Business Strategy Assignment 1 BTEC Nguyen Huu Phong 2017 tại University of Greenwich Viet Nam, đây là một trong những môn rất quan trọng và cần thiết cho những người muốn theo nghành businness cụ thể là human resource management như mình. Bài assignment này được mình làm tại trường. Các bạn có thể xem và tham khảo nhưng lư
Contents I Introduction II Strategic Planning Supply Chain Porter Forces PEST VRIN 10 BCG Matrix 10 SWOT 13 Conclusion 14 References 14 1 I Introduction Apple, one of the world's most valuable and valued companies is 800 billions dollar in 7/2017 They've been transforming our lives for nearly two decades with leading-edge products like the iPhone, iPad, iPod, Macbook, iMac, etc That is also why Apple can kill top names and rise to the top of the world and go away from other competitors Apple's vision is really ahead of time under Steve Jobs - CEOs and supposedly the myths of the tech world, we can only see Apple's vision of how the world is going through In the past they were brave to things that people never thought of and were not in favor of, but today's answers show the correctness that Apple has chosen Two decades ago, Apple's vision was how to change the way people use phones, tablets and PCs, how people listen to music After more than two decades, Apple has Too good and their mission accomplished However, the next 10 years are a different time, a world not as primitive as before but a much more intense competition, Apple has outlined a roadmap and they are doing it "Think Different" a popular campaign that Apple used and now it's eating into the company's DNA, as evidenced by the roadmap they outlined in the next 10 years, is different from their competitors in the market If giants such as Google, Facebook, Amazon, Microsoft chose AI (Artificial Intelligence) and VR (Virtual Reality) to make the world more interactive in the virtual world and the AI, Apple chose ML ( Machine Learning and AR (Augmented Reality) to make their devices smarter and people can interact with virtual objects in the real world That's two visions, two differences that Apple has chosen compared to the rest We will know the results after a decade when looking back 2 It is about Apple's vision, their mission now and in the future is still how to help people's lives easier They not only make good equipment, they are good systems and not only in technology, but also in health, education, health, etc Their mission is to optimize it and help People have a better life, easier work and more user orientation It's a big and heavy task but with a market leader, Apple can easily that The core values that make users choose Apple are their own Products that are always on the high-end market and are priced high, they care for their products in every detail, whether small or soft, from software to hardware It is the values they have built that make customers feel luxurious and show the class when using Apple products Apparently, but inside they did too well, both of which created a core value that users always think of when it comes to Apple is good and luxury That's why they attract billions of users and the level of customer loyalty to Apple is high 3 II Strategic Planning In this section, I will present five business theories: Supply Chain, Porter forces, PEST, VRIN and BCG Matrix to help us better understand the inside and outside of a company so that we can have one Take a look at the company overview, formulate the right decision in each case of the company In summary, these models can be easily understood and applied to any company so that they can clearly see what they are doing and have an entrepreneurial analysis Of course, all five of these theories I will apply to Apple to help us understand what Apple is doing and what to bear Supply Chain Supply Chain is a process that any company must apply, it is the process from input to final output, more specifically, a process sequence from the use of materials until Complete the product and reach the customer, including customer support during use The supply chain consists of five main stages as listed in the diagram above: Supplier - Manufacturer Distributor - Retailer - Customer Depending on the company, field and case that the supply chain changes accordingly, not all companies use the entire Supply Chain model The goal of the Supply Chain is to clearly demonstrate each stage of a process that helps businesses clearly and efficiently manage their assignments The main goal is to bring the right products, the right quantity to the right customers at the right time and place in the best possible way, the customers here can be individual consumers or businesses Good management of the supply chain helps the company get the satisfaction of customers and partners very well, even if the management of the supply chain is good, the company can reduce production costs and increase product profits High, of course, does not affect product quality Apple is one of the world's best supply chain companies, according to my opinion Why I think so? Those who learn about Apple know that within five years Apple has been led by Tim Cook - a master of supply chain management, according to Business Insider It's true that within just over five years since taking over as CEO of Apple, Tim Cook turned Apple into the most profitable company in the technology industry, setting the company's price to 800 billion The dollar and its cash reserves amounted to 200 billions dollar That is the result of good supply chain management, which brings huge profits to the company but Apple products are not affected too much in terms of quality 4 About Apple Supply Chain, first on the Supplier, Apple has hundreds of partners supply components such as Samsung, LG, Qualcomm, Imagination Technology, These suppliers provide components on orders Apple's good management of this stall helps Apple get a very cheap price for their components, and Apple is also a very