MEM603 Engineering Strategy Report Sample

MEM603 Engineering Strategy

Task Summary

Critically review in 2,000 words (+/-10%) the engineering strategy (in relation to research and development (R&D), technology, innovation and intellectual property (IP) management) of an organisation known to you. Describe and critically assess how the company has integrated this strategy internally with other parts of the organisation and externally with its partners and alliances.

Context

This assessment will provide you with an opportunity to research, review and assess the engineering strategy of an organisation and explain how it integrates with other parts of the company (e.g., at the end of marketing and production) and external partners (e.g., allies, using strategic tools, methodologies and processes). An engineering strategy is important to engineering and technical organisations because it provides management with a set of decisions about current and future actions that need to be implemented to ensure that the organisation meets its targets and objectives in areas such as R&D, technology, innovation and IP management. For an engineering strategy to be effective in an organisation, it needs to align with and support the overall company strategy, integrate with other parts of the organisation (e.g., marketing and operations) and link with external stakeholders (e.g., joint venture partners and licensing partnerships) and strategic research alliances with universities and public research organisations.

Task Instructions

For this assessment, you will use a strategy process, methodology and tools to critically review the engineering strategy of an organisation and then critically assess how the engineering strategy has been integrated with internal and external stakeholders.

You need to prepare for and approach this task by completing 

‘Module 2: Innovation strategy and management’, 
‘Module 3: Technology and R&D Strategy and Management’ and 
‘Module 4: IP (Intellectual Property) Protection in an Engineering Context’.

To complete this assessment, you need to research and examine the following issues in relation to the engineering strategy of an engineering or technical organisation of your choice:

1. Describe the current engineering strategy of the organisation.

- A strategy consists of an understanding of the current situation, the desired future situation and the actions that need to be undertaken to move to the desired future and achieve the vision and objectives.

- An engineering strategy generally covers a number of areas, such as R&D, technology, innovation and IP management. These areas may be addressed by one or separate strategies.

2. Critically review the existing engineering strategy.

Ideally, an engineering strategy should meet a number of criteria. Specifically, an engineering strategy should:

- Provide direction, aims and objectives and decisions about future actions in technology, innovation, R&D and IP management;
- Prescribe consistent strategic choices dealing with the deployment of resources to achieve the objectives; and
- Answer the following questions: What is to be accomplished? Why do we want to do it? How are we going to do it? What resource commitments are necessary?

3. Critically assess how the engineering strategy integrates internally and externally to the organisation. Specifically, consider:

- The overall corporate strategy. The engineering strategy needs to align with and support the overall organisational strategy;

- Other parts of the organisation, such as those responsible for operations, marketing, finance and human resources. The engineering strategy needs to identify linkages and indicate how these and others will be strengthened; and 

- External stakeholders (e.g., strategic alliances with universities and research organisations) and partnerships (e.g., joint ventures or licensing agreement). The engineering strategy needs to identify partners and alliances that will help the organisation to achieve its objectives You may wish to use the following as a guide for structuring your assessment:

1. Introduction

2. Background

- Summarise the background information provided on the importance of an effective engineering strategy that also links with internal and external partners and stakeholders.

- Describe your chosen organisation.

- Describe the objective of the assessment.

3. Research description of the engineering strategy

4. Review (pros and cons) of the engineering strategy

5. Research description of how the engineering strategy integrates with other parts of the organisation and external partners and strategic alliances

6. Assess (pros and cons) of how the engineering strategy has been integrated internally and externally within the organisation

7. Conclusions

8. References

9. Appendices

Solution

1. Introduction

Apple Inc. is one of the largest corporate organisations and innovators in the whole world. The main reason of success of this company is its innovative products that are far ahead of any competitors in the modern era (Pooja, 2020). With time, Apple has been able to develop one of the strongest brand values globally and has been able to reign in the market despite the presence of a large of number of competitors around the world. MBA Assignment Expert However, the success of Apple cannot be judged based on its marketing or revenue success only. The company has been able to utilise engineering strategies to innovate, grow and set benchmarks in the industry that are almost impossible to achieve. 

The purpose of this report is to discuss importance of effective engineering strategies and analyse how Apple has been able to stand out in the market full of competition and rivalry using effective engineering strategies.

2. Background

2.1 Importance of Effective Engineering Strategy

Engineering is an essential part of a business organisation that deals with technical products / services like electronic goods, heavy equipments, transport vehicles and many others. In addition to performing marketing and business ventures, the companies also need to have suitable engineering strategies in order to innovate and develop products that are upgraded over the currently available ones and have the potential to attract more customers and fulfill market demands (Aljafari, 2016). Without engineering innovation and development, it is almost impossible for the organisations to keep up with the rapidly evolving market where a large number of competitors are upgrading themselves with their own engineering strategies. Hence, in order to thrive, the organisation must have effective engineering strategies in place and should not fear making investments in engineering and innovation. It is true that engineering and innovation requires significant amount of continuous investment to fund the research and development and engineering teams to innovate and develop new products (Olson, 2018). Moreover, the engineering strategies must also be aligned with the organisation’s policies and vision. There are many small or medium organisations who are unable to invest that much for engineering and are only able to outsource the engineering section to other organisations (or simply purchase engineered products from other companies). These organisations can still survive in the market but they not have any similar brand value or dominance in the market and also will always have to depend on external supplies rather than development by themselves.

