Thursday, April 25, 2013

Apple and ineffective operations strategies ?


Some of my marketing colleagues have been upbeat about the inevitability of the Marketing function in modern day businesses. They claim Management is all about Marketing and Innovation - as claimed by a management thinker .. I cannot but differ, from this thought.. I feel a lot more needs to be said and done before anyone could conclusively say or write something in that respect and I feel it is but the most insane thought one can have. Though I do not fully subscribe to the view that marketing is just an exercise in futility for the short term, I understand that it does connect the markets to the products or services developed and thus performs an important function after Operations.

The case of Apple is being introduced here. Even though it is too early to predict the collapse of Apple,  despite its well intentioned marketing strategies and brand image concepts, Apple is seeing a market freefall like never before. Its shares have plummeted from $706 to $ 406 in a year and its profits have declined by 18% last quarter despite slight increase in revenues.


It is interesting from the academic point of view at how marketing and brand image concepts at Apple have taken a beating. Despite having the best focussed brains in the world, it is a surprise that Apple has taken a severe drubbing  of its stocks. Now Apple will be out of successful marketing case studies of Business Schools and will be a disaster case study at how to avoid some of the blunders .. It is a clear case of how in spite of the best, professional marketing theories of great thinkers and practitioners in place, a company flounders !!

Despite its well thoughout strategies at giving the customer better products with advanced features at sky high prices, Apple may not be able to survive in the market where less costly, feature rich, technically superior items are available from the markets of India and China.. Apple now has to look around for more innovative strategies of offering 'great value' matching with its 'high pricing' strategy to the world. It may be difficult to take the customers for granted anymore ...

The freefall of Apple stock is phenomenal and no force on earth can stop it .. Even though $100 billion of its cash reserve of $150 billion will be pumped into the market by 2015 to give customers the needed confidence, the onslaught of Chinese and Indian products in the market will surely give it a run for its money. Is it that Apple's game plans are over ?? the rabbit is out of the hat ?

This does not in any way denounce the role of marketing in Business School curriculum .. In fact it just means that marketing may take a company to great heights, but cannot help it sustain that position unless it has strong fundamentals and a great work culture. Take for example Toyota Motor Company. It is a great product company of the world. It is known for its products, people and processes (Toyota Production System). A system founded on sound operations culture and value system which has stood the test of time for sixty years and is now among the most respected, adored, profitable and largest manufacturing concerns in the world.

Marketing strategies are all temporal, just a momentary phenomenon, not for the long run. If an organisation concentrates only on Marketing and ignores other areas, it really gives meaning and substance to the famous proverb which goes this way, 'Make hay while the sun shines ". The gains are short-lived !! The mild and weak-hearted will fall for it, not everyone.. 

So sad how the intelligent business community and academicians downplay the role of the correct operations strategies that decides whether a company survives inn the long run or not.

If Apple had concentrated on an operations strategy on giving better products at better prices with excellent functional and technical  features, it would have stayed a little longer in the market. People may ascribe it to the absence of Steve Jobs at the helm of affairs in Apple to give value to customers, but it is not so, it is just absence of that effective operations strategy, a strategy to take the competition headon and give value to the customer..

My next article will focus on what makes Walmart have the edge over TESCO, or Toyota over GM or Google over Yahoo ..

ge..

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