc.gov/ World Chambers Network (WCN) http://www.worldchambers.net/index.htm Atlapedia Online http://www.atlapedia.com/ Example of Strategic Audit1 Maytag Corporation Case I. Current Situation A. Current Performance Poor financials, high debt load, first losses since 1920s, price/earnings ration negative. B. Strategic Posture 1. Mission Developed in 1989 for the Maytag Company: \"To provide our customers with products of unsurpassed performance that last longer, need fewer repairs, and are produced at the lowest possible cost.\" Updated in 1991: \"Our collective mission is world class quality.\" Expands Maytag's belief in product quality to all aspects of operations. 2. Objectives \"To be profitability leader in industry for every product line Maytag manufacturers.\" Selected profitability rather than market share. \"To be number 1 in total customer satisfaction.\" \"To grow the North American appliance business and become the third largest appliance manufacturer (in unit sales) in North America.\" To increase profitable market share growth in North American appliance and floor care business, 6.5% return on sales, 10% return on assets, 20% return on equity, beat competition in satisfying customers, dealer, builder and endorser, move into third place in total units shipped per year. 3. Strategies Global growth through acquisition and alliance with Bosch Siemens. Differentiate brand names for competitive advantage. Create synergy between companies, product improvement, investment in plant and equipment. 4. Policies Cost reduction is secondary to high quality. Promotion from within. Slow, but sure R&D: Maytag slow to respond to changes in market. 1. Essentials of Strategic Management Thomas L. Wheelen J. David Hunger Prentice Hall II. Strategic Managers A. Board of Directors 1. 2. 3. 4. Fourteen members- 11 are outsiders Well-respected Americans, most on board since 1986 or earlier. No international or marketing backgrounds. Time for a change? B. Top Management 1. 2. 3. 4. Top management promoted from within the Maytag Company. Very experienced in the industry. Responsible for current situation./ May be too parochial for global industry -- may need new blood. III. External Environment A. Societal Environment 1. Economic a. Unstable economy but recession ending, consumer confidence growing could increase spending for big ticket items like houses, cars and appliances. b. Individual economies becoming interconnected into a world economy. 2. Technological a. Fuzzy logic technology being applied to sense and measure activities. b. Computers and information technology increasingly important. 3. Political-Legal a. NAFTA, European Union, other regional trade pacts opening doors to markets in Europe, Asia, Latin America that offer enormous potential. b. Breakdown of communism means less chance of world war. c. Environmentalism being reflected in laws on pollution and energy usage. 4.Sociocultural a. Developing nations desire goods seen on TV. b. Middle-aged baby boomers want attractive, high quality products, like BMWs and Maytag. c. Dual career couples increases need for labor-saving appliances, second cars, and day care. d. Divorce and career mobility means need for more houses and goods to fill them. B. Task Environment 1.North American market is mature and extremely competitive -- vigilant consumers demand high quality with low price in safe, environmentally sound products. 2.Industry going global as North American and European firms expand internationally. 3.Rivalry High: Whirlpool, AB Electrolux, GE have enormous resources and developing global presence. 4.Buyers' Power Low: Technology and materials used in manufacture can be sourced worldwide. 5.European design popular and consumer desire for technologically advanced appliances. 6.Power of Other Stakeholders Medium: Quality, safety, environmental regulations increasing. 7.Distributor's Power High: Super retailers more important, mom and pop dealers less. 8.Substitutes unlikely. 9.Entry Barriers High: New entrants unlikely; only large appliance firms can enter other markets. IV. Internal Environment A. Corporate Structure 1. Divisional structure: appliance manufacturing and vending machines. Floor care managed separately. 2. Centralized major decisions by Newton corporate staff with a timeline of about 3 years. B. Corporate Culture 1. Quality key ingredient -- commitment to quality shared by executives and workers 2. Much of corporate culture is based on founder F.L. Maytag's personal philosophy, including concern for quality, employees, local community, innocation, and performance. 3. Acquired companies, except for European, seem to accept dominance of Maytag culture. C. Corporate Resources 1.Marketing a.Maytag brand lonely repairman advertising successful. b. Efforts focus on distribution - combining 3 sales forces into 2, concentrating on major retailers. (Cost $95 million for this reconstructing) c. Hoover's well-publicized marketing fiasco involving airline tickets. 2. Finance a. b. c. Revenues are up slightly, operating income is down significantly. Some key ratios are troubling, such as a 57% debt/asset ratio, 132% long-term debt/equity ratio. No room for more debt to grow company. Net income is 400% less than 1988, based on common-size income statements. 3. R&D a. Process-oriented with focus on manufacturing process and durability. b. Maytag is becoming a technology follower, taking too long to get product innovations to market (competitors put out more in last 6 months than prior 2 years combines), lagging in fuzzy logic and other technological areas. 