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Strategic Management

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Strategic Management

Apple Inc. is an American-based company with its headquarters in Cupertino, California.

The company was founded in 1977 and has since been in operation. Apple is categorized as the

largest in revenue generation and market capitalization. For instance, the company has 526

operational retail stores across the globe. The company operates in the industry of software

services and consumer electronics. Some products associated with Apple include the iPod, iPad,

iPhones, and Macintosh computers. The existence of various products in the market made by

Apple is evidence of the growth that the company has experienced since its inception. The extent

to which Apple has grown is further portrayed by its transition from its brand name, Apple

Computer Inc., to Apple Inc. This line of thought is based on the determination that the brand

name transition demonstrates the diversification that the company has experienced in terms of its

products and services.

The company's growth is also shown by the number of employees it constitutes on a full-

time basis and in other parts across the globe. For instance, the company has 46,000 employees

working on a full-time basis. Also, 2800 others are operating in its retail stores in the rest of the

world. Over the years, Apple Inc. has built a firm customer base with the influence of its

philosophy mirrored in its advertising techniques. Besides the operational philosophy, Apple has

a mission, vision, and values that have propelled its exceptional performance over the years. For

instance, the company's vision is "to make the best products on earth and to leave the world

better than we found it." This vision statement mirrors the goals that the company hopes to

achieve. Looking through the company's vision, one figures out the desire for excellence, and

most importantly, it spells out the benefits that its products hope to instill in the people and

planet Earth as a whole. Arguably, the vision statement of Apple aligns with the conventions of
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creating corporate statements. For instance, the vision statement spells out the company's goals

and instills emphasis on its strife for excellence. However, Apple can enhance its vision

statement by being more particular about its future target market expansion and strategic

direction.

The mission statement of Apple Inc. is "to create technology that empowers people and

enriches lives." This mission statement has been the basis by which Apple has served to satisfy

the needs of its target population since it creates a connection between technology and the

people. For instance, with its mission statement, Apple hopes to foster a sense of empowerment

in the consumers of its products. It is worth noting that Apple Inc. has a compelling mission

statement since it gives information about technology and how the company hopes to touch the

lives of its product consumers. However, the company's mission statement can be enhanced by

adding more critical components such as its brand identity, the strategic objectives of the

company, and, most importantly, the employees.

Environmental Analysis

PESTLE analysis is a strategic tool of analysis that helps companies manage the available

opportunities and impending risks. Besides managing the impending risks and opportunities,

PESTLE analysis helps companies make informed decisions by giving them an in-depth

understanding of the external environment.

Political Factors

Apple is one of the companies primarily influenced by political factors in the areas it

operates. This line of thought is influenced by the determination that Apple's operations are

affected by taxes, trade restrictions, and government regulations. Extant literature has shown that

policies such as government regulations and taxes impact Apple's operations since they influence
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its bottom line, an aspect that significantly affects its ability to effectively operate (Khalid &

Viktoria, 2023). According to Mao et al. (2020), political instability can also affect Apple's

operations. Mao et al. (2020) have based their argument on the determination that when political

instabilities engulf countries where Apple is operating, there is a disruption in the company's

supply chain. In addition to political instabilities, the trade wars are other factors affecting

Apple's operations. Trade wars impact Apple's operations since they make products extensively

expensive, reducing the company's competitiveness.

Economic Factors

Apple is among the companies affected mainly by economic factors at the local and

global levels. One of the critical factors that Apple needs to watch out for when investing is

economic growth. Economic growth creates an upsurge in the demand for the company's

products. However, it is also integral for the company to be keen on its investments since there

are times when economic growth could trigger inflation, making it expensive for people to afford

Apple products (Mao et al., 2020). Exchange rates are also an economic factor for Apple Inc. to

consider. Considering the exchange rates is critical since Apple products are sold globally in

different currencies. For instance, when the dollar is relatively lower than the Euro, it becomes

expensive for people in European countries to afford Apple products. Mao et al. (2020) stipulate

that there is a need for Apple to consider factors such as consumer spending since it is the core

driver of economic growth. For instance, in countries where consumer spending slows, the

company's sales are likely to decline.

Social Factors

There are numerous social factors that can influence the operations of Apple in various

markets. These factors include a shift in demographics, nationalism, and the change in the
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preferences of the consumers. Investigative research studies indicate that, recently, there has

been a significant shift in the preferences of consumers (Khalid & Viktoria, 2023). This line of

thinking is influenced by the determination that, in recent years, most people are embracing

products that promote environmental sustainability (Khalid & Viktoria, 2023). The transition to

environmental sustainability and the desire for ethical products presents a challenge for Apple

since the company has to change to align its products with the needs and preferences of the

consumers. For instance, there have been incidences when Apple has been largely criticized for

incorporating conflict minerals in their products. The rise of nationalism is another factor that

Apple needs to watch out for since it could lead to the installation of factors such as investment

and trade restrictions (Mao et al., 2020). Besides the nationalism rise, Apple needs to watch out

for a shift in demographics. A demographic shift is a good thing for Apple since its products

have immense popularity in urban areas. An example is the indication that it is a good thing for

Apple that while most people in China are aging, there is a significant growth in the Middle-class

population in countries such as India.

