Analyzing Business Strategy of Apple using Frameworks and Models

This report analyzes the impact of macro environment on Apple's business strategy, evaluates its internal environment and capabilities using frameworks such as SWOT analysis and VRIO, and applies Porter's Five Forces model to evaluate the competitive forces of the market sector. It also includes a strategic management plan for Apple based on the outcomes of the analysis.

Business strategy
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Table of Contents
Introduction......................................................................................................................................4
LO1 .................................................................................................................................................4
P1 Applying appropriate frameworks analyse the impact and influence of the macro
environment on a given organisation and its strategies..........................................................4
Stakeholders mapping............................................................................................................4
PESTLE analysis....................................................................................................................5
M1: Critically analyse the macro environment to determine and inform strategic management
decisions.................................................................................................................................6
Ansoff matrix .........................................................................................................................6
LO2..................................................................................................................................................7
P2 Analyse the internal environment and capabilities of a given organisation using appropriate
frameworks.............................................................................................................................7
VRIO framework....................................................................................................................7
M2 Critically analyse the internal environment to asses strengths and weaknesses of an
organization’s internal capabilities structure and skill set......................................................9
SWOT analysis.......................................................................................................................9
LO3................................................................................................................................................10
P3 Applying Porter’s Five Forces model evaluate the competitive forces of a given market
sector for an organisation.....................................................................................................10
Porter’s Five Forces model...................................................................................................10
Balance scorecard ................................................................................................................11
M3: Devise appropriate strategies to improve competitive edge and market position based on
the outcomes.........................................................................................................................12
LO4................................................................................................................................................13
P4 Applying a range of theories, concepts and models, interpret and devise strategic planning
for a given organization........................................................................................................13
Porter's generic strategy........................................................................................................13
Bowman strategy clock :......................................................................................................13
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M4: Produce strategic management plan that has tangible and tactical strategic priorities and
objectives..............................................................................................................................15
D1: Critique and interpret information and data, applying environmental and competitive
analysis to produce a set of valid strategic directions objectives and tactical actions.........15
Conclusion.....................................................................................................................................16
References .....................................................................................................................................17
Books and journals ..............................................................................................................17
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Introduction
There are various aspects of strategic management plan which is used in production of
plans. These aspects helps in making various strategic priority and objectives that can help in
achieving organisational objectives. In today era, an effective business strategy helps the
organisation in success of the company and growth in the market. Business strategy is refers to
action or a working plan which is being developed by form top accomplish their aims and
objectives and mission in most effective manner. Further, this business strategy is playing
essential role in optimisation of performance of companies and optimum utilisation of resources
in business environment (Adner, 2017). This report is based on Apple organisation. As Apple is
the biggest leading production company which is using differentiation strategy to stay in market
and among competitors. It is an American multinational technology that deals in products like
electronics, online services, computer software etc. it was founded in the year 1976, and is
having 512 retailing stores in number of locations. There are about 147,000 employees working
in an organisation currently. Company is using effective business strategy to enhance their
customers. This report incudes appropriate frameworks, and analysing the internal and external
factors. Further it includes Porter's five forces model and range of theories and models for devise
strategic planning.
LO1
P1 Applying appropriate frameworks analyse the impact and influence of the macro environment
on a given organisation and its strategies.
In relation with Apple organisation, there are various influences which are being assured
by macro environment. The vision of a company is to specify various range of products and
providing quality for its customers (Cavaleri, and Shabana, 2018). The mission of company is to
describe the areas and goals of driving towards its vision. Company core values includes
diversity and inclusion, accessibility, education, environment, privacy an supplier responsibility.
Stakeholders mapping
Shareholders are consisting of various parties. These are discussed in the below diagram.
This helps in understanding of various stakeholders:
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It is said that from above diagram, there are various dimensions which are needed for
arranging and managing perfectly. As Apple is having people from all the dimensions. There are
four different sides are enclosed in this. As most powerful and interest are refers to key players.
These includes Apple government, law agency etc. then if influence is reduced and having high
interest then it includes potential buyers (Chatterjee, 2017). Then if there is reduction in both
interest and influence, then it includes young people. Then next stage is when influence is higher
ten interest, it includes customers who can easily shift to another party if they cannot find quality
of products and services.
PESTLE analysis
 Political: It is seen that there are various political changes which re coming in between
organisational functions and these are affecting Apple. Government is patronizing all the
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Illustration 1: Stakeholders’ matrix, 2020

activities of company very effectively. Brexit is creating several changes that could be
occurred in bad political parties. It is important because every organisation should have to
follow their own country rules and regulations.