2.2 Description of the Organisation

The organisation chosen in this study is Apple Inc. which is one of the largest corporate giants in the world. Apple deals with various electronic products like smartphones, laptops, desk tops, smart devices, iOS operating system and various other online services. Since the products and services of the company are predominantly technical and electronic based, almost the entirety of the company is built on engineering of the products (Scassillo, 2016). Unlike most other electronic goods companies, Apple does not rely on suppliers or other engineering companies for developing their products. Instead, every component is engineered and manufactured by Apple for its own devices. Hence, Apple builds every electronic device from scratch, from a tiny microprocessor to the entire device build.

The business of Apple is completely centred on its brand value – the company has been able to develop a very strong global brand value, which is now driving and boosting the sales of its products. However, due to in-house engineering and development of ultramodern products that set benchmarks in the market, the products of Apple have significantly high market prices compared to its competitors and hence, the focus of the company on the high end market segment mostly. 

2.3 Objective of the Assessment

The primary objective of this assessment is to analyse engineering strategies of Apple and how it gains strong market presence through its engineering strategies. Moreover, this assessment also focuses on the critical review of the engineering strategy of the company that focuses on both pros and cons. Other than that, the report will also explore how the engineering strategy is being integrated internally and externally within the organisation.

3. Description of The Engineering Strategy

Apple’s central engineering strategy is to continuously innovate and upgrade products that will enrich people’s daily lives and functions with the integration of smart technology with basic electronic devices. Apple also relies on in-house engineering of smaller components of a device and develops its own components like chipsets, camera, device body and others. Apple operates in a highly competitive market segment where almost all of its competitors are in the process of continuous development and innovation (Yie, Zhi & Ping, 2021). As a result, the company also needs to avoid stagnation and keep developing better and better devices with lot of upgrades over the previous versions. Even though a significant amount of business of company thrives on its brand value, Apple will not survive for long by solely depending on the brand value – continuous innovation and market benchmark products are the keys to successful and sustainable presence of the company in the market.

One of the important aspects of Apple company is that it mainly operates in high end market segment only and hence, the company’s engineering strategy does not bother about cost cutting and reducing product prices by developing low or medium end devices. The company keeps investing in the high end product development and innovation and hence, the costs of the products are significantly higher that similar products from other companies (Tian, Wang & Wang, 2022). Despite this comparatively higher pricing of the products, they seem to be very successful in the market anyway because of the popularity and luxury value in the high end market.

Despite these, the company did adopt some cost cutting strategies to reduce the prices but keeping the quality of product and engineering intact. For this purpose, Apple has outsourced the engineering division to China and a few other countries where labour is cheap and abundant. Using this strategy, the quality of the products is kept intact but manufacturing costs are reduced significantly due to the availability of very cheap labour. Due to this cost cutting, the products are now sometimes within affordable range of the mid end segment of the market.

4. Review of the Engineering Strategy

The engineering strategy and approach of Apple has both pros and cons. While considering the company’s viewpoint, the engineering strategy is very much effective and aligned with the mission and vision of the company whereas on the other hand, from the market perspective, the engineering strategy is flawed and the company is missing out on a large section of the market. The main pros and cons of the strategy are discussed as follows.

Pros

- The current engineering strategy of the company allows it to utilise original innovations that are intellectual properties of the company. Moreover, the company does not share its IPs with other companies and hence, others have to try replicating the technology rather than using the same (Valenzuela & Böhm, 2017). As a result, Apple gets a strong head start in the market in terms of engineering and innovation.

- In-house engineering and development of device components allow the company to develop the products in its own pace and according to requirements. This also ensures the company does not need to rely on external suppliers or engineers and is self-sustaining in nature. 

- Another important aspect of the company’s engineering strategy is that it is able to maintain and grow its brand value through ultramodern innovations and engineering. For example, every year when the latest of version of the company’s flagship smartphone device, the iPhone, is being released, the regular and target customers are always excited about what new features are now being implemented in the coming version. This early interest and the release of benchmark quality features and services help the company to boost the sales easily.

Cons

- Due to high pricing of the products and only focus on high end engineering, the company is only able to operate in the high end market segment only whereas its competitors are easily able to operate in mid and low range end markets by replicating the Apple technologies (albeit cheaper versions with less quality but almost similar features). If Apple decided to enter mid and low end market segments, it could easily do so due to the strong brand value and recognition around the world (Lockamy III, 2017). However, the company chooses to ignore this opportunity and keeps driving the engineering department for developing products that would be suitable for high end and luxury market segments only.