good company to put pressure on its suppliers they In the year 2017, Apple has sued Qualcomm to put pressure on them, order Samsung in large numbers and urgently to pressure Samsung to reduce or the latest is the announced termination of Imagination Technology after 10 years This year the company collapsed Next to the Manufacturer, Apple is very smart in this process, in order to reduce the cost of assembly workers and taxes, they move all manufacturing and assembly processes to low-wage countries like China and Vietnam Major companies such as Foxconn are under tremendous time pressure from Apple, which also cuts Apple prices and forces many more workers to complete the number of Apple products About the Distributor, Apple has been on the top of the world so it's easy to manipulate 3rd party distributors, which are usually distributed through US carriers and 3rd party distributors Co-ordinate products mainly at Apple Store - Apple retail chain and third-party retailers of countries around the world In the end, it is Customer, Apple's product support and warranty, including those from Apple who not However, only Apple retailers are guaranteed and supported One change and Apple's dedicated support has made hundreds of millions of customers around the world loyal to them We can see how well Apple manages its supply chain, good supply chain management takes the company to new heights and competes favorably with all competitors 5 Porter Forces Porter Forces was announced in 1979 by Michael Porter, one of the world's leading strategic planners, who created the Five Competitive Factors model aimed at understanding the factors that create Profits in business He said that any business must be affected by five factors This model is still considered to be effective in understanding the origins of profitable elements Furthermore, the model also helps businesses identify competitive strategies to maintain and increase profitability in the business -Direct competition This factor is about companies competing in the same field High competition will push these companies to the bottom In this factor, most companies will try to grab as many market shares as possible and the products not differ much because they often learn from each other -Indirect competition This element refers to companies that are not directly competing but can interact with one or more factors Taking a move from one company to another also affects the company, even though the two are not directly competing with each other -Potential competition This element is about new companies entering a field and will be a potential danger to companies in that field However, in the present moment, this factor does not really affect big companies due to customer loyalty to big brands, high conversion costs, etc On the other hand, Recognizing the high dangers of new companies entering their field, large companies are likely to acquire these potential risks -Power supplier This factor is about the ability of suppliers to pressure If the impact of the supplier is strong enough, it can cause a company's revenue and profit to be negatively impacted The occurrence of this situation when the supplier is unique or has special materials, no alternative suppliers and products are being selected by many customers 6 -Power of customer This factor is about the ability to create customer pressure Of course, when the pressure is big enough, the revenue and profit of a company are negatively affected The occurrence of this case is due to the small or unique number of customers that purchase large quantities, or convert the replacement company easily and inexpensively Apple vs Google vs Microsoft – Source: Internet Let's try to apply Porter Forces to Apple to see Apple is affected by factors that affect revenue and profit -Direct competition First of all, Apple's direct competitors are not only in the technology sector but also in other areas like Google with Android, Microsoft with Windows, Samsung with the Galaxy Series, and Spotify They are overwhelmed by these competing companies, though their main market share is that the iPhone only fluctuates at 12% of the market share, but their profits account for more than 90% of the industry A terrible figure and shows Apple is overwhelmed the rest Their direct competitors may affect sales but profit is reversed The competition and gaining a lot of favor from the customer loyalty, however, to get this Apple has managed its supply chain too well -Indirect competition The indirect competition of Apple is not much when they are driving the direction of the whole technology The indirect competition that affects Apple is not much, and if so, even the smallest they resolved thoroughly As an example, around 2012, Apple bought all of its direct and indirect carrier shipments to ship iPhones and materials, which made those companies inexperienced And must use other means of transportation more expensive If Apple did not so, they could be affected by the company's timing of product fulfillment This is one of the first effective steps by Tim Cook as he begins to rise to Apple's CEO position 7 -Potential competition In 2017, Apple has bought more than 10 small companies and start-ups to supplement the company's strength and otherwise to eliminate the potential dangers and risks of taking advantage of the company competitor The potential risks almost not threaten a giants like Apple when their money is too much and dealing with these companies too easily -Power supplier Sometimes this factor is less likely to happen in the negative direction of Apple, but vice versa Apple will pressure suppliers For example, Imagination Technology goes bankrupt when it depends on Apple too much or Samsung, LG is also under pressure from Apple orders Apple's business rule is, "Never put eggs in a basket," which makes the company less likely to be under pressure from a supplier, which could cause the company to go