Technological Factors

Apple operates in the technology industry, which makes it liable to technological factors.

Examples of such factors include rising technology regulations, innovation, and cyber security

threats. Zhu et al. (2021) indicate that technological innovation is among the factors that foster

economic growth. In this case, there is a need for Apple to remain ahead of its game to garner a

competitive advantage over its competitors. For instance, Apple is identified to have been among

the first producers of touchscreen mobile devices. The company has maintained its competitive

advantage by producing more advanced and innovative products (Zhu et al., 2021). However,

there is a need for the company to make more profound investments in cybersecurity to maintain
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and develop a broader customer base. Studies indicate that Apple is among the companies that

have experienced constant cybersecurity attacks in the past years (Zhu et al., 2021). However,

the company has effectively responded by making further investments, such as installing more

advanced infrastructures and educating its customers about cybersecurity.

Legal Factors

The global presence of Apple makes it necessary for the company to consider the

influence of legal factors. For instance, the company must consider protecting its intellectual

properties. Protecting intellectual properties helps ensure that the company's products are

guarded against copying by competitors (Geradin, D., & Katsifis, 2021). Also, there is a need for

Apple to consider the nature of data privacy regulations in various countries. For instance, the

company can upgrade its data privacy policies to comply with the laws that require the company

to acquire consent before collecting data from its users.

The Five Porters Forces

Porter's Five Forces is a model of analysis that examines a company's competitive

position in its operation industry (Goyal, 2021). According to porter’s forces, five major factors

determine the competitiveness of an environment in which a company operates.

Competition in the Industry

Apple faces immense competition from companies such as Google Inc., Amazon, and

Samsung. This line of thought is influenced by the determination that companies such as

Amazon, Samsung, and Google Inc. have similar aggressiveness regarding marketing,

developing new products, and innovation (Abba, 2021). Further, other giants in the industry have

similarly embraced product differentiation, ensuring that consumer needs are well satisfied.

Therefore, there is immense rivalry in the industry, a force that Apple has to reckon with.
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Buyer Bargaining Power

Information availability for the customers makes Apple's bargaining power a reckoning

force. Extant literature indicates that the buyer bargaining power is minimal for Apple when

considered from the individual perspective rather than the collective (Goyal, 2021). The

difference is that at the personal level, Apple experiences minimal loss in its revenues.

Threat of Substitution

The threat of substitution concerns products that do not impose direct competition but can

be used as substitutes. In the industry in which Apple operates, the threat of substitution is

shallow. This idea is based on the determination that the other products do not match the

capability of Apple products. For instance, their products have a robust operation system, giving

them a strong market position.

Supplier Bargaining Power

Supplier bargaining power is about their influence when making demands on the

companies. Apple operates in an industry where there are numerous component suppliers. In this

case, the demands of the individual suppliers remain insignificant in the operations of Apple.

Also, due to the company's influence in the industry, it switches from individual to component

suppliers without challenges.

Threats from New Entrants

It is challenging for new entrants to compete with Apple since the latter has extensive

massive shares. Also, Apple is well-established as a brand. Therefore, the new entrants must

massively invest to equate themselves with Apple. However, the company still faces the threat of

new entrants from companies such as Amazon and Google since they have intense financial
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investment (Abba, 2021). Therefore, threats from new entrants moderately affect Apple since the

competition is only from established companies entering the industry.

Evaluation and Recommendation

strategies. The framework has five critical elements: the arenas, vehicles, differentiation,

economic logic, and staging/pacing.

Arenas

Arenas are the industries, segments, and markets by which an organization operates. In

Apple's case, the company deals with software, consumer electronics, and online content.

Concerning arenas, Apple enjoys a competitive advantage over the other companies in the

industry since it was the first to introduce the iPhones by reinventing its mobile categories.

Differentiators

They are unique aspects of a company that make its services and products outstanding

from the others. For instance, Apple Inc. has features such as unique user experiences, its design

of products is aesthetic and an expansive ecosystem of software and hardware-based products.

Staging

Staging is the series of activities a company undertakes to bring its services and products

to the market. Apple is among the companies with diversified staging practices that allow it to

get its products close to the consumers. For instance, the company invests deeply in marketing

strategies. Also, it has an extensive sales team. Apple is also involved in product manufacturing

and development, which gives it a competitive edge over the other companies.

Vehicles

The vehicles are the networks companies engage to ensure that their products and

services are delivered to the people. Apple is one of the companies doing exceptionally well
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since it has a wide range of channels by which its products get to the people. For instance, extant

literature indicates that the company has 526 retail stores across the globe. Besides the physical

retail stores, Apple also enjoys a significant online presence (Rasheed & Abbas, 2022). The

online presence allows customers to order their products without necessarily getting to the

physical retail stores. Also, Apple engages the services of third-party retailers to get to its

customers.