4. Operations a. b. Maytag's core competence - continual improvement process kept it dominant in the U.S. market for many years Plants are aging and may be losing competitiveness as rivals upgrade facilities. 5. Human Resources a. b. c. Traditionally very good relations with unions and employees. Labor relations increasingly strained, with 2 salary raise delays, and layoffs of 4,500 employees at Magic Chef. Unions express concern at new, more distant tone from Maytag Corporation. 6. Information Systems a. b. Not mentioned in case; Hoover fiasco in Europe suggests information systems need significant upgrading. Critical area where Maytag may be unwilling or unable to commit resources needed. V. Analysis of Strategic Factors A. Situational Analysis (SWOT) 1. Strengths a. Quality Maytag culture. b. Maytag well-known and respected brand. c. Hoover's international orientation. d. Core competencies in process R&D and manufacturing. 2. Weaknesses a. Lacks financial resources of competitors b. Poor global positioning; Hoover weak on continent. c. Product R&D and customer service innovation areas of serious weakness. d.Dependent on small dealers. 3. Opportunities a. Economic integration of European Community. b. Demographics favor quality. c. Trend to superstores. 4. Threats a. Trend to superstores. b. Aggressive rivals - Whirlpool and Electrolux. c. Japanese appliance companies - new entrants? B. Review of Current Mission and Objectives 1. Current mission appears appropriate. 2. Some of the objectives are really goals and need to be quantified and given time horizons. VI. Strategic Alternatives and Recommended Strategy A. Strategic Alternatives 1. Growth Through Concentric Diversification: Acquire a company in a related industry like commercial appliances. a. Pros: Product/market synergy created by acquisition of related company b. Cons: Maytag does not have the financial resources to play this game. 2. Pause Strategy: Consolidate various acquisitions to find economies and to encourage innovation among the business units. a. Pros: Maytag needs to get its financial house in order and get administrative control over its recent acquisitions. b.Cons: Unless it can grow through a stronger alliance with Bosch Siemens or some other backer, Maytag is a prime candidate for takeover because of its poor financial performance in recent years, and it is suffering from the initial reduction in efficiency inherent in acquisition strategy. 3. Retrenchment: Sell Hoover's foreign major home appliance businesses (Australia and the United Kingdom) to emphasize increasing market share in North America. a. Pros: Divesting Hoover improves bottom line and enables Maytag Corp. to focus on North America while Whirlpool, Electrolux, and GE are battling elsewhere. b. Cons: Maytag may be giving up its only opportunity to become a player in the coming global appliances industry. B. Recommended Strategy 1. Recommended pause strategy, at least for a year, so Maytag can get a grip on its European operation and consolidate its companies in a more synergistic way. 2. Maytag quality must be maintained and continued shortage of operating capital will take its toll, so investment must be made in R&D. 3. Maytag may be able to make the Hoover U.K. investment work better since the recession is ending and the EU countries are closer to integrating than ever before. 4. Because it is only an average competitor, Maytag needs the Hoover link to Europe to provide a jumping off place for negotiations with Bosch-Siemens that could strengthen their alliance. VII. Implementation A. The only way to increase profitability in North America is to further involve Maytag with the superstore retailers, sure to anger the independent dealers, but necessary for Maytag to compete. B. Board members with more global business experience should be recruited with an eye toward the future, especially with expertise in Asia and Latin America. C. Product R&D needs to be improved, as does marketing, to get new products on line quickly. VIII. Evaluation and Control A. MIS needs to be developed for speedier evaluation and control. While the question of control vs. autonomy is \"under review,\" another Hoover fiasco may be brewing. B. The acquired companies do not all share the Midwestern work ethic or the Maytag Corporation culture and Maytag's managers must inculcate these values into the employees of all acquired companies. C. Systems should be developed to decide if the size and location of Maytag manufacturing plants is still correct and to plan for the future; industry analysis indicates that smaller automated plants may be more efficient now than in the past. Strategic Audit of a Corporation1 I. Current Situation A. Current Performance How did the corporation perform the past year overall in terms of return on investment, market share and profitability? B. Strategic Posture What are the corporation's current mission, objectives, strategies and policies? 1. Are they clearly stated or are they merely implied from performance ? 2. Mission: What business(es) is the corporation in? Why? 3. Objectives: What are the corporate, business, and functional objectives? Are they consistent with each other, with the mission and with the internal and external environments? 4. Strategies: What strategy or mix of strategies is the corporation following? Are they consistent with each other, with the mission, objectives, and strategies, and with the internal and external environments? 