bankrupt -Power of customer From a customer perspective, Apple is always addressing customers' pressure They build an ecosystem that binds the user and can not escape Users can not get rid of Apple's ecosystems, which leaves Apple unaware that users will abandon their use of the product In general, the direct and indirect impact on Apple's Porter Forces theory is resolved by Apple This will help them get huge revenue and profits but still grow sustainably PEST PEST is a model used to research the industry in which the company is operating PEST consists of four elements: Political, Economic, Sociocultural and Technological These factors are mostly external effects on the field of a company These factors also have a positive and negative impact on a company so PEST was born to help companies have a more general view of what is happening outside -Political This is a factor that affects all businesses in a given territory, institutional and legal factors that may affect the viability and development of any industry When doing business on an 8 administrative unit, businesses will be required to comply with the regulatory elements in that area This factor is usually the policies, laws of the government, tax policies, the stability that a government of a country affects the field of that company -Economic Businesses need to pay attention to economic factors both in the short run and the long run, and the government's intervention in the economy In this section, businesses will often be interested in the effects of the economy, status, and policies that the government applies to that economy Besides, there are also future prospects of an economy - Sociocultural Every country and region has its own unique cultural and social values, and these are the characteristics of consumers in those areas In addition to culture, social characteristics also attract businesses when it comes to market research, social factors that divide the community into customer groups, each with their own characteristics, From there, businesses will have the right strategy to fully exploit the market they want to business -Technology The whole world is still in the revolution of technology, a series of new technologies are born and integrated into products and services Technology changes day by day, so the technological elements that affect a certain field are unavoidable This factor can be analyzed on the basis of government investments and updates, the pace of technological development, and the accessibility of that market We also try to apply this model on Apple to analyze the impact from the outside to the technology market in general and Apple in particular -Political Apple is now officially present in many countries around the world, so the impact of the government is different However, generally Apple is more concerned about the tax policy of the countries that Apple wants to come Tim Cook did not want to hurt Apple's profits, even if it was a tax bill There are a number of measures that Apple CEOs have used for tax breaks in many countries, including the United States Although government policies are tightening and making it difficult not only for Apple but for many other technology companies, they still have a way of dealing with and reducing the impact of taxation -Economic Apple is often concerned with less volatile and growth-enhancing economies Apple often borrows funds in these markets to address US financial issues and R&D, and borrowing in 9 countries with less volatile economies reduces risk and reduces borrowing costs Not only Apple, but many other companies are adopting this nowadays -Sociocultural A growing society with a great deal of interest in education and healthcare, health care is an advantage for Apple as its products are increasingly focused on such areas Apple Watch, CareKit, Apple Education, gradually developed and Apple created to deeply impact on the society of a country Apple products designed for all ages, genders and even those who are not physically fit can still be used Education and health care are factors that help Apple's products succeed in many countries -Technology Technology development, increased access to technology is a big advantage for Apple They are leading the technology so bringing products to where technology is and will grow will be a big and potential profit VRIN VRIN is the abbreviation of Valuable, Rare, Inimitable and Non-substitutable Applying Barney's (1991) VRIN framework can determine if a resource is a source of sustainable competitive advantage in order to serve as a basis for sustainable competitive advantage -Valuable: meaning that they must be a source of greater value, in terms of relative costs and benefits, than similar resources in competing firms -Rare: rareness implies that the resource must be rare in the sense that it is scarce relative to demand for its use or what it produces -Inimitable: it is difficult to imitate -Non-substitutable: other types of resources can not be functional substitutes 10 10 Similar to the above, we try to apply this theory to Apple to see what resources Apple has to to compete with competitors For some companies, they can one of four things well, but if you not the best you can all four things in the medium -Valuable Apple is one of the most valuable companies in the world (2017) and has the second most valuable brand in the world Apple-branded products always have an invisible value to the user that almost no product on the market has -Rare This factor Apple is not clear since its products are incorporated from popular materials, not as rare as Vertu In this factor, Apple's Macbook design may be considered rarer, as it was just five years after its launch that it was brand new and catchy -Inimitable IOS and MacOS are two things Apple can not imitate These are two factors that help Apple tie users into their ecosystem and attract a lot of customers to switch to Apple products -Non-substitutable