Economic Logic

Economic logic is an integral aspect of any business operations. This idea aligns with the

realization that for a company to perform well, it has to create value for itself and the target

population. At Apple Inc., economic logic is achieved through developing and manufacturing

high-quality products (Rasheed & Abbas, 2022). Creating high-quality products allows the

company to engage the technique of premium pricing. Through premium pricing, there is value

on the company's side, and the people enjoy high-quality products that give them the desired

experience.

Recommendations for Future Business-Level Strategy

Supply Chain Management

Engaging in intense strategic management is a good move by Apple since it will help the

company acquire its raw materials for production with much ease and, at the same time, ensure

that the products are timely delivered to the customers (Budiono et al., 2021). For instance, the

company has to ensure that it establishes close connections with its suppliers. Working closely

with the suppliers will enhance the company's production process, leading to reduced costs and

allowing the company to garner a competitive advantage over its competitors (Budiono et al.,

2021). Further, properly managing the supply chain will ensure that the company runs out of
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products at no given time. Most importantly, proper supply chain management will ensure no

risk of any of their products becoming obsolete.

Innovation

Apple is known for its diverse software-based products and consumer electronics

production. Innovativeness is key in the future business strategy of Apple to acquire a

competitive edge. For instance, Apple was the first tech company to make a user interface

(Johnson et al., 2019). The user interface was initially used on computers but has since advanced

to smartphones. Apple is also the pioneer in the production of products such as iPods. In this

case, for the company to maintain its competitive advantage over the other giants in the industry,

it has to enhance its ability to maintain visibility in regard to the developing and production of

new products (Johnson et al., 2019). For example, in the future, the company must be able to

produce products sharing applications, software, and the general operating system. Notably,

producing products that effectively complement one another is an effective business strategy for

Apple since it will help harbor the competition and, at the same time, foster the growth of its

customer base.

Customer Loyalty and Value of Apple as a Brand

Building customer loyalty is an aspiration for every company. Apple can build customer

loyalty by developing good interactions with consumers. The company can initiate good

relations with consumers by developing and manufacturing products that satisfy their preferences

and needs (Rasheed & Abbas, 2022). For instance, the commitment that Apple enjoys from its

customers is the value for quality and standards that it offers to the people. In this case, the

company has to ensure that they have a firm commitment to satisfying the consumers'
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preferences and needs and wants to garner a cult following that will give them a competitive

advantage over the other giants in the industry.

Invest further in Research and Development.

For Apple Inc. to maintain its quality product performance, it must indulge in further

research and development. This line of thought resonates with the indication that the company

has invested in research and development over the years, guiding it into developing innovative

products such as iPhones, iPods, and smartwatches (Rasheed & Abbas, 2022). The company is

already involved in another innovative product, the VR headset, which is expected to be on the

market by 2024. Constant research and development will equip the company with the knowledge

to develop more innovative products that make it unique to the other companies in the industry.

Product Differentiation

Apple is among the companies that have performed well in the industry since its products

are unique and of high standards. In this case, the company has to invest even further in product

differentiation to ensure that it keeps up with the modern trends of style and sophistication to

ensure that the needs, interests, and preferences of its product consumers are satisfied.
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References

Abba, M. T. (2021). Analyzing competitors and creating a competitive

advantage. Interdisciplinary Journal of Applied and Basics Subjects, 1(8), 31-42.

Budiono, S., Purba, J. T., & Adirinekso, G. P. (2021). Strategic Business Analysis by Using

Determinants of Buying Decision on Products: Lessons from an International Company

in Indonesia. In ieomsociety. org. In Proc Int Conf Ind Eng Oper Manag (pp. 1232-

1242).

Chen, X., Liu, Y., & Gong, H. (2021, December). Apple Inc. Strategic Marketing Analysis and

Evaluation. In 2021 3rd International Conference on Economic Management and

Cultural Industry (ICEMCI 2021) (pp. 3053-3061). Atlantis Press.

Geradin, D., & Katsifis, D. (2021). The antitrust case against the Apple App Store. Journal of

Competition Law & Economics, 17(3), 503-585.

Goyal, A. (2020). A critical analysis of Porter's 5 forces model of competitive advantage. Goyal,

A.(2021). A Critical Analysis of Porter's, 5.

Johnson, K., Li, Y., Phan, H., Singer, J., & Trinh, H. (2019). The Innovative Success that is

Apple, Inc.

Khalid, M. A., & Viktoria, D. V. (2023). Strategic Marketing Plan for Apple Inc. Network

Intelligence Studies, 61-74.

Mao, Y., Lai, Y., Luo, Y., Liu, S., Du, Y., Zhou, J., & Bonaiuto, M. (2020). Apple or Huawei:

Understanding flow, brand image, brand identity, brand personality, and purchase

intention of smartphone. Sustainability, 12(8), 3391.

Rasheed, R., & Abbas, R. N. Y. (2022). Samsung Electronics and Apple, Inc.: A Study in

Contrast in Competitive Analysis in 21st Century.

Zhu, X., Hu, R., Zhang, C., & Shi, G. (2021). Does Internet use improve technical efficiency?

Evidence from apple production in China. Technological Forecasting and Social

Change, 166, 120662.