5. Policies: What are they? Are they consistent with each other, with the mission, objectives and strategies and with the internal and external environments? 6. Do the current mission, objectives, strategies and policies reflect the corporation's international operations, whether global or multidomestic? II. Corporate Governance A. Board of Directors 1. Who are they? Are they internal or external? 2. Do they own significant shares of stock? 3. Is the stock privately held or publicly traded? Are there different classes of stock with different voting rights? 4. What do they contribute to the corporation in terms of knowledge, skills, background, and connections? If the corporation has international operations, do board members have international experience? 5. How long have they served on the board? 6. What is their level of involvement in strategic management? Do they merely rubberstamp top management's proposals or do they actively participate and suggest future directions? 1. Source: Essentials of Strategic Management Thomas L. Wheelen and J. David Hunger Prentice Hall B. Top Management 1. What person or group constitutes top management? 2. What are top management's chief characteristics in terms of knowledge, skills, background and style? If the corporation has international operations, does top management have international experience? Are executives from acquired companies considered part of the top management team? 3. Has top management been responsible for the corporation's performance over the past few years? How many managers have been on their current position for less than three years? Were they internal promotions or external hires? 4. Has it established a systematic approach to strategic management? 5. What is its level of involvement in the strategic management process? 6. How well does top management interact with lower-level managers and with the board of directors? 7. Are strategic decisions made ethically in a socially responsible manner? 8. What role so stock options play in executive compensation? 9. Is top management sufficiently skilled to cope with likely future challenges? III. External Environment: Opportunities and Threats (SWOTs) A. Societal Environment 1. What general environment forces are currently affecting both the corporation and the industries in which it competes? Which present current or future threats? Opportunities? a. Economic b. Technological c. Political-legal d. Sociocultural 2. Are these forces different in other regions of the world? B. Task Environment 1. What forces drive industry competition? Are these forces the same globally or do they vary from country to country? a. Threat of new entrants b. Bargaining power of buyers c. Threat of substitutes products or services d. Bargaining power of suppliers e. Rivalry among competing firms f. Relative power of unions, governments, special interest groups, etc. 2. What key factors in the immediate environment (that is, customers, competitors, suppliers, creditors, labor unions, governments, trade associations, interest groups, local communities, and shareholders) are currently affecting the corporation? Which are current or future threats? Opportunities? C. Summary of External Factors (List in EFAS Table) Which of these forces and factors are the most important to the corporation and to the industries in which it competes at the present time? Which will be important in the future? IV. Internal Environment: Strengths and Weaknesses (SWOTs) A. Corporate Structure 1. How is the corporation structured at present? a. Is the decision-making authority centralized around one group or decentralized to many units? b. Is it organized on the basis of functions, projects, geography, or some combination of these? 2. Is the structure clearly understood by everyone in the corporation? 3. Is the present structure consistent with current corporate objectives, strategies, policies, and programs, as well as with the firm's international operations? 4. In what ways does this structure compare with those of similar corporations? B. Corporate Culture 1. Is there a well-defined or emerging culture composed of shared beliefs, expectations, and values? 2. Is the culture consistent with the current objectives, strategies, policies, and programs? 3. What is the culture's position on important issues facing the corporation (that is, on productivity, quality of performance, adaptability to changing conditions, and internationalization)? 4. Is the culture compatible with the employees' diversity and backgrounds? 5. Does the company take into consideration the values of each nation's culture in which the firm operates? C. Corporate Resouces 1. Marketing a. What are the corporation's current marketing objectives, strategies, policies, and programs? i. Are they clearly stated, or merely implied from performance and/or budgets? ii. Are they consistent with the corporation's mission, objectives, strategies, policies and with internal and external environments> b. How well is the corporation performing in terms of analysis of market position and marketing mix (that is, product, price, place and promotion) in both domestic and international markets? What percentage of sales comes from foreign operations? Where are current products in product life cycle? i. What trends emerge from this analysis? ii. What impact have these trends had on past performances and how might these trends affect future performance? iii. Does this analysis support the corporation's past and pending strategic decisions? iv. Does marketing provide the company with a competitive advantage? c. How well does this corporation's marketing performance compare with that of similar corporations? d. Are marketing managers using accepted marketing concepts and techniques to evaluate and improve product performance? (Consider product life cycle, market segmentation, market research, and product portfolios.) e. Does marketing adjust to the conditions in each country in which it operates? f. What is the role of the marketing manager in the strategic management process? 