Business Strategy - Apple Assignment

BUSINESS STRATEGY

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Analysing macro environment of Apple...........................................................................1
TASK 2............................................................................................................................................3
P2 Analysing internal environment and capabilities of Apple...............................................3
TASK 3............................................................................................................................................5
P3 Competitive analysis of Apple..........................................................................................5
TASK 4............................................................................................................................................6
P4 Applying Bowman’s strategy clock to interpret and devise strategic planning for Apple
Plc...........................................................................................................................................6
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Strategy refers to the plan of action which are formulated by an individual in order to
attain some definite goals and objectives. In this context, the following report will focus on
analysing the business strategies formulated by Apple Inc for enhancing their iPad business unit.
By applying appropriate strategical model, the macro environment of Apple Inc. will be assessed
in this report. By using suitable framework, the internal environment, strengths and weaknesses
of Apple will be identified. By using Porter's five-Force Model, the competitive analysis of
telecommunication equipment and Apple Plc will be made and by using Bowman's Strategic
Clock Model, the strategic direction will be provided in this report.
TASK 1
P1 Analysing macro environment of Apple
Defining Business Strategy
In organisational context, strategy refers to plans which are devised by the top management and
strategic decision makers of the organisation helps them in providing competitive advantages
which ultimately assist them in accomplishing the aim and objectives of the study (Pisano,
2015).
Characteristics of business strategies
 Business strategies are not tactical
 Business strategies are measurable
 Business strategies are actionable
 Business strategies are clear
 Business strategies include business plan
In order to analyse the macro environment of Apple, PESTLE analysis will be used.
PESTLE analysis is very useful and efficient tool for analysing the macroeconomic environment
of an organisation (Grant, 2016). It stands for political, economic, social, technological, legal and
environmental factors which influences the business strategies. In this context, the PESTLE
analysis of Apple is described below:
 Political Factors: Political factors involve governmental policies, trading practices,
lobbying and pressure groups, inter country relationships, etc. Apple is one of the biggest
IT companies in America which accumulates large amount of profits. It possesses a
strong market in United Kingdom which helps them in retaining ample of cash (Sia, Soh
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and Weill, 2016). After BREXIT referendum, the market of UK shrinks as many large
European and other companies shifts their headquarters from UK. In order to sustain in
UK, the management of Apple devised precise business strategies and plans.
 Economic Factors: Economic factors refer to the economic policies and economic
structures. It involves domestic economy, international trade, inflation rate, taxation,
industry growth, etc. The current economic condition of United Kingdom is partly
unstable and volatile due to BREXIT. The inflation rate remains stagnant to 2.4 per cent.
This means consumers in UK prefers more to save than to spend. Apple due to its brand
image and reputation isless likely to be affected from the unstable economic condition.
 Social Factors: Social factors are the cultural aspects, attitudes, beliefs, that will affect
the demands for a company's products. These include consumers’ attitude, opinion, role
models, brand of company, technological image, demographics, etc. The societal taste
and preferences in United Kingdom are dynamic. Apple in order to fulfil the changing
needs and expectations of consumer frequently upgrades its product technologies which
help in attracting more and more customers.
 Technological Factors: Technological factors are related with technological aspects,
innovations, barriers and incentives which include, technology legislation, competitor
technology development, research and innovation, etc. Technological factors greatly
influence the business strategies (Pisano, 2015). As Apple is one of the leading IT firms,
the management constantly works on research and development in order to innovate and
upgrade existing and new technologies.
 Legal Factors: Legal factors involve laws, regulations, policies and practices followed in
a country which affects the overall business strategy of an organisation. In order to
sustain in the market economy of United Kingdom, Apple follows all laws such as Data
Protection Act, Environmental Protection Act, Consumer Health and Safety laws,
Employment Rights Act, Companies Act, etc. This helps the management to prevent any
legal uncertainties.
 Environmental Factors: Environmental factors related to the ecological and
environmental aspects affect the demands for a company's products. Due to increase in
carbon emission and greenhouse gases, government in United Kingdom mandates
organisation to reduce the emission by developing sustainable measures. For this, Apple
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invested heavily in renewable energy sources and contributed heavily in order to enhance
the environmental protection as per their CSR activities.
Ansoff Matrix
Ansoff Matrix is used by an organisation which helps them in devising strategies and plans by
considering the macro environmental condition.
