Analysis of Internal and External Environment of Apple Inc.

The assignment requires students to analyze the internal and external environment of Apple Inc., using theoretical frameworks like Porter's Five Forces Model and Hofstede's Cultural Dimensions. The report should identify Apple's strengths, weaknesses, opportunities, and threats, providing a comprehensive understanding of the company's position in the market.

Contemporary Management
Issues-C2

TABLE OF CONTENTS
INTRODUCTION ..........................................................................................................................4
MAIN BODY .................................................................................................................................4
1. Key dynamic forces impact on business and society. ............................................................4
2. Impact of forces in terms of effective strategic decision making ..........................................7
3. Organizations responses towards the key dynamic forces of the business. ...........................7
4.Social Change Model. .............................................................................................................8
5.Hofstede Model......................................................................................................................10
6. Decision making tools to address contemporary drivers of change. ...................................14
CONCLUSION.............................................................................................................................16
REFERENCES .............................................................................................................................17

INTRODUCTION
Management is one of the most crucial and fundamental units of any business
organization. It helps in establishing the growth and development of the organisations.
Contemporary management issues initiate the re-evaluation of the traditional approaches of the
management. It is the management tool that helps in increasing the capability of the one in
solving the issues whenever they arise in the organisation. It is the technique of developing the
practices that can help in managing the organisational issues in a systematic manner. Apple is
one of the most leading electronics and software brand of the entire nation. It is considered as the
leader of sector. Main aim of this report is to analyse and evaluate the impact and responses of
key dynamic forces of business organisations.
MAIN BODY
1. Key dynamic forces impact on business and society.
The key dynamic forces of any business organization are influenced by its political,
technical, social and economic factors. The business organization is a complex entity and it has
equal involvement of both; threats and opportunities within it. As the competition is increasing,
there is huge pressure upon the business enterprises to incorporate with the desires and
expectations of the customers (Ahlquist, 2014).
Apple is one of the top leading international brands of electrical products. It is an
American multinational company whose headquarter is situated in California. Company served
in almost each and every country of the world (Bakir, 2015). The products in which Apple deal
are Apple watch, iPhone, mac-books, I-pads, laptops, etc. To analyze the key dynamic forces
which create impact on business as well as on society, Apple uses five forces model.
Apple Inc. Five Forces Analysis (Porter's Model):
Apple is considered as one of the top leading brands of the country and it has achieved
the position of the most valuable organization in the entire nation. The five forces analysis is
conducted by the company in order to gain the information regarding the forces that are affecting
the firm. This also helps in analyzing the measures that company should incorporate in order to
evaluate its impact towards society. The company has seen some hard times and so, it is very
important for them to analyze the forces that can lay impact on the working of the firm
(Shepherd,2014).

The strategies which are being applied by the Apple are nearly related to the needs that
are to be fulfilled by the key forces of the organization (Dobbs, 2014).
 Competitive Rivalry (HIGH)
 Bargaining power of buyers (HIGH)
 Bargaining power of suppliers (LOW)
 Threat of substitutes (LOW)
 Threat of new entrants (MEDIUM)
Competitive Rivalry (HIGH): Strong competition is being faced by Apple in the market. As
nowadays, there are many new organizations that want to deal in electrical items so, competitive
rivalry is strong for Apple. In Apple, Competitive Rivalry is related to the external factors like
high aggression of the firms and low switching cost. The major rivals of the Apple are Samsung
and Blackberry. They keep on competing with Apple in order to gain competitive edge in the
Illustration 1: Porter's Five Forces Model of Apple

