Apple Inc. General Business Environment
The success of trading activities in Apple Inc. is linked to how it addresses external business factors. The firm has strategic management that plays a vital role in exploiting opportunities and protecting the firm from threats in companies dealing with technology and electronics. PESTEL analysis is used in assessing segments that Apple Inc. ranks highest. Economic and technological factors are the main macro-environment segments that create opportunities for the firm ( Hitt et al., 1) . The economic environment is associated with the industry’s condition and market that influences the operations of Apple Inc. Notably, the economic stability experienced by growing countries offer opportunities for Apple Inc. products and services. For example, high economic growth rates in Asian countries create a market for Apple Inc. Such has led to an increase in revenue through foreign trade. Despite that, the firm needs effectiveness and speed in their expansion efforts in overseas markets due to rising cases of competition from companies like LG and Samsung. The technological aspect of Apple Inc.'s business environment provides opportunities for the firm. The growing demand for cloud computing has helped enhance its trading activities ( Shen et al., 5) . Apple's Inc. corporate structure has constantly supported the development and expansion of cloud infrastructure in its operations. Such has resulted in profit maximization. An increase in technological integration in the business also presents an opportunity to enhance the operations of Apple Inc. The growth in the mobile market also influences positively expansion of Apple Inc. by increasing its revenues through the App Store and other related digital content platforms.
Five Competitive forces model strengthening Apple Inc.
Michael Porter’s Five Forces provides a framework used by companies to evaluate forces affecting their operations regarding new entrants, customers, substitutes, competition, and suppliers. Five Force analysis of Apple Inc. sheds light on what it does to counter competition from companies like Amazon and Google that offer computer hardware and software products. Bargaining power of buyers and consumers and competitive rivalry are the main five forces that are significant for Apple Inc. ( Kabeyi, 2). On the competitive rivalry, Apple Inc. faces strong competition from other industries in the technology sector, such as LG and Samsung. In the industry, aggressiveness in advertisement, imitation, and rapid innovation from competitors imposes a strong force for Apple Inc. Apple Inc. has been able to address competition from its rivalries by paying the construction cost of companies that produce new components in technology in exchange for exclusive rights of their output. Bargaining power of consumers also affects Apple Inc., whereas buyers' strong power in the firm is based on the small size of individual buyers and low switching costs ( Kabeyi, 2) . Brand features compel customers' choices, and this has been the cause of switching to other companies. Similarly, the purchasing power of customers is small as compared to the total revenue of Apple Inc. However, Apple Inc. has been able to address these issues by availing detailed comparative data between the characteristics of its products and that of its competitors. The information has reduced customers switching to other brands.
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Two Forces Where the Organization Requires Improvement
The approach that Apple Inc. will use in the future to address issues related to competitive rivalry and bargaining power of consumers is essential in keeping the firm at the top of its rivals. In competitive rivalry, Apple Inc. needs to develop a product differentiation mechanism ( Lazareska & Jakimoski, 4) . Currently, its products and those of competitors are similar, and thus, utilizing differentiation methods will improve sales of its brands. The firm can modify its products in such a way that they have distinct features as compared to that of competitors. On the issues of customers' bargaining power, Apple Inc. should consider including its customers' purchasing power as a strategic variable in the business.
External Threats and Opportunities Affecting Apple Inc. Business
The main external threat that faces Apple Inc. is stiff competition and imitations from its rivalries. Apple Inc. competes with other developed firms such as Samsung, which also uses rapid innovation. Stiff competition is a limiting factor to Apple Inc. operations, whereas imitation of the firm products is also a threat ( Khan et al., 3) . A large number of multinational and local companies imitate Apple Inc.'s designs. The Company can address the threats by having strong fundamentals that can help maintain a competitive advantage, such as rapid innovation in product development. The framework can help reduce negative effects related to imitation and competition. Similarly, the corporation can establish partnerships with distributors throughout the world, a mechanism geared towards improving the overall market reach of Apple Inc. distribution network. Currently, Apple's distribution network is limited. Thus, the firm needs to change its distribution network since opportunities available are expanding its distribution networks and increasing sales due to rising demand ( Khan et al., 3) . Expansion in its distribution network will enable the firm to reach more customers globally by engaging in aggressive marketing, especially mobile products. The rising demand for mobile access should be considered in exploring new product lines.