 Economical: As increased labour cost in china will affects the cost advantage of some of
the Apple products. A increase exchange rates in US dollar makes more expensive for
Apple to run their business in China and Europe.
 Social: Some of the social factors like largest customer spendings in Africa in which
people are unfamiliar with Apple products. As apple should have to make strong
relationships with society (Cosenz, Rodrigues and Rosati, 2020). However, the rate of
customers turnover is low and their satisfaction level increase to 80%. this helps them in
creating more opportunities for them.
 Technological: Apple should have to deal with various technological issues. If they are
managing technological changes then there efficiency can be assured. With the helps of
using latest technological updates, Apple is trying to reduce their cost and efforts of
employees and this will be resulting in increasing employees satisfaction.
 Legal: As by offering financial services to the customer now a days, company is
increasing their levels of litigation. As new information is coming that company is
planning to enter into other auto mobile sector. This needs increase in regulatory and
litigation cost and insurance cost as well.
 Environmental: Apple is not harming any environmental system. They are announcing
Green company which is working more effectively.
M1: Critically analyse the macro environment to determine and inform strategic management
decisions.
Macro environment consisting of external factors which can impact the business
performance. From the pestle analysis, it is analysed that there are certain opportunities and
threats that can impact the business performance. Also, ans off matrix is used to analyse the
market, so if company wants to enter into the new market.
Ansoff matrix
This model is representing four choices which is helpful in knowing about the growth of
organisation at market place and among the competitors.
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Market penetration : In this first strategy, a company is providing goods and services to
the exiting customers in exiting market. This is consider as effective way of increasing customer
base. In this organisation is providing products to its exiting customers only and enhance their
profits more (Dau, Moore, and Kostova, 2020).
Product development: Under this strategy, a company is producing new products and
services in exiting market. As in this company launches new products by adding new features in
their products and share it in exiting market to the exiting customers. This enhance customers
towards the products and services.
Market development: In this strategy, organisation is coming in new market and offer
their exiting products and services to attract new customers in new market. This strategy helps
the organisation in attracting more new customers towards their brand and capture new market.
Diversification : This is the last strategy which is used in this model as in this
organisation is launching new products and services in new market. This is the very risky
strategy which is used by Apple organisation to develop their large customer base by providing
new and latest techniques to the customer (Dayan,Heisig and Matos,2017). This results in
increasing revenue of organisation.
LO2
P2 Analyse the internal environment and capabilities of a given organisation using appropriate
frameworks.
For understanding of internal capabilities, internal analysis is most important. A internal
analysis includes cost position, organisational competencies, competitive viability at
marketplace. This can be done through various models such as SWOT analysis and VRIO
framework. These are discussed below :
VRIO framework
While using of VRIO analysis, mangers of a company can make best use of action to
strengthen their business which is based on core competencies and long term competitive
advantages (Gattorna, 2017).
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Valuable: Competencies in Apple organisation is creating opportunities from internal
and external environment. These helps the business in expanding and growing in a market.
Premium product quality is a valuable source because it mainly targets high income class people
by its products and they are having premium price tags. Premium quality products are unique and
inimitable as well. Then supply chain is a also a valuable resource and global recognition is most
valuable because company is mainly focusing on innovation and its quality. Further, it
employees are valuable as they are providing proper training to their staff members.
Rare: Rare is in nature can be helpful in gaining competitive advantage. As company is
having global presence which is a rare resource because it consist of global heritage and large
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customer base. Then adaptability is another resource as company is having high adaptability in
various cultures by engaging activities and making communication with their customers. As this
is a rare resource because Apple is adapting various cultures and different regions and this is
allowing company to improve their accessibility and greater visibility as well.
Inimitable: Inimitable is helping in company value to gain competitive advantage fro
long term sustainability in an organisation. These are hard and cost. As Apple is consisting of
high quality of products. Quality of products is a imitable resource. Then next resource is
location of stores is a inimitable resource because company is operating multiple stores in
various countries. As customers can easily purchase their products in any country and take
advantage of offerings. Then another resource is marketing communication and competitive
pricing is inimitable because it has helps in allowing a brand in maintain a long term competitive
advantage. As cost saving function is maintaining competitive pricing among competitors.
Organised : Financial strength is a organised functions that is supporting companies in
exploring the opportunities and launching new technologies in their products and services. Then
next is employees training is a organised and valuable resource because they are providing
better training and development session to the company and providing various other benefits as
well.
M2 Critically analyse the internal environment to asses strengths and weaknesses of an
organization’s internal capabilities structure and skill set.
Internal environment includes certain frameworks. These are SWOT analysis and VRIO
which helps in identifying the strengths and weaknesses of the company and also how much
resource are being achieved in the company. Apple is having certain weaknesses which they
have to worked upon.