market. While, on the other hand, cost of switching is very low for customers that can easily
switch from Apple to other companies and thus, it creates situation of high competition for
Apple. Thus, it can be said that competitive rivalry is one of the most prominent key factors that
affect the business of the Apple.
Bargaining power of the buyers (HIGH): It comes under the social key factors that influence
the working of the business as customers are the foundations of the organization it is very
important for the organizations to satisfy the needs and desired of their consumers but
sometimes, it creates a margin of loss for the companies. The bargaining power of the buyers is
high and thus, it affects the business of the Apple. It is due to two main factors i.e. low switching
cost and small size of buying patterns of individuals. As there are number of other brands
available, it is very easy for customers to switch their brand as well as purchase of each buyer is
very small in comparison to the total revenues made by Apple. Whereas, shifting cost is very
easy for the buyers. They are considered as the strong force in creating the social impact on the
business of the Apple.
Bargaining power of the suppliers (LOW): The power of the suppliers to influence the
working of the Apple Inc. is quite low as there are several number of suppliers available for the
company and the distribution channel of the organization is very huge. As there are many
suppliers across the world, company has several number of options and thus, in Apple Inc.,
business does not get manipulated by the forces of suppliers.
Threat of substitutes (LOW): Apple is one of the leading brands of the world. The threat of
substitutes does not affect the working of the business as its popularity is beyond imagination
across the world. There are large of substitute that are already present in the market, but still
none of it can compares with the profit margins of the Apple, because of its popularity and the
brand image. The company has some loyal customers, and this helps them to maintain the
sustainable position in the competitive market. The brand awareness and recognition of Apple is
very strong across the whole world.
Threat of new entrants (MEDIUM): The force of new entrants is medium in Apple, as there is
requirement of high capital for entering in the international market; establishing brand which can
be compared to Apple is also very costly measure; so it enables the new firms to create that
impact which can fully effect the business of the Apple (Saleem, 2017). There are very less

companies which have potential to directly compete with Apple. Thus, the threat of new entrants
is medium for organization (Mathooko, 2015).
2. Impact of forces in terms of effective strategic decision making
Decision making is one of the most prominent function of the business organization,
strategic decision making is a complex process when applied with forces that exists in the
business organization. There are two types of forces that lay impact of the working of the
business, external and internal forces that are present in the business environment
(Elbanna,2017).
Strategic decision making is depend upon both the forces of the business. There are
various number of factors that affect the strategic decision making process of the organization.
The strategical decision making process in Apple is based upon: Specific characteristics that are
related to the intensity of the decision; internal factors of the organization; external factors of the
organization and characteristics of the management team. External factors of the organization
that effects its working are Threats and Opportunities of the organization; these are the forces
which effects the external working of an organization while on the other hand internal forces that
lay emphasis on the working of the Apple are its strength and weaknesses.
Such forces lay emphasis upon the decision making process that takes place within the
organization. Strategic decision are initiated by keeping all the forces of the business in mind so
as to bring growth and development to the organization (Kitching, 2015).
3. Organizations responses towards the key dynamic forces of the business.
The forces that exist in the business environment can be analyzed by using five forces
analysis. It is use to cover the overall factors that lay emphasis upon the working of the business.
This tool is made up of the five forces that use to measure the factors that create impact upon the
business. For responding towards the forces that are present in the environment organization
should lay focus upon their occurrence. Two main factors that create impact upon the working of
an organization are its external and internal forces. To handle the external forces pf the firm,
organizational heads must analyze the threats and opportunities of the organization. While on the
other hand to effectively deal with the internal forces of the organization, they must analyze the
strength and weaknesses of the organization.

In case of Apple Inc., the company wants to deal with its internal forces so the managers
and the leaders of the organization evaluated the current strength and weaknesses of the
organization. The strength of the company are its brand image and product uniqueness while on
the other hand the weaknesses of the brands is its software and price so, for managing that Apple
introduce some variants that are relatively low in prices, Example iPhone 5C.
Dynamic forces of the business are the factors that affects its internal and external
working, these are incorporated by the leaders and managers of the organization in order to come
up with the solutions or measures that can enhance the working of the organization. Such forces
lay emphasis upon the decision making process that takes place within the organization.
Strategic decision are initiated by keeping all the forces of the business in mind so as to bring
growth and development to the organization (Sopelana, 2014).
4.Social Change Model.
The model is used to indicate values of equality, social justice, personal empowerment,
collaboration citizenship and services which can be used to enhance the leadership among the
individuals. The main emphasis of this model is to establish the development of leadership
Illustration 2: Social Model of Change