Market Penetration: Under market penetration, a firm concentrates on selling its products in
the existing market. The key strategy of firm is implemented in enhancing their marketing
strategies. In this context, the management of Apple focuses on selling more of its products to
the existing market.
 Market Development: Under market development strategy, a firm concentrates on
developing new market through its existing product (Rothaermel, 2015). This strategy
only works when firms are able to increase its brand reputation. In this context, Apple
sells its products to a wider market, either at home or abroad.
 Product Development: Product development strategies are used by the firm where they
sell new and innovated product in the existing market. In this context, Apple sells new
and upgraded products to existing market of United Kingdom.
 Diversification: Product diversification strategy used by the firm is considered to be a
risky strategy where firms enter a new market with new products. In this, Apple enters
newer markets in United Kingdom with new and latest gadgets in order to gain customer
attraction.
TASK 2
P2 Analysing internal environment and capabilities of Apple
Internal environment
Internal environment of an organisation is composed of elements within the organisation
which includes current manpower, management, corporate culture, workers behaviour, skills and
competencies. It affects the overall performance and productivity of the organisation (Lewis,
2014).
Factors of Internal Environment
1. Value System
2. Mission and Objectives
3. Organisation Structure
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4. Corporate Culture
5. Human Resource
6. Labour Unions
7. Physical Resource
8. Information and Technological Resource
Appropriate factors to analyse internal environment of Apple
In order to analyse the internal environment and capabilities of Apple Plc, McKinsey 7S
model will be used. The analysis of internal environment is described below:
 Strategy: It is the plan which is developed by firm in order to gain competitive
advantages. It must be aligned with the 7 element efficiently in order to ensure maximum
success. The strategy formulated by the management of Apple is robust which gives
tough competition and other companies like Google, Microsoft and Samsung in UK
(Wheelen, Hoffman and Bamford, 2017). Furthermore, the strategy is formulated by
analysing the current internal strengths so that it can be aligned with other important
elements of the company. With concern with its iPad business units, the company is
determined to expand its operation to gain more competitive advantages.
 Structure: It refers to the organisational structure, the way business divisions and units
are organised. Apple Company boasts of a unique and non-conventional organizational
structure known as the “apple core structure”. The Apple core structure is all about the
management of human resource. The top management of organisation manages
supervisors and those below them manages employees. Through this structure, the
company has managed to streamline interactions between the company management and
employees.
 Systems: The processes and procedure of the organisation that reveals its daily business
operations and the way decisions are made. Apple iPad business unit has stores in various
cities across the UK, and its network marketing system is very viable (Ghezzi,
Cortimiglia and Frank, 2015). Furthermore, the organisation works systematically and
diligently through which they were able to sustain in the competitive environment.
 Style: Style refers to the leadership style of top management that is followed within an
organisation. From the analysis of Apple's leadership style, it was identified that it
follows both autocratic and democratic leadership style . Where some major decisions are
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to be made, top management makes decision without involving anyone and where
decision regarding employee welfare has to be take, management involves workforce of
the organisation.
 Staff: Staff is the manpower currently working in an organisation. Apple posses the
ability to attract a large human resource base and especially due to its flat management
structure. As of end of year 2014, Apple had approximately 60,000 full time employees
and close to 3,000 temporary full-time employees (Ross, Beath and Sebastian, 2017).
 Skills: Skills refers to the ability and competency of employees within an organisation.
Apple management hires skilled and talented employees irrespective of their background,
culture, religion and colour. They prefer to have diversified workforce so that more and
more innovative ideas can be nurtured in the organisation.
 Shared Values: Shared values are essential of all the seven elements. If all the six
elements of the strategy is aligned than it will enhanced the shared value of the
organisation. Apple's corporate culture is positive that promotes growth and development
of both employees and corporation.
TASK 3
P3 Competitive analysis of Apple
Porter Five Force Model
It is a framework which helps in analysing competition of a business. It was developed by
Michael E Porter in 1979 which helps in analysing the industry's attractiveness and likely
profitability of the firms. It analyses five competition forces that shape industries and helps
management in determining strengths and weakness of industry (Wheelen, Hoffman and
Bamford, 2017).
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The globalization is increasing in the whole world and many small and large company are
establishing their business operation in United Kingdom. The competition level of market is
increasing very fast. In this way, it will determine the competition level of telecommunication
industry in United Kingdom (Spender, 2014). Telecommunication industry is very fast growing
sector to increasing their profitably and productivity in marketplace. The porter's five model are
discussed in this industry to analysis the whole business operation and activity in effectively and
efficiently.