SWOT analysis
 Strength : Apple is consisting of various strength which are very well. Company is
having strong operational structure. This will helps them in producing quality of products
and services and attracting customers towards their brand. Company is having top
technology products. They are customers first choice in brand. This helps them in
enhancing more customer and become a strength for them.
 Weaknesses: Company is having some of the weaknesses also, as they are highly priced
products. As they cannot be reached to middle class people. Then another is it is having
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limited advertisements and promotions. They are entering into non competency area such
as Disney, Netflix etc. further, there is a unfair business practises.
 Opportunities: Some of the opportunities which company can create is consistent
customer growth. They are providing quality of technology to the customer so that they
could attract more people (Drucker, 2020). Next opportunity can be qualified
professional, as it is having professional while using of technologies and producing latest
products. Then expansive distribution network and smart wearable technology is creating
opportunities.
 Threats : Threats for a company is coronavirus outbreaks as this has created threat for
company as there are less customers during this period. Then increasing competition is
another threats such as Samsung, Google and Dell. And it is having significant change in
market penetration by another brand in smartphones.
LO3
P3 Applying Porter’s Five Forces model evaluate the competitive forces of a given market sector
for an organisation.
Apple strategies are based on external factors which can impact business environment.
These forces reduce and limit the revenues and market share and profitability of a business.
These includes some of the factors discussed below :
Porter’s Five Forces model
Competitive rivalry or competition: companies like Samsung and Della are competing
with Apple. As high aggressive of firms is having strong force. Then low differentiation of
products is a strong force and low switching cost is a strong force. Like observable and rapid
innovation, advertising is considers to be strong force in the industry environment. It is referring
to the quality of products and services which are being offered by competitors. On the other
hand, it is easy for customers to switch over another brand (Ghobadian, and Hopkins, 2017).
That is why there is a low switching cost which is based on price, accessibility and other related
concerns. It is having low switching cost.
Bargaining power of buyers : As buying power of customers is affecting business of
Apple. This aspect of model is refers to determine how a buyers is making decision related to
purchase and related to preferences and taste which can impact the business sales an profitability.
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As it is based on some of the external factors such as low switching cost is strong in this. Small
size of individual buyers are weak force and there is a strong force in high buyer information. It
is ways for a buyer to change their brand. This external factor is exerting strong force on Apple
brand and on the other brand as well. As apple should include bargaining power of customers as
most important variables in a business.
Bargaining power of suppliers: This is regarded as a weak force as this indicates impact
of suppliers on their demands and its competitors. As in this high number of suppliers is a weak
to moderate force which is against of company. Then next is moderate to high overall overall
supply is a weak force (Gorondutse and Abdullah, 2017). Then next is high ratio of firm
concentration is a weak force. This is a external factor which is reflecting presence of number of
companies like Samsung and Apple.
Threat of substitutes or substitution: This is regarded as a weak force as it is affecting
Apple computing technology and online services of products. This helps in determining
company strength in attracting customers towards a brand. This is based on some for the external
forces like availability of substitutes is moderate force, then performance of substitutes is weak
force. Then next factor is buyer propensity to substitute is refers to weak force. As company is
having limited features. As many of the people are using Apple products because of advanced
functions. As this is impacting company business. It is having less threat of substitute products.
Threat of new entrants or new entry: this is a moderate force which is affecting
business process. As this is a model which is indicating a possibility of entering of new
competitors in a market. As it is becoming costly to compete with brand like Apple in a market.
So that is why this external factors becomes weak (Kaul, 2019). As this maintains competitive
advantage by using unique innovations and remain strong in a market to gain more competitive
advantage in a market and that is why it becomes moderate. Threat of new entrants is low.
Balance scorecard
In this given analysis, it is focusing on management performance tool. In this four
perspective will be mentioned by analysing of company vision and strategy. According to this
vision and strategy, Apple organisation policy, customers, internal process and financial aspects
are perfectly allied (Kitsios, and Kamariotou, 2017). With the helps of this alignment, various
activities of meeting goals and objectives are stated.
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M3: Devise appropriate strategies to improve competitive edge and market position based on the
outcomes.
To achieve competitive edge and market position, for this porter five forces is used to
analyse the market and the competitors existing in the market of the company. Apple is having
certain competitors which are also working upon enhancing their strategies to attract customers
and this results in decreasing customers of Apple . So they have to worked upon these strategies.
BCG Matrix
It is growth share matrix which is divided into four categories. These are mentioned
below :
 Cash cows: Apple is having two products which is coming in cash cows. These are
Apple Mac-books and Apple iTunes. They are having low growth market with having
high market share.
 Question mark: The next is Apple TV which of high cost but it not reaching to its true
potential.