qualities within the each and every participant those who want to develop formal leadership
position in the organization. This model initiate changes within the organization, and helps in
engaging all who wants to get involved within the working of an organization. This model
indicates that:
 Leadership is not a position it is a process.
 The model represents the complete value of equity, social justice, self-knowledge and
persona empowerment.
 This model is representation of the many possible models of the leadership.
There are two primary goals of this model:
 To enhance the learning and development among the individual, to lay emphasis upon
the individuals values, culture and emotions.
 To provide positive working environment for the individuals.
The social change model was established in 1994, this model initiate that leadership is the
purposeful approach and it is very important to develop its skills among each and every
individuals. It indicates that leadership lay emphasis upon the positive social change within the
organization. The example of social change within the organization is time to time variations in
the values and norms of the business functions. In Apple, significance of social change has very
effective impact upon the revolution of the industry,abolition of salary and the feminist
movement. One of the major sources of the social change in Apple are; population, growth and
composition, culture and social factors (Read, 2016). The main emphasis of this model is to,
focus upon the 7C''s of leadership:
 Consciousness of Self: It helps in initiating decision making process for the organizations
and motivates one to implement the decisions.
 Congruence: Understanding thew values, strength and weaknesses of others.
 Commitment : Requires knowledge to self.
 Collaboration: It indicate that leadership is the group process.
 Common Purpose: Enhance the capabilities to work with shared goals and aims.
 Controversy with Civility: This indicate that in any group there will be presence of the
differences be there but it is important for the team members to identify the reason
behind it in order to provide solution regrading that (THE SOCIAL CHANGE MODEL
OF LEADERSHIP, 2018).

 Citizenship: Civic responsibility of each and every individuals which helps them to work
with the social group of the organization.
The main goals and desires of social change model is:Self-knowledge and Leadership
Competency. Self-knowledge is use to address the talent, values and interest of the individuals
in order to provide them proper assessment, while on the other hand leadership competence is
the capacity to enhance the collective working among oneself and others.
5.Hofstede Model
Hofstede's cultural dimension theory is a framework which is used to establish the cross
culture communication within the organization. It lay emphasis upon the effects of the societies
culture on the value of its members and how these values can be relate to the behavior, by using
a structure derived from factor analysis. The work of the Hofstede is based upon various
research upon the cross culture psychology and also relate to the international business
communications (Mazanec, 2015).
Hofstede Model is based upon the Six dimension of the culture, these are as follows:
 Power Distance Index : This point lay focus upon the factors, that extent to which less
powerful members of the organization developed the feeling that power is distributed
unequally within the organization. In this usually this feeling was developed by usually
the members who are at lower level in the organization.
Illustration 3: Hofstede model

