Business Strategy: Impact of Macro Environment on Apple Inc.

This report analyses the impact of macro environment on Apple Inc. and its business strategies. It includes frameworks like PESTLE, SWOT, McKinsey 7S, VRIO and Resource Based View. The report also discusses the internal environment and capabilities of Apple Inc. and how they contribute to its competitive advantage. The subject of the report is Business Strategy and the course code is not mentioned. The report is relevant for students studying business management or related courses in any college or university.

BUSINESS
STRATEGY

Table of Contents
INTRODUCTION ..........................................................................................................................3
PART 1............................................................................................................................................3
Applying appropriate frameworks analyse the impact and influence of the macro environment
on a given organisation and its strategies...............................................................................3
PART 2............................................................................................................................................7
Analyse the internal environment and capabilities of a given organisation using appropriate
frameworks.............................................................................................................................7
PART 3............................................................................................................................................9
Applying Porter’s Five Forces model evaluate the competitive forces of a given market sector
for an organisation..................................................................................................................9
PART 4..........................................................................................................................................10
Applying a range of theories, concepts and models, interpret and devise strategic planning for
a given organisation..............................................................................................................10
CONCLUSION .............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Business Strategy is referred to as the set of steps and rules that are taken up by the
management to have a better competitive hold on the business environment. These are
combination of rules taken and the actions performed to achieve the business goals and
organisational goals. These are decisions that determine the direction and success of an
organisation. Apple is one of the leading company to have a large market share in the digital
industry. But apple was not always a success as it is now. It started with its first product which
was Apple computers. It was the first innovated product in the market. Innovation has always
been a major aspect in the products of Apple. To come off with such success, Apple had used
strategic planning to help its own workings and work in accordance to have a competitive
advantage over its competitors. The business strategies that have helped and are still helping
Apple to hold major share in market are discussed in this report. These will give insights as to
what all strategic tools and theories are there and how they can be applied in a business to help it
grow and achieve success in the market. This will be done with the help of Apple Inc.
PART 1
Applying appropriate frameworks analyse the impact and influence of the macro environment on
a given organisation and its strategies.
Business is influenced by the environment it works in. There are many internal and
external factors that influence a business's working and these are included in Macro environment.
To have a healthy business, a organisation has to give its attention to these factors and include
them while formulating business strategy (Thomas and et.al., 2021). These are discussed in detail
with the help of Apple Inc:
PESTLE Analysis
PESTLE is a model in management theory which basically talks about all the factors of
external environment which are there for a business which might influence and impact the
working of the business. PESTLE analysis is a tool used by business to analyse its political,
economic, social, technological factors that influence the working of the business. These factors
are discussed below:
 Political Factors that influence a business include the tax policies, trade
restrictions, political stability. These factors are concerned with as to what extent

a government may influence an industry or a particular company. Government
may make new tax policies and reforms that might change the whole profit
margins of the business. Apple is dependent on China for its manufacturing units
and this makes it a threat for the company due to the political unrest in that
country. Also, the cost of searching an alternative to the Chinese unit could be
high which may lead to increased prices for the company.
 Economic Factors that influence a business include cost of living, inflation and
wage rates, working hours, economic growth and decline. These determine an
economy's performance which has a direct influence on a company. For example,
a deflation in an economy might result for many businesses to shut due to less or
negligible revenue. In case of Apple, the strong US dollar could increase the
exchange rates which would in return make its products more expensive for its
key business markets all over the world.
 Social Factors that influence a business include health consciousness, population
growth rates, age distribution, safety and cultural norms and expectations that
might influence the buying of the consumers (Monteiro, 2021). These help the
business to come up such a plan of action that would guarantee the maximum
profit with consumer growth and retention. These also help them target certain
customers. In the case of Apple, the concerns about the manufacturing of Apple's
products in China could come as bad for the socially-conscious consumers.
 Technological Factors mean the innovations and developments in the
technologies of production and management. Machine learning, Deep learning,
AI are several new developments in the field of technology and if the company
fails to meet these, it might lose its position in the industry. Apple's competitors
like google and Samsung have shown their abilities to duplicate apple's services
and products . Growing technologies and high competition can be a major threat
to Apple if it lacks anywhere in the advancement and also, growing cyber crimes
can make Apple's systems less secure and there might be a threat of stealing of
personal information of consumers of apple.
 Legal Factors include the changes in the legislation of a country, changes in law
impacting the imports/exports and taxation which might influence the profits and