2. Finance a. What are the corporation's current financial objectives, strategies, policies, and programs? i. Are they clearly stated or merely implied from performance and/or budgets? ii. Are they consistent with the corporation's mission, objectives, strategies, policies and with internal and external environments? b. How well is the corporation performing in terms of financial analysis? (Consider ratios, common-size statements, and capitalization structure.) How balanced in terms of cash flow is the company's portfolio of products and businesses? i. What trends emerge from this analysis? ii. Are there any significant differences when statements are calculated in constant versus reported dollars? iii. What impact have these trends had on past performance and how might these trends affect future performance? iv. Does this analysis support the corporation's past and pending strategic decisions? v. Does finance provide the company a competitive advantage? c. How well does this corporation's financial performance compare with that of similar corporations? d. Are financial managers using accepted financial concepts and techniques to evaluate and improve current corporate and divisional performance? (Consider financial leverage, capital budgeting, ratio analysis, and managing foreign currencies.) e. Does finance adjust to the conditions in each country in which the company operates? f. What is the financial manager's role in the strategic management process? 3. Research and Development (R&D) a. What are the corporation's current R&D objectives, strategies, policies and programs? i. Are they clearly stated, or merely implied from performance or budgets? ii. Are they consistent with the corporation's mission, objectives, strategies, policies and with internal and external environments? iii. What is the role of technology in corporate performance? iv. Is the mix of basic, applied and engineering research appropriate given the corporate mission and strategies? v. Does R&D provide the company with a competitive advantage? b. What return is the corporation receiving from its investment in R&D? c. Is the corporation competent in technology transfer? Does it use concurrent engineering and cross-functional work teams in product and process design? d. What role does technological discontinuity play in the company's products? e. How well does the corporation's investment in R&D compare with the investments of similar corporations? f. Does R&D adjust to the conditions in each country in which the company operates? g. What is the role of the R&D manager in the strategic management process? 4. Operations and Logistics a. What are the corporation's current manufacturing/service objectives, strategies, policies and programs? i. Are they clearly stated, or merely implied from performance or budgets? ii. Are they consistent with the corporation's mission, objectives, strategies, policies and with internal and external environments? b. What is the type and extent of operations capabilities of the corporation? How much is done domestically versus internationally? Is the amount of outsourcing appropriate to be competitive? Is purchasing being handled appropriately? i. If the corporation is product-oriented, consider plant facilities, type of manufacturing system (continuous mass production intermittent job shop, or flexible manufacturing), age and type of equipment, degree and role of automation and/or robots, plant capacities and utilization, productivity ratings, availability and type of transportation. ii. If the corporation is service-oriented, consider service facilities (hospital, theater, or school buildings), type of operations systems (continuous service over time to same clientele or intermittent service over time to varied clientele), age and type of supporting equipment, degree and role of automation and use of mass communication devices (diagnostic machinery, videotape machines), facility capacities and utilization rates, efficiency ratings of professional and service personnel and availability and type of transportation to bring service staff and clientele together. c. Are manufacturing or service facilities vulnerable to natural disasters, local or national strikes, reduction or limitation of resources from suppliers, substantial cost increases of materials, or nationalization by governments? d. Is there an appropriate mix of people and machines, in manufacturing firms, or of support staff to professionals (in service firms)? e. How well does the corporation perform relative to the competition? Is it balancing inventory costs (warehousing) with logistical costs (just-in-time)? Consider costs per unit of labor, material, and overhead; downtime; inventory control management and scheduling of service staff; production ratings; facility utilization percentages; and number of clients successfully treated by category (if service firm) or percentage of orders shipped on time (if product firm). i. What trends emerge from this analysis? ii. What impact have these trends had on past performance and how might these trends affect future performance? iii. Does this analysis support the corporation's past and pending strategic decisions? iv. Does operations provide the company with a competitive advantage? f. Are operations managers using appropriate concepts and techniques to evaluate and improve current performance? Consider cost systems, quality control and reliability systems, inventory control management, personnel scheduling, TQM, learning curves, safety programs, and engineering programs that can improve efficiency of manufacturing or of service. g. Does operations adjust to the conditions in each country in which it has facilities? 