 Bargaining power of supplier- Bargaining power of supplier refers to the power possess
by suppliers who provides raw materials and other useful resources within the
organisation. Suppliers also distributes the end products to the target market. Apple in
order to sustain in the competitive environment hire specified personnels and have
effective supply chain management system. Thus, it can be considered that the supplier
power less dominately influences the management of Apple Plc.
 Bargaining power of buyer- bargaining power is important to organization to involve in
market and the industry. The bargaining power is very important for every consumer to
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Illustration 1: Porter Five Force analysis of Apple

choose any product in market. The power of customer is affect the telecommunication
sector because market has expanded and there are many organizations to launch their new
product in market. They have various options available in market of United Kingdom
such as apple, Nokia, Vodafone etc. sometimes, the consumer are not satisfied their
services (Halal, 2015) . There is very tough competition in market place. Apple is a
leading brand to provide various types of services to customer and fulfil the needs of
client.
 Threats of new entrants- In UK, the telecommunication industry is expanding their
business in different areas. Due to some issues, it is very difficult to establish a new
business in United Kingdom (Piao and Kleiner, 2015). The apple has some problem to
creating many obstructions at the time of Brexit. Apple is needed to understand the
business and then according to development, it creates new business strategy for growth
and development.
 4. Threat of substitutes- Threats of substitution are low for Apple. The technologies
used by Apple is distinct and patented which cannot be used by another manufacturing
company. Though, with increase in other and cheap alternatives devices, sales of Apple
started getting diminishing. In order to sustain in the competitive environment it is
essential and equally important for the management of Apple to devise specific strategies
and plans which helps them in gaining attraction of more and more users.
 Rivalry within the market- the competition level between the telecommunication
sectors is very high in United Kingdom. It is the most important sector to increases the
economy (Quirke, 2017). The digital technology is very popular to each and every
organization is uses their techniques for business development. The apple is fast growing
organization to enhance their level in market because of new features is launch in a
product.
TASK 4
P4 Applying Bowman’s strategy clock to interpret and devise strategic planning for Apple Plc
Strategic Planning
Strategic planning is the process of organisation where management define its strategies
or direction which provide assistance in decision making process (Pisano, 2015).
Porter’s generic strategies
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In order to gain competitive advantage, Porter suggested two overall business strategies
that could be followed in order to gain competitive advantage. Porter argued that differentiation
and low cost are effective strategies for firms to gain competitive advantages (Sia, Soh and
Weill, 2016).
Generic Strategies and Industry Forces
In today's global environment it becomes difficult for the organisations to sustain due to
increase in level of competition. The Generic strategies proposed by Porter is based on the
industry forces that affects the productivity and profitability of the organisation (Grant, 2016).
Apply Porter’s generic strategies for Apple i pad
1. Low Cost : With this strategy, the objective is to become the lowest cost operator. The
management of Apple can reduce the cost of iPad in order to gain competitive advantages
in the market (Kossyva, Sarri and Georgolpoulos, 2015). This generally involves a large
scale production which enables business to exploit economies of scale.
2. Differentiation: Differentiation strategy aims to offer a product that is distinctively
different from the competition, with the customer valuing that differentiation. By
providing distinct features in Apple iPad management of Apple will be able to gain
competitive advantage (Yoffie and Cusumano, 2015).
3. Cost and product differentiation: This is optimum strategy which can be implemented
by the management of Apple (Piao and Kleiner, 2015). Here, the management has to
provide distinctive product at reasonable cost in order to gain attraction of customers.
Every organization wants to enhance their strategic positioning by use of generating options. For
this purpose, there is an important model developed by Cliff Bowman and David Faulkner. This
model use by various companies to enhancing their strategic positioning. It helps to the
organizations with giving different alternatives and these alternatives can be selected and
evaluated by them in proper order to achieve competitive advantages.
In accordance with using this model, the strategic direction of Apple can be expressed as
follows:-
 Position 1 (Low price and added value) – in this point organization are in situation
where they should be keep the prices low of the added value product and main purpose of
this strategy is to get more customers for their low prices products. Apple can follow this
strategy and achieve target customers.
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 Position 2 (Low Price) – this strategy must apply by those business organizations who
want to become low cost product and service seller in the market. This strategy focusses
on minimise the cost and this is always associated with economies of scale (Martins,
Rindova and Greenbaum, 2015).