revenue of the businesses. These also include the internal rules and regulations of
a company which the employees and others have to abide by. A company has to
take in account all of these rules and regulations while planning strategies for the
future and competition. Apple has recently entered the financial sector which is
highly regulated with its service of Apple pay, apple has to follow all the rules
and regulations of this sector and plan in accordance with what would be
beneficial for the company and its customers. Apple might face increased level of
legal proceeding.
 Environmental Factors are mostly concerned with the surroundings and the
effect of business on environment and ecology it is working in. The laws that are
considered in this are waste disposal laws, energy consumption law, various
environmental protection laws etc. This factor is very important for the industries
that deal with manufacturing, agriculture, tourism as in manufacturing, the
amount of waste is generated in this have a bad impact on the environment so the
company focuses on reducing the waste as much as it can. CSR is a crucial aspect
in this as it has been made mandatory for the businesses to show their contribution
to CSR and they can not ignore this if they want to operate the business
efficiently. Biggest environmental issue faced by apple is the disposal of its non-
working electronic devices which also contain lithium batteries which cant be
disposed off easily.
SWOT Analysis
SWOT Analysis is a technique of assessing the internal strengths and weaknesses and
external opportunities and threats that are faced by an organisation which help them to shape
current and future business strategies (Büyüközkan, Mukul and Kongar 2021). Having an in
depth view of these helps a business act responsibly and tapping the sources which would
enhance their revenues and in response, their profits.
SWOT is acronym for Strengths, Weaknesses, Opportunities and Threats. Here's SWOT analysis
done for Apple Inc.
Strengths
 These are internal strengths of a
business that separates an organisation
Weaknesses
 These reduce an organisation to work
optimally and these are the areas where

from its competition
 Apple was ranked #1 for the 8th
consecutive year and its brand value is
$322 billion.
a business should improve to remain
competitive in the market (Forleo and
Palmieri, 2019).
 Apple's products are a luxury due to
their premium prices. Because of this
only middle and high class individuals
can afford their products.
Opportunities
 These are favourable external factors
that could give an organisation a strong
competitive advantage.
 Apple has not launched products which
are created using green technology.
This will help them be sustainable.
Threats
 These are the factors that can harm an
organisation potentially.
 US has imposed high tariffs on imports
from China, this means increasing
overall cost for Apple Inc. and making
the products expensive for customers.
Stakeholder Analysis
Stakeholder analysis is a process of identifying internal and external people or
organisations who holds an interest in the working of a business (Eskerod and Larsen, 2018).
This is an another step to identify factors that might influence the working of an organisation and
forms its macro environment.
The place that you assign to a stakeholder on the grid shows you the actions you need to take
with them: High power, highly interested people (Manage Closely): a company must fully engage
these people, and make the greatest efforts to satisfy them. High power, less interested people (Keep Satisfied): a company must put enough work in
with these people to keep them satisfied, but not so much that they become bored with
your message. Low power, highly interested people (Keep Informed): a company should adequately
inform these people, and talk to them to ensure that no major issues are growing (Fusaro,
and et.al, 2017). People in this category can often be very helpful with the detail of your
project.

 Low power, less interested people (Monitor): a company again, supervise these people,
but don’t bore them with excessive communication.
PART 2
Analyse the internal environment and capabilities of a given organisation using appropriate
frameworks.
Internal environment is analysed using the following frameworks:
McKinsey 7S
It is a framework for organizational effectiveness that says there are 7 forces which are
needed to be aligned and reinforced in order for a successful business (Razmi, Mehrvar and
Hassani, 2020). It is a management model. It talks about hard elements which are influenced by
management and soft elements which are influenced by corporate culture. The model is
discussed in relation to Apple Inc.
 Strategy is organisation's plan to develop competitive advantage over its
competitors. Apple follows differentiation business strategy with focus on design
and advanced products. They also put emphasis on divisions in services of
business and more investments on research and development.
 Structure is organisational structure which deals with superior-subordinate
relations (Helmold, 2019). It tells how your company is organised. Apple has
modified its structure and now more autonomy has been granted for decision
making to employees at all levels.
 Systems refers to the daily procedures of the business that employees perform to
get things done. It also refers to how employees are awarded for work done.
Apple has “Apple Fellowship Program” awarding individuals who made
extraordinary contribution in workspace.
 Shared Values are core values of an organisation and reflect its general work
ethic. Apple's vision was 'to change the world through technology' which is being
achieved with all the advancements it is bringing in the world.
 Style is the leadership style adopted. Apple has achievement oriented leadership
style. It has also implied decentralised approach which helps in better and faster
decision-making.