6. Information Systems (IS) a. What are the corporation's current IS objectives, strategies, policies and programs? i. Are they clearly stated, or merely implied from performance and/or budgets? ii. Are they consistent with the corporation's mission, objectives, strategies, policies, and with internal and external environments? b. How well is the corporation's IS performing in terms of providing a useful database, automating routine clerical operations, assisting managers in making routine decisions, and providing information necessary for strategic decisions? i. What trends emerge from this analysis? ii. What impact have these trends had on past performance and how might these trends affect future performances? iii. Does this analysis support the corporation's past and pending strategic decisions? iv. Does IS provide the companu with a competitive advantage? c. How does this corporation's IS performance and state of development compare with that of similar corporations\" Is it appropriately isomg the Internet, intranet and extranets? d. Are IS managers using appropriate concepts and techniques to evaluate and improve corporate performance? Do they know how to build and manage a complex database, establish Web sites with firewalls, conduct system analyses, and implement interactive decision-support systems? e. Does the company have a global IS and Internet presence? Does it have difficulty moving data across national boundaries? f. What is the role of the IS manager in the strategic management process? D. Summary of Internal Factors (List in IFAS Table) Which of these factors are core competencies? Which, if any, are distinctive competencies? Which of these factors are the most important to the corporation and to the industries in which it competes at the present time? Which might be important in the future? V. Analysis of Strategic Factors (SWOT) A. Situational Analysis (List in SFAS Table) What are the most important internal and external factors (Strengths, Weaknesses, Opportunities, Threats) that strongly affect the corporation's present and future performance? List eight to ten strategic factors. B. Review of Mission and Objectives 1. Are the current mission and objectives appropriate in light of the key strategic factors and problems? 2. Should the mission and objectives be changed? If so, how? 3. If changed, what will be the effect on the firm? VI. Strategic alternatives and Recommended Strategy A. Strategic Alternatives (See Towns Matrix) 1. Can the current or revised objectives be met by the simple, more careful implementing of current strategies? (for example, fine-tuning them?) 2. What are the major feasible alternative strategies available to this corporation? What are the pros and cons of each? Can corporate scenarios be developed and agreed upon? (Alternatives must fit societal environment, industry and company for next 3 to 5 years,) a. Consider stability, growth, and retrenchment as corporate strategies. b. Consider cost leadership and differentiation as business strategies. c. Consider any functional strategic alternatives that might be needed to reinforce an important corporate or business strategic alternative. B. Recommended Strategy 1. Specify which of the strategic alternatives you recommend for the corporate, business and functional levels of the corporation. Do you recommend different business or functional strategies for different units of the corporation? 2. Justify your recommendation in terms of its ability to resolve both long- and short-term problems and effectively deal with the strategic factors. 3. What policies should be developed/ revised to guide effective implementation? 4. What is the impact of your recommended strategy on the company's core and distinctive competencies? VII. Implementation A. What kinds of programs and action plans (for example, restructuring the corporation or instituting TQM) should be developed to implement the recommended strategy? 1. Who should develop these programs? 2. Who should be in charge of these programs? B. Are the programs financially feasible? Can pro forma budgets be developed and agreed upon? Are priorities and timetables appropriate to individual programs? C. Will new standard operating procedures need to be developed? VII. Evaluation and Control A. Is the current information system capable of providing sufficient feedback on implementation activities and performance? Can it measure strategic factors? 1. Can performance results be pinpointed by area, unit, project, or function? 