Similarly, iOS and MacOS are two things that can not be replaced if users are already using Apple products They can find a replacement similar to Windows or Linux but iOS and MacOS have special things that users can not find on Windows or Linux, especially in the workplace BCG Martrix The BCG (Boston Consulting Group) is the name of a strategic American consulting firm, founded in 1963 by Bruce Henderson It is one of the top three strategic consulting firms in the world The problem that BCG is offering is the ability to make a profit through analyzing a company's Strategic Business Unit (SBU) portfolio and thus allowing it to assess the overall competitive position of a business group Joint -SBU- Star Market share is relatively high and in high growth sectors There are competitive advantages and opportunities for growth that encompass enormous potential for profitability and long11 11 term growth In general, the SBU-star is highly valued for profitability, can meet the needs of capital investment itself -SBU- Question mark These are the SBUs in a relatively weak competitive position with relatively low market share Still, they are in high growth industries, with good prospects for profitability and longterm growth SBU- question mark can become SBU - star, if well invested - they need a huge amount of capital investment It is important to evaluate the potential, in order to have a proper investment plan -SBU- The cow These are the SBUs in the low growth sectors in the mature stage but have high market share and strong competitive position However, they are unlikely to have growth opportunities and low growth rates -SBU - The dog These are the SBUs in a weak competitive position, low market share, in slow growth sectors The prospects for these SBUs are very poor, and they may require a huge amount of capital but only to maintain a low market share with little growth potential In this theory, I will apply Apple and other companies in the same technology field on the BCG Matrix chart to see clearly the profitability of these companies -SBU- Star Apple, Google, Facebook, belong to this group because they are holding a high market share in the technology market along with their rapid growth This is considered a star group in the BCG Matrix -SBU- Question mark Airbnb, Snapchat, Uber, belong to this group because they are start-ups with very fast growth but low market share Investors are still investing in these companies to scramble for market share In general, companies in this group are usually start-ups -SBU- The cow 12 12 Microsoft, Samsung, are in this group because they have a high share, but for many years the speed of development is not really impressive Microsoft's situation has changed because they have new CEO Satya Nadella -SBU- The dog BlackBerry and Sony are in this category because their growth rate is low and market share is gradually lost to other brands They are intent on leaving the main business segment being pursued by prolonged losses SWOT SWOT is presented as a matrix consisting of rows of columns and divided into parts Each part corresponds to Strengths, Weaknesses, Opportunities, Threats From the model we have: -Strength is a positive or beneficial internal agent that helps you achieve your goals -Weak points are internal agents that are negative or that make it difficult to reach your goals -Opportunities are those outside the business (business, social, government, etc.) that are positive or beneficial to achieve the goal -Threats are agents outside the business (business, social, government, etc.) that are negative or difficult to achieve your goals We will apply SWOT to Apple at present to some extent understand the advantages and disadvantages that they are facing as a leading company - Strengths: A company that is leading the technology market with products that are used, trusted and loyal by billions of customers around the world Ownership of both the hardware and the software of the product It has more than $ 200 billion in cash and a team of the best people There are technologies that allow for long-term development in the future, attracting many developers - Weaknesses: Too much focus on the iPhone is probably the only weakness at the moment Sales of iPhone accounted for more than 50% of total revenue is a huge weakness that Apple needs to be engraved The move to expand the product has shown that Apple is concerned about this issue - Opportunities: The most powerful development of the technological world is in their hands, the large amount of cash is an opportunity for them to buy many new start-ups More and more people are loyal and using Apple products - Threats: Slipping behind as Google, Facebook, Samsung, etc are growing fast and closing the gap with Apple 13 13 Conclusion Knowing these theories will help us to form a good mindset that recognizes the situation of a business from inside and outside This helps us to improve our analytical capabilities and make decisions when encountering such a situation The Apple example I presented above is hoping we understand some of these theories References • • • • • 14 AFA (2015) Model Competitive Factor by Michael Porter, available at: http://www.afa.edu.vn/news/mo-hinh-5-nhan-to-canh-tranh-cua-michael-porter/ (Accessed: 27 July 2017) Duy Luan (2016) What is VR and AR?, available at: https://tinhte.vn/threads/vr-va-arla-gi-chung-khac-nhau-ra-sao-va-nguoi-ta-dang-ung-dung-vao-cuoc-song-nhu-thenao.2627420/ (Accessed: 27 July 2017) Phan Chuong (2013) The BCG matrix theory, available at: http://clbinternet.info/lythuyet-ve-ma-tran-bcg/ (Accessed: 27 July 2017) Saga (2015) PEST Analysis - A panoramic picture of the business environment, available at: http://www.saga.vn/phan-tich-pest-buc-tranh-toan-canh-ve-moi-truongkinh-doanh~34462 (Accessed: 27 July 2017) Vietabroader (2015) Supply chain management, available at: http://insider.vietabroader.org/supply-chain/ (Accessed: 27 July 2017) 14