Introduction-Apple Inc.
Apple Inc. is a multinational corporation that specializes in the designing and manufacturing of hardware and software products. The current hardware products that are manufactured by Apple include iPad, iPhone, iMac and iPod among many others. The current Apple designed, and manufactured software includes Mac OS X, iOS and watchOS. Apple has stunned the globe for its innovative products on the market. The company is also well known for their mission and vision to be a proven top competitor in the technology market. This paper will discuss the analysis of Apple Inc. on the number of factors that are responsible for the success that Apple has endured. Besides, it will discuss the threats that Apple might be facing and whether they can handle such stresses in the technological industry (Apple, 2018).
General Environmental Segments Affecting Apple Inc.
Apples company’s success is due to its ability to address the external factors in the remote or macro-environment. The ability of Apple Inc. to succeed is based on the various strategies that they create and efficiently exploit the opportunities that are presented to them. Therefore, protecting the enterprise from multiple environmental threats. Political and economic factors are among the ecological segments that have a high impact on Apple Inc. (Lombardo, 2017).
The external political factors in Apple’s environment most significantly present opportunities. These political factors include improving free trade policies as well as stable politics in the developed countries. Both offer Apple opportunities. The free trade policies help Apple corporation to increase chances to distribute more of its products to the countless number of the market around the globe especially with developing countries where more free trade policies are created over time.
On the other hand, the political stability in the developed countries offers opportunities to Apple Inc. security against possible negative political issues that might affect their business. As a result, Apple can enhance and improve its performance through taking maximum advantage of these political opportunities in its environment.
The economic factors that affect apple corporation include the rapid economic growth of the developing nations as well as stable economies of the developed countries. These economic, environmental factors also present Apple Inc. with opportunities. To begin with, the financial stability of the developed nations creates opportunities for Apple to expand their businesses. The rapid growth of the developing countries is even more critical to the development of Apple Inc. For example, the rapid economic growth rates to the Asian nations are the primary creators of opportunities for Apple to increase its revenues by selling to these foreign countries.
Five Forces Analysis of Apple Inc.
The five forces analysis of Apple Inc. indicates that Industry Competition and the bargaining power of the buyers as the two robust forces that profoundly impact Apple’s profitability (Bhasin, 2018). Industry Competition is one of the two most influential marketplace forces that have a high impact on Apple Inc. Google Inc., Samsung Electronics Company Limited, Amazon Inc. and the Hewlett-Packard Company are examples of direct competitors of Apple Inc. Therefore, the level of competition among these significant companies in the technology sector is extremely high. This is because all these companies spend substantial amounts of capital resources on the research and development of their products as well as marketing just like what Apple Inc. does. The other thing that makes such companies highly competitive is the low switching cost. Therefore, it does not need a substantial investment for a customer to, for instance, ditch Apple’s iPad for Samsung S9 or tablet computers.
As a result, the threat of marketplace competition has been an essential consideration for Apple Inc products and industry. The primary strategy that apple company has employed is ensuring that they can continually develop new and unique products to the market. They have an innovative team that ensures that all their product departments develop these new and unique products within shorter periods. The second strategy is by strengthening its market share position.
The best way Apple Inc is going to ensure that they face off this competition in the future is by maximizing their use of cash hoards. Apple uses its cash hoards typically to pay for the construction cost of a given factory in exchange for exclusive rights to the output of the factory over a period of six to thirty-six months. Apple should consider maximizing the length of the cash hoarding period as well as increasing the number of innovative factories to more than where they stand. They will also have contracts with such companies that will enable Apple to access any innovation in these companies and decide to take it if it best suits them or leave it if it doesn’t meet their demands.
This technique will enable Apple Inc. to outsmart its competitor even further for they will be able to access new innovative technologies months to years earlier than its competitors. As a result, it will allow Apple to release groundbreaking products that are impossible to duplicate.
Under the bargaining power of buyers, there are critically two aspects of analyzing. They include individual bargaining power of the buyers as well as their collective bargaining power. From the personal bargaining power of the buyer’s perspective, Apple is not profoundly affected by it hence categorized as a weaker force. This is because Apple Inc. has a very robust number of consumers thus a loss of one customer is not a big problem to Apple since it represents a negligible amount of revenue to Apple.
On the other hand, collective marketplace bargaining power of consumers is a dominant force for Apple Inc. to ignore. Apple industry counters this challenge to remain on top of their competitors by ensuring that they continue to put significant capital expenditures in the Research and Development sector. The research has helped the apple industry to develop products that can meet all the desired needs of the customers. To facilitate it they are always able to provide latest updates to their products for instance, through the apple store in the Apple gadgets such as iPhones. The consumers receive notifications of critical updates.