2. Is the information timely? B. Are adequate control measures in place enable the recommended strategic plan? 1. Are appropriate standards and measures being used? 2. Are reward systems capable or recognizing and rewarding good performance? Instructions Students will be expected to analyze a (global) FORTUNE 500 company and submit a 5 page strategic audit paper that describes the case issues, alternatives and your recommendations for significantly increasing company performance. The company must be one of the following: Nestle, Proctor & Gamble, Google, Starbucks, Merck, Apple, or Dell. A useful content and format template for this strategic management audit/case study is outlined together with other useful information in the Strategic Audit navigation menu tab. The paper should include a half-page executive summary, and apply concepts, principles and techniques learned in our strategic management course, including environmental and industry analysis, SWOT analysis, key issues, alternative strategies, and conclusions and recommendations, as illustrated in the Strategic Audit Template. The purpose of the Strategic Audit is to identify key problems/opportunities and to formulate at least one mission-directed Corporate or Business Unit strategy based on the company's external political, legal, technology, and socio-economic forces; its internal resources and organizational factors; and its global set of industry and competitive threats and opportunities. The analysis-based strategy could, for example, result from the implications of an important contemporary business trend such as outsourcing or supply chain innovation, information technology advances, cultural change, merger/acquisition, globalization, or other related factors that could significantly impact company performance. Note: It is essential that this assignment be completed by the individual student with no collaboration or interaction with others. Executive Summary A strategic audit reviews the company plans and strategies to point out on weaknesses and a company shortcomings and evaluates how appropriate the strategic plans are. This paper will focus on Apple strategic audit by addressing the company's shortcoming and recommend on new strategies. Apple's main objectives include creating new products, to dictate and innovate the movement for future technology, to expand nationwide chains of their stores and to increase profit margins, to sustain and expand their strongly branded name .Apple strategies include strategically pricing all their products, launching new products before their competitors as well as ensuring that their products are of high quality. Based on the existing strategies, PESTEL and SWOT analysis some of the alternative strategies that Apple should consider adapting is developing a virus free system, opening new stores worldwide, develop speech recognition programs, invest on more new smartphones, as well as improving on their design and concentrating on the entire product. This will ensure that the company continues to be at the top compared to other technology company. Strategic Audit - Apple Inc. I. Current Situation A. Current Performance Apple has been performing well for the past years; in fact, the company's return on investment has been growing. The company still maintains strong operating cash flows (Yoffie, 2012). The company is also ranked as the best well performing tech company in the world based on revenue and its innovative products. B. Strategic Posture 1. Mission: The company current mission is to \"design Macs the best personal computers in the world along with OS X iLife, iWork, and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone with its revolutionary iPhone and App store, and is defining the future of mobile media and computing devices with iPad. 2. Objectives a) Continue creating groundbreaking products by introducing something new, b) c) d) e) To dictate and innovate the movement for future technology, To expand nationwide chains of their stores, To enter and sustain premium pricing, to increase profit margins, To sustain and expand their strongly branded name as well as to build a hype and anticipation market for their new upcoming products. 3. Strategies a) Placing all large stores in large markets in order to expand nationwide. b) Placing their products in all retail stores dealing with electronic products and in all e-commerce website. c) d) Studying the market in order to understand what customers want Great team building culture and a strong research and development team (Delac, 2011). e) The company is trendsetter where their launch new products before their competitors. f) Use of new conference and events to release information about their new products before it even hit the market. g) All their strategies are consistent with their mission and policies and the overall objectives of the organization (Barney, 1995). II. A. Corporate Governance Top leadership and Board of directors 1. Apple top leadership led by Tim Cook the CEO and the Board of directors has served in for a very long time 2. The board of directors was reelected during the annual shareholders meeting in March 2015. 3. Tim Cook the CEO joined Apple in 1998 and became the CEO in 2011. The Board of directors together with the top management plays major strategic management roles in the overall success of the company. 4. The Board of directors actively participates in major managerial decisions. Starting with the CEO the top managers are skilled to cope with future challenges that may arise. III. A. External Environment Societal environment 1. Political factors - the company being one of the top technology companies in America and having accumulated so much money in the bank can be affected by high corporation taxes in the US. The company also depends on lower cost manufacturing in China such that political unrest in China can affect the company. 