Fortune Magazine prepares annual reports publishing the rankings of the world’s most admired companies. The approach to determining a company’s position in the list centers on nine factors referred to as key attributes to reputation, including “innovation, people management, use of corporate assets, social responsibility, quality of management, financial soundness, long-term investment value, quality of products/services, global competitiveness” (Apple, 2016, para. 3). They all are used to assess the level of corporate reputation, which, in fact, is the foundation for developing this rating.
The leaders of the latest list are three young tech giants – Apple, Alphabet, and Amazon. Among other most admired companies there are Berkshire Hathaway, Walt Disney, Starbucks, Southwest Airlines, FedEx, Nike, and General Electric. As of the worst ones in the list of the 50 Most Admired Companies, they are Charles Schwab, Publix Super Market, AT&T, and Visa (World’s Most Admired Companies, 2016). It should be noted once more the single criterion for putting a company on this list is corporate culture, and it ignores economic performance. This paper will focus on analyzing Apple, which is the number one in the Fortune’s Most Admired Companies Rating, and strategic and organizational factors that led to its success.
Apple is the first in the Fortune’s Most Admired Companies rating, the fifth in the Fortune 500 Rank, and the fifteenth in the Global 500 Rank (Apple, 2016). These ratings prove that the company is indeed successful, but what is at the stake of this paper is defining what helped Apple operating for less than forty years achieve such spectacular levels of performance. The company’s rate in all key attributes to reputation is 1, which is the highest level.
There are several factors contributing to the company’s success. First of all, recollect the nature of Apple. It is the company that sells premium goods at premium prices. Nevertheless, people all over the world desire to own one of its products. To unravel the mystery of Apple’s popularity, it is vital to keep in mind its strategy. Developed by its founder, Steve Jobs, Apple’s strategic objectives remained unchanged throughout the history of the company’s development.
The primary focus was always made on being a leader in the industry and prioritizing profits instead of market shares. Moreover, the specificity of Apple’s strategy is to offer a relatively small amount of products highlighting that they are special. This step is necessary to reach the last strategic objective – make a product desirable and promote it, so that people always long for having one of them, especially the newest one (Nielson, 2014).
Together with that, Apple always paid attention to innovation and the perfect quality of its goods. Its primary interest is to dictate the pace of the further development of technologies accomplishing little breakthroughs with every new product. It is enough to recollect the invention of the iPhone, the first touch screen smartphone ever, or any of Apple’s projects to believe that the company does establish the rules for other companies involved in the electronics industry (Johnson, Li, Phan, Singer & Trinh, 2012). Even though there are many substitutes to Apple’s goods, not any is as much desired.
There is also a group of organizational factors contributing to Apple’s success. First of all, it is the company’s organizational agility, i.e., the capacity to detect the opportunities and take full advantage of them quicker than competitors (Sadeghi, 2012). In the case of Apple, it means that it managed to minimize the production costs benefiting from economies of scale and outsourcing of production without deteriorating the quality of its products, refreshing and extending the product line on a timely basis, and focusing on large-scale propaganda in mass media and explosive shows during the presentations of new goods.
Furthermore, Apple has a unique corporate culture. The focus is made on consumers instead of computers, even though the quality is still perfect. In fact, the company invests much money and effort in finding ways to attract consumers to its products together with making them lovable and easy to use, thought out to the tiniest detail. Apple’s goods are technologically intricate and luxurious, making them attractive to those interested in entertainment, developing professional skills, and simply having good looks (Laugesen & Yuan, 2010).
However, the company puts even more effort in secrecy, trying to keep the details about the newest product unknown up to the presentation. Moreover, those employed in Apple are always concentrated on creativity, dynamism, and excellence, believing that they are the keys to innovation and preserving leading positions in the industry (Backer, 2013; Meyer, 2015).
That said, Apple owes its success to numerous factors. However, the most significant thing about the company is that it keeps the strategic objectives formulated almost forty years ago, even though sometimes they are the source of weaknesses and drawbacks. Its perseverance and confidence are the reason why Apple is the first in the World’s Most Admired Companies list.
References
Apple. (2016). Web.
Backer, L. C. (2013). Transnational corporations’ outward expression of inward self-constitution: The enforcement of human rights by Apple, Inc. Indiana Journal of Global Legal Studies, 20(2), 805-879.
Johnson, K., Li, L., Phan, H., Singer, J. & Trinh, H. (2012). The innovative success that is Apple, Inc. Web.
Laugesen, J., & Yuan, Y. (2010). What factors contributed to the success of Apple’s iPhone? Proceedings from 2010 Ninth International Conference on Mobile Business. Athens, Greece: IJEC.
Meyer, P. (2015). Apple Inc. organizational culture: Features & implications.
Nielson, S. (2014). Apple’s premium pricing strategy and product differentiation.
Sadeghi, S. (2012). Defensive strategy – Apple’s overlooked key to success. Berlin< Germany: Epubli.
World’s Most Admired Companies. (2016).