Organizational Strengths and Weakness with Its Business Strategy
Strengths in business are aimed at overcoming weaknesses and maximizing on opportunities available. Apple Inc.'s strengths are related to its strong brand image and high-profit margin. Apple Inc. is a valuable and strongest brand globally, and thus, the firm can introduce new products that are profitable under the existing brand image. The business also has a high-profit margin due to its accumulation of wealth before the new organization entered the same industry ( Khan et al., 3) . Apple Inc. can maximize its high revenue by utilizing a marketing mix that uses a premium pricing strategy. The approach will facilitate an increase in the firm's profit margins. Weaknesses are obstacles that firm experiences in its growth Apple Inc.'s main weaknesses are high selling prices and relying on high-end market segments. High prices are a setback to Apple’s Inc. products because it leads to mainly selling company’s products to customers of high and middle income. Such prevents the firm from selling its products to clients with low-income margins. Apple Inc. can apply market targeting strategy by developing different products that can suit both low and high-income buyers. Such will result in the maximization of sales from different income segments.
Organizational Resources, Capabilities and Core Competencies
The key resources of Apple Inc. comprise competent personnel, a valuable brand, and tangible resources. Apple Inc. has many employees who remain the most valuable assets in the firm's operations. The firm has a top-range of staff in areas such as hardware design and software engineering. The firm also has a respected brand that has enabled it to sell its goods at higher prices than competitors. Apple Inc. also has physical resources such as 479 Apple stores in various parts of the world ( Shen et al., 5) . The main capabilities of Apple Inc. are brand equity and high-quality products. On brand equity, Apple Inc. is well-known for its strong customer-centricity in product development. The firm has strong customer connection and engagement, an essential factor contributing to the building of strong brand equity. Apple Inc. sells high-quality products. The company has invested heavily in technology, and the norm has resulted in a breakthrough in the generation of goods based on customers’ needs and prevalence. The core competencies are special capabilities and skills that offer a competitive advantage in the market of a firm’s product. Apple Inc. has superior innovation. The company is good at enhancing existing technology and improving its technical capabilities ( Lazareska & Jakimoski, 4) . Innovative skills have enabled Apple Inc. to deliver exciting and interesting goods and services to their consumers. The enterprise also has a closed proprietary system that prevents evasion of secret recipes and skills in the telecommunication industry.
Sources
Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2016). Strategic management: Concepts and cases: Competitiveness and globalization . https://books.google.co.ke/books?hl=en&lr=&id=gc84CgAAQBAJ&oi=fnd&pg=PP1&dq=1.%09Hitt,+M.+A.,+Ireland,+R.+D.,+%26+Hoskisson,+R.+E.+(2016).+Strategic+management:+Concepts+and+cases:+Competitiveness+and+globalization&ots=pK6o2c43j-&sig=Qr4XwXqceVPRgA9iUfelTjbzBeY&redir_esc=y#v=onepage&q=1.%09Hitt%2C%20M.%20A.%2C%20Ireland%2C%20R.%20D.%2C%20%26%20Hoskisson%2C%20R.%20E.%20(2016).%20Strategic%20management%3A%20Concepts%20and%20cases%3A%20Competitiveness%20and%20globalization&f=false
Kabeyi, M. J. B. (2018). Michael porter’s five competitive forces and generetic strategies, market segmentation strategy and case study of competition in global smartphone manufacturing industry, pp. 39-45. http://www.allresearchjournal.com/
Khan, U. A., Alam, M. N., & Alam, S. (2015). A critical analysis of internal and external environment of Apple Inc. International Journal of Economics, Commerce and Management , pp. 955-961. https://www.researchgate.net/profile/Md_Alam136/publication/282274921
Lazareska, L., & Jakimoski, K. (2017). Analysis of the Advantages and Disadvantages of Android and iOS Systems and Converting Applications from Android to iOS Platform and Vice Versa, pp. 116-120. https://doi.org/10.11648/j.ajsea.20170605.11
Shen, J., Sha, Z., & Wu, Y. J. (2020). Enterprise Adaptive Marketing Capabilities and Sustainable Innovation Performance: An Opportunity–Resource Integration Perspective, p. 469. https://doi.org/10.3390/su12020469