2. Economic factors - increased labor cost in China could affect the company as well as an increase in exchange rates making it difficult for Apple to market in China and Europe. 3. Social factors - on the other hand, affect Apple such that growth in consumer spending makes people particularly in Africa not familiar with Apple product. 4. Technology factors - The Company has to keep on innovating in new products to keep up with competitors such as Google. Growing high demand in the use of smartphones and tablets has reduced Apple's demand for personal computers. 5. Legal factors - Use of highly regulated financial sector such as Apple Pay, it leads to increased level of litigation. B. Task Environment 1. There is the threat of new entrants and the high competition in the market. 2. Technological factors are very important for the survival of the company. The company must maintain its innovative products for their survival. 3. Industrial competition is high and Apple is competing with other companies such as Google, Samsung, and Amazon. 4. The bargaining power of buyers is very low since the loss of one customer present a negligible amount compared to the company total revenue 5. The threat of new entrants in the market is not a threat to Apple they have already established a very big market share 6. The bargaining power of suppliers is week due to potential a high number of suppliers where Apple can choose from a list of a large number of suppliers 7. The threat of new substitutes is relatively low for Apple because despite the existence of substitute product none of the product has the same capability with Apple product. IV. A. Internal Environment Corporate Structure and Corporate Culture 1. Most of the decisions are made at the top level; in fact, Tim Cook almost controls everything in the organization. 2. The structure only allows limited flexibility. 3. The company has adopted the culture of only selecting the best workers as well as a culture of marinating the company's secret. 4. The company also supports the culture of creativity and innovation as well as a culture of moderate combativeness as portrayed by Steve Jobs (Raimond 1996). B. Corporate Resources 1. Marketing a) The company heavily relies on product placement and buzz created by positive reviews in the media. b) The company has also embraced a free trial program and making use of conferences to give information about their products before they are actually launched. c) 2. Apple has marketing managers who use their expertise to improve and support on better marketing technique and actively participate in marketing decision in the strategic management process. Finance a) The company financial objective is to continue increasing in its overall profit and return on investments as well as increasing the company's market share. In terms of revenue, the company remains on top compared to other companies operating in the same industry. c) The company has also high liquidity ratio and quick ratio. b) Financial managers help in making an important financial decision in the strategic management process. Research and development d) 3. a) The company is active in research and development in order to maintain their highly innovative products and cope with the rapid changing technology. 4. Operations and Logistics a) What are the corporation's current manufacturing/service objectives, strategies, policies and programs? (1) Are they clearly stated, or merely implied from performance or budgets? (2) Are they consistent with the corporation's mission, objectives, strategies, policies and with internal and external environments? b) What is the type and extent of operations capabilities of the corporation? How much is done domestically versus internationally? Is the amount of outsourcing appropriate to be competitive? Is purchasing being handled appropriately? (1) i. If the corporation is product-oriented, consider plant facilities, type of manufacturing system (continuous mass production intermittent job shop, or flexible manufacturing), age and type of equipment, degree and role of automation and/or robots, plant capacities and utilization, productivity ratings, availability and type of transportation. (2) ii. If the corporation is service-oriented, consider service facilities (hospital, theater, or school buildings), type of operations systems (continuous service over time to same clientele or intermittent service over time to varied clientele), age and type of supporting equipment, degree and role of automation and use of mass communication devices (diagnostic machinery, videotape machines), facility capacities and utilization rates, efficiency ratings of professional and service personnel and availability and type of transportation to bring service staff and clientele together. c) Are manufacturing or service facilities vulnerable to natural disasters, local or national strikes, reduction or limitation of resources from suppliers, substantial cost increases of materials, or nationalization by governments? d) Is there an appropriate mix of people and machines, in manufacturing firms, or of support staff to professionals (in service firms)? e) How well does the corporation perform relative to the competition? Is it balancing inventory costs (warehousing) with logistical costs (just-in-time)? Consider costs per unit of labor, material, and overhead; downtime; inventory control management and scheduling of service staff; production ratings; facility utilization percentages; and number of clients successfully treated by category (if service firm) or percentage of orders shipped on time (if product firm). (1) What trends emerge from this analysis? (2) What impact have these trends had on past performance and how might these trends affect future performance? (3) Does this analysis support the corporation's past and pending strategic decisions? 