- Incompatibility is another major con of Apple’s engineering. The software programs and operating systems developed by Apple are not compatible with any devices other than Apple products. This is a significant engineering strategy limitation of the company that fends off buyers from a potential purchase. For instance, in order to use the iOS operating system, the customer is forced to buy an Apple device and thus the cost of purchase goes up significantly, which may not a very favourable experience for the customer. 

5. Integration of Engineering Strategy with Other Parts of The Organisation

Since Apple focuses on in-house engineering and development of its own products from scratch, it is very important for the company to integrate engineering strategy with other parts of the organisation as well as external partners and strategic alliances. From 1998 till date, Apple has a centralized organisational structure that avoids separate managers for each department and includes on one manager (CEO) who is in control of all other departments (Holtzblatt, Geekie & Tschakert, 2016). The engineering department is also similar spearhead by the CEO who sets up the plans and reviews any designs created by the engineering team. However, there are some departmental leaders who are assigned to oversee the departments. These leaders are required to be technically proficient and having clear idea of the company’s engineering strategies, mission and vision. 

The company does not much utilise external partners except partnerships with mobile network service providers and similar such entities that are not mostly related to engineering. Apple keeps the engineering component in-house and does not rely on external suppliers except providing the raw materials like metals, silicones and others. The engineering department’s cost cutting measures are also based on forging strategic alliance with countries like China, where labour is cheap and widely available.

6. Pros and Cons of Internal and External Integration of the Engineering Strategy

The pros and cons of how the engineering strategy has been integrated internally and externally within the organisation are discussed as follows.

Pros

- Use of intellectual property in the engineering department allows to maintain originality and helps the company to be less reliant on suppliers and vendors.

- Centralized control benefits the integration of engineering with other departments as they are synced together towards the same market objective (Wester, 2018).

- Strategic alliances with external entities help the company to cut manufacturing costs.

Cons

- The company’s engineering department will suffer if a new CEO lacks the vision or technical expertise to generate ideas for engineering and innovation
- Lack of external partners can significantly limit the organisation’s capabilities in terms of engineering and innovations as well as marketing.

7. Conclusion

Overall, it can be concluded that Apple’s engineering strategies are quite unique compared to its competitors in the market. Apple operates in the smart electronic devices market and deals with various electronic products like smartphones, laptops, desk tops, smart devices, iOS operating system and various other online services. The company utilises engineering strategies to innovate and develop flagship benchmark products that are hard to replicate. Unlike most other electronic goods companies, Apple does not rely on suppliers or other engineering companies for developing their products. Instead, every component is engineered and manufactured by Apple for its own devices. As a result, the company has full control over what is being innovated, developed and released for commercial sales. The engineering strategies are thus completely aligned with the mission and vision of the company.

References

Aljafari, A. (2016). Apple Inc. industry analysis business policy and strategy. International Journal of Scientific & Engineering Research, 7(3), 406-441.

Holtzblatt, M. A., Geekie, J., & Tschakert, N. (2016). Should US and global regulators take a bigger tax bite out of technology companies? A case on Apple's international tax minimization and reporting strategies. Issues in Accounting Education, 31(1), 133-148.

Lockamy III, A. (2017, July). An examination of external risk factors in Apple Inc.’s supply chain. In Supply Chain Forum: An International Journal (Vol. 18, No. 3, pp. 177-188). Taylor & Francis.

Olson, E. W. (2018). TOTAL QUALITY MANAGEMENT & APPLE SUCCESS. In Proceedings of the International Annual Conference of the American Society for Engineering Management. (pp. 1-7). American Society for Engineering Management (ASEM).

Pooja, B. C. (2020). An Organization Study Report Of Apple Inc (Doctoral dissertation, CMR Institute of Technology. Bangalore).
Scassillo, G. (2016). Analysis of product strategies across evolution of competences. an empirical case study of Apple Inc.

Tian, W., Wang, M., & Wang, Q. (2022, March). The Core Competentness of Apple Inc. In 2022 7th International Conference on Financial Innovation and Economic Development (ICFIED 2022) (pp. 718-725). Atlantis Press.

Valenzuela, F., & Böhm, S. (2017). Against wasted politics: A critique of the circular economy. Ephemera: theory & politics in organization, 17(1), 23-60.
Wester, A. (2018). The Big Apple: The Narrative Potential of Utopianism in Apple Inc. Advertisements.

Yie, C. E., Zhi, C. E., & Ping, N. T. S. (2021). A Critical Analysis of Internal and External Environment: Case Study of Apple Inc. Journal of International Business and Management, 4(10), 01-14.