In the future, the apple industry will ensure that they continue to innovate new and unique products such as the recently introduced Apple Watches with significant brand loyalty. They will also keep expanding their market with a considerable focus on adding new markets in both the developing and the developed countries. As a result, Apple will continue to maintain their customer base which will never opt to leave Apple Inc products, for instance, its iPhones for another smartphone competitor.
Threats and Opportunities Affecting Apple Inc.
The most affected part of Apple Inc by threats is its products but as a company, Apple Inc doesn’t have any threats. As a result, there are two main threats to Apple Inc. Market penetration especially in smartphones (Lombardo, 2017).
Apple Inc is facing the most significant threats through other brands of smartphones penetrating the market. This threat is profoundly witnessed by the presence of the Android operating system. This is because currently, Android has a 47.5% of the market share whereas iPhone is standing at 42% market share. Apple has to be ready for competition with Google. This is because Android is the operating system used by Samsung, HTC, Lenovo and practically anyone that wants to enter the smartphone industry.
Consequently, the iPhone world is producing new smartphones that are very much faster, easy to use and better software-hardware integration. For instance, iPhone 8 generation has been integrated with a bionic chip that blows away anything introduced by Android with the pace they come with. Secondly, the iPhone X has the best software and hardware integration witnessed in its ability to log in its users using face recognition even after growing beard and start wearing glasses. Lastly, the iPhone world uses quite easy skin as Android has failed to streamline their skin.
Apple corporation is facing numerous opportunities. They include apple cars, technology advancement, the growing market and iWatch and Apple TV (Apple, 2018). Technological advancement is the most prominent opportunity. The apple industry is presented with this opportunity due to the progress that is seen in the technology industry. This leaves the apple corporation with an opportunity to produce even more advanced MacBook’s, iPhones, iPad, Apple TV and iWatch and most significantly reach their 2020 dream of inventing the Apple car.
Greatest Strength and Weakness of Apple Inc.
Currently, the most significant strength of Apple corporation is the strong brand image. Apple gains a reputation for its high brand name image through its ability to produce innovative products which possess not only an outstanding design but also are of high quality. As a result, Apple’s brand value is the fastest growing in the globe and ranks among the best 100 brands worldwide. Apple Inc. has to exploit the maximum advantage of the opportunity present by this reputation by ensuring that they maintain their brand image as actively as possible by continuing to produce more innovative products to the consumers. They can also use the brand image and reduce their advertising expenses as compared to the rest of their competitors. This will enable them to save more and utilize the resources on other developments of the corporation. The brand image rapidly growing worldwide means more market presented to apple. As a result, apple limited should ensure increasing their markets very fast to reach more new markets in the world. This will enable Apple to maximize their profits.
The greatest weakness to Apple Inc. is witnessed in their dependency on new products launch to stay at the top over its competitors. Apple maintains its profitability through innovation of new products. This is a weakness to apple because there are a lot of high technology companies in the market that can provide the substitutes to these products. For instance, apple invention of the Apple TV operating system is a sign of diminishing apple position in the market. This is because the race to win the TV markets is not only based on hardware and software integration but instead content. This is evident by the Apple announcement of the next apple tv that contains Amazon Prime Video.
Apple Inc. Resources, Capabilities and Core Competencies
The strategic capabilities of the Apple industry are dependent on the adequacy of its resources and competence. Resources involve threshold capabilities which are tangible and intangible. The tangible resources include the CEO Steve Job, Employees, Software, Hardware, Retail stores and the suppliers. Apple brand name, knowledge of the employees, cash and customer’s database form the intangible resources. The capabilities for apple competitive advantage include unique design capability, innovation capability and mighty brand name. The core competence of apple is innovative designs and technology-based software.
Apple Inc Value Chain
Apple Inc. can use its resources, capabilities, and core competence to expand on its activities through the apple inbound and outbound logistics, exploiting their market and sales as well as enhancing their services. The primary source of value in Apple inbound logistics is from its ability to maximize the economies of scale provided by the massive scope and scale of its business operations. They also exercise immense bargaining power in dealing with its suppliers, hence able to secure cost advantage in the purchase of resources. Their outbound logistics involves warehousing and distribution of ready iPhones, iPads, iMacs and other products produced. The massive source of value here is the e-commerce sales hence making apple becoming the third largest retailer in the US.
References
Apple. (2018, April 20). Environment. Retrieved from Apple Inc.: https://www.apple.com/environment/
Bhasin, H. (2018). SWOT Analysis of Apple Inc.- Apple SWOT Analysis. Marketing91, 11-19.
Lombardo, J. (2017). Apple Inc. PESTEL/PESTLE Analysis & Recommendations. Panmore Institute, 29-41.
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