 Stars: In this iPhone are the starts because they are having high market share that makes
them different from cash cows.
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Illustration 2: Balance scorecard of Apple, 2021

 Dogs : In this Apple iPods are the dogs because these are having potential to grow but
they are failed due to slow market growth.
LO4
P4 Applying a range of theories, concepts and models, interpret and devise strategic planning for
a given organization.
Porter's generic strategy
Cost leadership : Cost leaderships strategy is the strategy in which origination is mainly
focusing on reducing cost by meeting customer demands. As cost strategy is mostly focusing on
customers to be overall cost provider of products and services. This is a an efficient strategy
which is being made by organization to gain competitive advantage and sustainable growth in a
market. This is a stability which is being used in an continuation of the current strategies. This
strategy can be used by company while cutting their cost and producing it with the lower prices.
This will helps in attracting middle class people as well. And earning more profits and revenue.
Differentiation: Differentiation strategy is a strategy which is being used by origination
for differentiating themselves from the competitors (Liew, 2018). This strategy is being used by
Apple organization to make their products and service unique from other organization. From this
strategy, company is differentiating themselves from their features and making their products
unique from its competitors. This strategy aims that Apple is becoming apart from their
competitors not by the prices but it is based on product design to attract more customers. Apart
from this, company is reaching from various segments of a market. Company is having high
quality of products which having high prices. For that they are earning high profits and thus
resulting in achievement of their goals and objectives.
Bowman strategy clock :
This is a clock which is exploring strategic positioning options.
 Low value added: This is a strategy which is related with bargaining basement and in
this prices are keeping low to remain competitive in a market (Martí, 2017). Products are
refers to the inferior quality and that is why prices are attractive to attract customers. As
in case of Apple organization, its prices are premium so that it could be reach to high
income level people.
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 Low price : Low prices are resulting in producing large number of quantities of a
products and services. This includes minimization of cost so that it could be lead to
attract more customers.
 Hybrid : This is a hybrid strategy which is combining all the strategies of low prices. As
this helps in attracting customers by providing them reasonable rates and some of the
products differentiation.
 Differentiation : This is a strategy which is being used by organization. As Apple is
using this to attract more customer and provide them quality of products and gain loyal
customer base (Lüdeke‐Freund, 2020).
 Focused Differentiation: It focus on position of products by providing high price levels.
In which where customer are purchasing products due to high perceived value.
 Risky High Margins: As in this strategy, company without paying any extra offering
they are setting high prices of products an services. If customers are purchasing these
products then there is a high return. This can be seen in Apple organization products.
 Monopoly Pricing: In this customers is having limited options (Macchi, Savino and
Roda, 2020). There is only few firms offering products and services and also there is no
substitute of them.
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Illustration 3: Bowman’s Strategy Clock, 2021

 Loss of Market Share: Setting a modular or middle-range cost for a products and
services with down sensed value is improbable to win over many another customers.
M4: Produce strategic management plan that has tangible and tactical strategic priorities and
objectives
 Vision: To make the best products on earth, and to leave the world better than we found
it.
 Mission: to bring the best personal computing products
 Objective: To supply products and solutions of the high quality and present value to our
customers that earns loyalty."
 Strategy formulation : The strategy to be practice within Apple is to make over promotion
strategy through social media channels and develops new division in other country.
Other strategy includes SWOT, VRIO analysis etc. in order to know their strength and
weakness and available resources.
 Implementation: Company is instrumentality their scheme of publicity in effective
manner and develops forthcoming growth possibility as well.
 Evaluation: Some of the strategies are being measure by the execution of their
organization in market and in front of client.
 Controlling : After evaluation of the strategies, controlling and monitoring will be done
so that to measure the strategies are effective working or not and if they are not, then for
this some another strategy will be utilized.
D1: Critique and interpret information and data, applying environmental and competitive
analysis to produce a set of valid strategic directions objectives and tactical actions
Some of strategy which can be used by the company is to be competitive within their
competitors and making available their products to every single individuals who is going to
purchase it. It will also work on reducing their pricing strategy and developing actions according
to them.
Conclusion
By conducting macro environmental analysis, any business scan identify various factors
and understand their needs and demands. In context with Apple organization, they are analyzing
macro environment and can easily establish their business strategies in the market. PESTLE
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model helps in creating different idea about the role of external factors. As there are various
factors which can provide several aspects of markets and a organization. There are two main
issues which are of Apple origination. These are technological advancement and next is raw
material. Further, there is a internal environment analysis that is conducted through SWOT
analysis. Then next is using of various business models helps the organization is making
effective business strategies so that they could develop more profits and growth in an
organization.
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References
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