CASE STUDY: APPLE’S PROFITABLE BUT RISKY STRATEGY
2.1 Critically analyse with predictions on the problems with predicting how the market and the competition will change over the next few years and analyse the implications of these for strategy development? (20)
Predicting how the market and competition will evolve over the next few years is a complex and challenging task. There are several factors that make it difficult to accurately predict future market dynamics and competitive landscapes. These factors include:
1. Technological advancements: The pace of technological advancements is rapidly accelerating, making it difficult to anticipate how new technologies will disrupt markets and create new competition. For example, the rise of smartphones and mobile applications completely transformed the market and brought new competitors like Samsung into the spotlight.
2. Changing consumer preferences: Consumer preferences evolve over time, and it is challenging to predict how they will change in the future. For instance, the demand for personal computers declined significantly with the emergence of tablets and smartphones. Similarly, consumer preferences for certain features or product designs may change due to evolving trends, making it challenging to predict and respond to these changes accurately.
3. Global economic conditions: Economic conditions play a vital role in shaping market dynamics and competition. Predicting economic downturns, recessions, or geopolitical events can be challenging, and these factors often impact consumer purchasing power, demand, and competitive behavior. For example, the 2008 global financial crisis had a significant impact on consumer spending patterns and competition in various industries.
4. Regulatory changes: Government regulations and policies can have a profound impact on market dynamics and competition. Changes in regulations can create new opportunities or barriers for companies, making it difficult to predict the future competitive landscape. For example, regulations on data privacy and antitrust laws can significantly impact the strategies and operations of companies like Apple.
The implications of these challenges for strategy development are significant. Companies need to adopt a more flexible and adaptable approach to strategy to respond effectively to market changes and evolving competition. This requires companies to constantly monitor market trends, customer preferences, technological advancements, and regulatory changes and make necessary adjustments to their strategies.
Companies must also develop contingency plans and scenario analyses to anticipate various potential market and competitive scenarios. By considering multiple possible futures, companies can be better prepared for unexpected changes and develop strategies that can be easily adapted to different scenarios.
Overall, the key is to build agility and resilience into strategy development processes, so that strategies can be adjusted and refined based on emerging market dynamics and competitive landscapes. Companies that successfully navigate these challenges are more likely to maintain a competitive edge in the dynamic and uncertain business environment.