5. (4) Does operations provide the company with a competitive advantage? f) Are operations managers using appropriate concepts and techniques to evaluate and improve current performance? Consider cost systems, quality control and reliability systems, inventory control management, personnel scheduling, TQM, learning curves, safety programs, and engineering programs that can improve efficiency of manufacturing or of service. g) Does operations adjust to the conditions in each country in which it has facilities? Information Systems (IS) a) What are the corporation's current IS objectives, strategies, policies and programs? (1) i. Are they clearly stated, or merely implied from performance and/or budgets? (2) Are they consistent with the corporation's mission, objectives, strategies, policies, and with internal and external environments? b) How well is the corporation's IS performing in terms of providing a useful database, automating routine clerical operations, assisting managers in making routine decisions, and providing information necessary for strategic decisions? (1) What trends emerge from this analysis? (2) ii. What impact have these trends had on past performance and how might these trends affect future performances? (3) Does this analysis support the corporation's past and pending strategic decisions? (4) Does IS provide the company with a competitive advantage? c) How does this corporation's IS performance and state of development compare with that of similar corporations\" Is it appropriately isomg the Internet, intranet and extranets? d) Are IS managers using appropriate concepts and techniques to evaluate and improve corporate performance? Do they know how to build and manage a complex database, establish Web sites with firewalls, conduct system analyses, and implement interactive decision-support systems? e) Does the company have a global IS and Internet presence? Does it have difficulty moving data across national boundaries? f) What is the role of the IS manager in the strategic management process? C. Summary of Internal Factors (List in IFAS Table) Which of these factors are core competencies?Which, if any, are distinctive competencies?Which of these factors are the most important to the corporation and to the industries in which it competes at the present time? Which might be important in the future? (Paragraph format) V. Analysis of Strategic Factors A. Situation Analysis What are the most important internal and external factors (Strengths, Weaknesses, Opportunities, Threats) that strongly affect the corporation's present and future performance? List eight to ten strategic factors. B. Review of mission and objectives 1. The mission statement should remain the same since the changes were not made a long time ago; 2. Other objectives that the company can consider include: a) The company can consider adding a whole day for research and development. The company highly depends on research and development to improve on the existing products particularly with the high growth in technology. c) it should also consider selecting a group of employees who will be actively involved in research and development. d) Another objective that the company should adapt is having a group of people who use their product daily for the trial run. b) VI. A. Strategic Alternative and Recommended Strategy Strategic Alternative 1. Opening new Apple stores worldwide to continue increasing their market share. The company also needs to continue being the first mover 2. The company can as well make the geographical revenue break up more evenly distributed. 3. Improve on the company flexibility B. Recommendation strategy 1. Develop virus free systems to avoid loss of valuable information 2. Making new Apple iPhone with better features to fit the needs of the customers, 3. Developing speech recognition programs which will generally improve the overall performance of their products. VII. Implementation A. Develop virus free system and speech recognition system 1. The top management and project managers are responsible for the development of the system 2. The systems should be developed within a year. VIII. Evaluation and Control Apple can get the progress of the systems development using the current system which can provide sufficient feedback on a timely manner. A. B. C. The performance can be pointed out in terms of the system In case of any deviation from what is expected control measures should be taken. References Barney, J. B. (1995). Looking inside for competitive advantage. The Academy of Management Executive,, 9(4), 49-61. Delac, G. S. (2011). Emerging security threats for mobile platforms. In MIPRO, 2011 Proceedings of the 34th International Convention (pp. 1468-1473). IEEE. Raimond, P. (1996). Two styles of foresight: Are we predicting the future or inventing it?. . Long Range Planning,, 29(2), 208-214. Yoffie, D. B. (2012). Apple Inc. in 2012. Harvard Business School