 Skills talks about actual skills and competencies of employees of the company.
Apple always recruits the best workforce based on their merit and qualifications
which has advanced skills and capabilities and further groom them to facilitate
growth and development.
 Staff includes the employees and their general abilities. To enhance the abilities
of staff, Apple invests maximum in R&D department.
VRIO Analysis
VRIO is a business analysis framework which help firm's larger strategic plan. This
framework measures how sustainably competitive the resources of an organisation are compared
to rival firm's (Chatzoglou and et.al., 2018). The framework measures how valuable, rare,
inimitable and how organised the resources of an organisation are. Value of the resource asks whether the organisation has a resource that is valuable to
them? If the company lacks such resources, it is said to have competitive disadvantage.
Apple being a leading technology worldwide have all the resources which holds high
value to them. For example- Research and Innovation, Marketing, Product line etc. Rareness of the resource asks if the firm holds any resource which is hard to find and is
rare in the industry. If it doesn't hold any of such, the firm is said to have competitive
parity with other firms in the industry. Apple holds such resources and some of them are,
product line, talented HR, Supply chain, Bargaining strength. Costly to imitate deals with duplication of resources and how hard is it for the rival firms
to attain them. With time the rival firms will have a hold of that particular resource but
till then, the firm has temporary competitive advantage in the industry. Some of the
resources which comes under this category are, Brand equity, Global recognition, product
quality.
 Organisational competence and capabilities to make most of the resources measures
how much the company was able to make use of or exploit the resources which are
valuable, rare and hard to imitate. Such resources of Apple are, research and innovation,
supply chain, marketing.
Resource Based View
The resource based view is an approach to implement a company's strategy. It basically
says that the resources of a firm has to fulfil a specific criteria in order to create a sustained

competitive advantage (PRADHANTI, 2018). It basically guides the managers and policy
makers to look for the sources of advancement and the sources that will guide the business to
have competitive advantage. This model divides the resources of a firm into two segments,
Tangible and Intangible which are either heterogeneous or Immobile and hold the attributes of
VRIO model and gives the business a competitive edge in the industry. Apple being in
technology industry deals in software and hardware products. Hardware products being iPhone,
iPad etc. which are result of differentiation strategy apple follows. Intangible assets are like
brand reputation of Apple, patents and copy rights that gives Apple a competitive advantage in
the industry. Heterogeneity of the resources depends upon their skills and capabilities (Elia, and
et.al., 2021). Apple produces such different products which are always new in the market. They
share a strong hold in the market because of this. Immobility deals with the resources not being
able to transferred from one organisation to other. In the short run, the technologies used by
apple are not mobile and others can not derive benefits from same.
PART 3
Applying Porter’s Five Forces model evaluate the competitive forces of a given market sector for
an organisation.
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PART 4
Applying a range of theories, concepts and models, interpret and devise strategic planning for a
given organisation.
Bowman's Strategy Clock
It is model that is used by the management, mostly in marketing to analyse the
competitive position of a company comparing it's products to that of the competitors
(Echchakoui, 2018). It focuses on eight possible strategies. These are:
 Low price/low value added is about quantity selling. The offerings are low in
value and the price is lowest possible.
 Low Price strategy suggests becoming the lowest cost option for buyers in the
marketplace. In this a firm sells in high quantity but the price of individual
product is low.
 Hybrid strategy suggests in dealing between low price and differentiation.
 Differentiation strategy is where a business focus on differentiating its products
and services by adding perceived value. Business can have full product diversity
with unique features.
 Focused Differentiation is all about providing high value to the customers at a
high price. It can be difficult to maintain but provides high profits.
 Risky High Margins is basically increasing the price of the product without
adding any perceived value to the offerings.
 Monopoly Pricing is when a single company controls the product and its pricing
(Shakhshir, 2014).
 Loss of market share is the worst case in the lifetime of a company where the
business is exiting the market or the revenue is in decline and business is about to
shut. Apple basically deals in focused different ion and risky high margins.
Porter's Generic
Porter's Generic Competitive strategy introduces three major strategies that can be used
by management to have a competitive hold in the industry (Hales and Mclarney, 2017). There
are two basic types of competitive advantage a business can possess: Low cost and
Differentiation. The three strategies are:

 In Cost Leadership strategy, the organization tries to become the low cost
producer in the industry. It tries to cut as much costs of production as possible and
provide its products at low prices. Economies of scale is the most reliable way to
reduce costs. Apple need not to focus on this strategy due to its brand value.
 In Differentiation strategy, the organization find ways to dominate the market by
introducing something new in the products or service or a completely new product
or service that are widely valued by the consumers and which would make it stand
out. Apple may follow this if the research and innovation department come up
with new information regarding the market.
 In Focus strategy, deals with a particular group of people in a market or a niche
market with specific interests (Anwar and Hasnu, 2017). Business find ways to
engage and serve them. Apple may want to follow this strategy as every market
consist of different interests and may tap the opportunity to have new customers.
There are two sub-types in this- In cost focus, business tries to cut costs and
provide its products or services at cheaper prices to the group in question. In
differentiation focus, it find ways to bring something new which is also valued by
this group of people to satisfy their demand.
CONCLUSION
From the above mentioned essay, it has been concluded that the a business need to follow
a set of models to come up with the best business strategy. The report has been made taking
Apple Inc. in focus. The report deals with a set of questions which have been answered in detail
with the help of following models, PESTLE, SWOT and stakeholder analysis to study macro
environment, McKinsey 7s, VRIO and Resource based view to see how competent the resources
of Apple are and its internal abilities, Porter's five force model, Bowman's strategy clock and
Porter's generic model to study the different strategies that can be taken up by Apple to have
competitive hold in the market.

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