 Position 3 (Hybrid) – in this strategy, there are a combination of low price strategy and
some elements of product differentiation. The main motive of this strategy is target more
customers by providing them to added value and quality goods. These products must be
provided at reasonable price.
 Position 4 (Differentiation) – this strategy refers as company should offers various types
of products and services. This strategy is implementing when low cost strategy fail in
providing competitive advantages. Apple can use this for its various products to provide
their existing customers and it is best when other competitors fail to provide network
services.
 Position 5 (Focused Differentiation) – focused strategy focused at a particular product
and apply a high position of that product at higher price (Kossyva, Sarri and
Georgolpoulos, 2015). This is use in short time for getting better results. This is only
provided when there are no alternatives available. Therefore, this can be better for Apple
Company.
 Position 6 (Risky High Margin) – this strategy follow by an organization for setting
higher price for customers and product sell to them without any extra benefit. This is
successful only when there are no availability of any substitute product in the target
market.
 Position 7 (Monopoly Pricing) – monopoly pricing strategy associated with customer's
willing because there are a situating made that customer have no preferences and he will
buy at each price. Thus, Apple should assists their management to follow this only on
their fix customers.
 Position 8 (Loss of Market Share) – in the Bowman's strategic model, this is the last
strategy. According to this strategic model setting medium range price of a product with
low perceived value is unlikely to achieve many customers by using this strategy an
organization can not make competitive advantage in given market (Yoffie and
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Cusumano, 2015). Apple can consider this as an alternative of earning profit and this can
be apply each aspect of framework by implementing this.
CONCLUSION
From the above report, it can be concluded that strategy refers to the plans which are
devised by the top management and strategic decision makers of the organisation which helps
them in providing competitive advantages. In this context, the report aid in examining both
internal and external environment of Apple Plc. The competitive analysis of an organisation has
been made and the strategic direction of the company has been elaborated by using appropriate
tools and framework.
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REFERENCES
Books and Journals
Ghezzi, A., Cortimiglia, M.N. and Frank, A.G., 2015. Strategy and business model design in
dynamic telecommunications industries: A study on Italian mobile network
operators. Technological Forecasting and Social Change, 90, pp.346-354.
Grant, R.M., 2016. Contemporary strategy analysis: Text and cases edition. John Wiley & Sons.
Halal, W.E., 2015. Business strategy for the technology revolution: competing at the edge of
creative destruction. Journal of the Knowledge Economy, 6(1), pp.31-47.
Kossyva, D., Sarri, K. and Georgolpoulos, N., 2015. Co-opetition: a business strategy for SMEs
in times of economic crisis. South-Eastern Europe Journal of Economics, 12(1).
Lewis, T.G., 2014. Booms. In Book of Extremes (pp. 51-67). Copernicus, Cham.
Martins, L.L., Rindova, V.P. and Greenbaum, B.E., 2015. Unlocking the hidden value of
concepts: a cognitive approach to business model innovation. Strategic Entrepreneurship
Journal, 9(1), pp.99-117.
Piao, M. and Kleiner, B., 2015. Excellence in the Electronics Industry: The Comparison of the
Organizational Culture among Apple Inc., Samsung Electronics and Google Inc. Conflict
Resolution & Negotiation Journal, 2015(1).
Pisano, G.P., 2015. You need an innovation strategy. Harvard Business Review, 93(6), pp.44-54.
Quirke, B., 2017. Making the connections: using internal communication to turn strategy into
action. Routledge.
Ross, J.W., Beath, C.M. and Sebastian, I.M., 2017. How to develop a great digital strategy. MIT
Sloan Management Review, 58(2), p.7.
Rothaermel, F.T., 2015. Strategic management. McGraw-Hill Education.
Sia, S.K., Soh, C. and Weill, P., 2016. How DBS Bank Pursued a Digital Business Strategy. MIS
Quarterly Executive, 15(2).
Spender, J.C., 2014. Business strategy: Managing uncertainty, opportunity, and enterprise. OUP
Oxford.
Wheelen, T.L., Hoffman, A.N. and Bamford, C.E., 2017. Strategic management and business
policy. Pearson.
Yoffie, D.B. and Cusumano, M.A., 2015. Strategy Rules: Five Timeless Lessons from Bill Gates,
Andy Grove, and Steve Jobs. HarperBusiness.
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