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Does a bruised Apple need to change direction?

 

The end of April brought with it some predictably hyperbolic reaction to the news that Apple – that Apple – had suffered its first fall in revenue in over a decade.

 

Business commentators and journalists fell over themselves to investigate what it could mean: have people fallen out of love with the iconic iPhone? Has customer service slipped as the company surged ahead? Are competitors just improving and closing the gap?

 

Apple’s latest results showed a significant fall in quarterly sales – from US $58 billion last year to US $50.56 billion in the second quarter of 2016. Quarterly profit fell from US $13.5 billion to US $10.5 billion, while sales of the firm’s flagship iPhone stuttered for the first time in the product’s history, selling 10 million fewer units than in the same quarter of 2015.

 

The other big news was that sales in China, a formerly reliable buffer against weaker performance elsewhere, were down 26 per cent.

 

In itself, much of what was contained in the results wasn’t totally unexpected – Apple warned earlier in the year that sales of iPhones were slowing down, while there have numerous suggestions that products such as the iWatch and iPad weren’t as popular as the company would hope. Still, the fall in sales appears to have concerned investors, as well as shaken the faith of many consumer fans.

 

Strategy change?

 

Obviously all companies - no matter their scale – must continually look at whether their current strategy and business proposition is still serving them as well as it might. For leaders, this means taking a reasoned and measured approach, rather than sudden drastic corrective action or changes.

 

Businesses should be carefully collecting and analysing data on their performance – from customers, from their employees, from the wider market, for example.

 

They then need to look honestly and objectively at whether they believe their findings show that the current strategy remains the most effective course of action towards their overall vision for the company. If not, they might need to start looking at making changes.

 

This, naturally, is no small or easy task. Even a comparatively small firm will have a sizeable task at hand in changing a long-established strategic direction. For a company of the scale of Apple, for example, it could be monstrously, enormously complicated. Nobody, of course, is suggesting that Apple needs a radical overhaul quite yet, but you can be sure that its current strategy will be a key talking point for many in Cupertino.
 
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