 Individualism Versus Collectivism: This lay emphasis upon the factors that how people
who lives in the society are integrated in the groups . While on the other hand
collectivism concentrates upon the team work.
 Masculinity Versus Femininity: it is the region of the society where men are considered
more important than the female. Both live in the same society but the importance of the
male is high as that of female.
 Uncertainty Avoidance Index : This lay impact upon the society's tolerance for ambiguity
, in which address or experience something unexpected or uncertain.
 Pragmatic Versus Normative: This lay impact upon the occurrence of the past with that
of the future challenges.
 Indulgence Versus Restraint : This dimension is used to measure the happiness of the
individuals. The one who is indulgent feel that thy are not answerable to anyone in this
society.
Apple is one of the top leading international brands of electrical products. It is an American
multinational company whose headquarter is situated in California. Company served in almost
each and every country of the world. The products in which Apple deal are Apple watch, iPhone,
mac-books, I-pads, laptops, etc. To analyze the key dynamic forces which create impact on
business as well as on society, Apple uses five forces model (Khan, 2015).
Hofstede's cultural dimension theory is a framework which is used to establish the cross
culture communication within the organization. It lay emphasis upon the effects of the societies
culture on the value of its members and how these values can be relate to the behavior, by using
a structure derived from factor analysis. The work of the Hofstede is based upon various
research upon the cross culture psychology and also relate to the international business
communications. In companies like Apple, international business is inevitable, Apple has
approximately 364 stores in 13 countries, when organizations work on such a large international
level it is very important for them to understand the variation of different cultures present in this
world. One mistake due to the misunderstanding of the culture can break the partnership among
the business partners, as because culture is the most valuable aspect of any business
organization. The huge organizations like Apple must have information regarding the clients and
countries they are dealing in in order to maintain the sustainable position in the business market
(Yunna, 2014). It is very important fort eh companies like Apple to review Hofstede Cultural

Dimensions, is the power distance is low or high, or other cultural related dimensions of the
organization. The United States is very individualistic and it has very low power distance but on
the other hand when Apple deals within China, they must incorporate the differences of the
culture variations in that case the impact of the power distance is very high within the
organization.
It is not very very critical ad hard to implement concept it just require little bit
consideration of the business organizations like Apple towards the culture and tradition of the
countries they are conducting there business. To apply the model of Hofstede more effectively
into the working of their organization, Apple should have information regarding the cultures of
the countries they are performing there business.
China: The people of the Chine are highly anti-social, so it is important for the firm to not show
any kind of anger or other emotion while practicing their business in China.
Illustration 4: Six Dimension of Hofstede

Russia: When the Company(Apple) deals in the Russia it is important for them to keep the
financial information very confidential until and unless a proper relationship gets established.
India: When dealing in this country it is important to address everyone with respect.
France: Do not rush while conducting decisions
Brazil: In Brazil appearance of the person is very important.
Apple Inc, is a multinational company that delivers very high standard of products across
the world, it deals within the commodities like, iPhone, i pads, laptops and other electrical items.
Impact of Power Distance in Apple: National and Organizational culture are two interrelated
aspect of the organization, In Apple this culture was totally depended on the management unit of
the organization. In this concept employees are only answerable to there supervisors. Proper top
to down communication s being followed in such type of culture. Apple's management are based
on this so as to create impact upon the overall performance of the organization.
Uncertainty Avoidance: This measure is use to lay stress upon the unexpected and unusual
situation of the society or the circumstances that indicated employees regarding the occurrence
of such situations, such situations occurs in the organization as because of the secrecy level
present in the organization.
Individualism: Apple Inc., the measures of organizational behavior are applicable upon the
some parts of the organization, the employees are highly committed towards there duties.
Masculinity: It lay emphasis upon the gender discrimination which can takes place within the
organization, In Apple, discrimination on the basis of gender, caste or culture never occurred.
Leadership: It is the practice which helps in developing confidence within everyone. Leaders
are responsible for both success and demean of the organization. Apple follow very effective
leadership techniques to enhance the working of there organization.
Apple Inc, is a multinational company that delivers very high standard of products across
the world, it deals within the commodities like, iPhone, i pads, laptops and other electrical items.
Apple Inc is best known as the innovator and the products that they offer within the market are
of very high quality and standard, there is secrecy in the behavior has been maintained since the
time of its beginning, the main focus of the company is always upon the innovation and that's
why it maintain the level of secrecy in order to smoothly conduct its operations but on the other
hand the confidentiality of the company cause many kind of troubles within the internal and
external environment of the organization. Apple Inc is highly depended upon the approaches of

the leadership to handle there management issues present in the organization. Cultural theories
of the Hofstede's model can help the organizations in order to take the relevant measures for
incorporating the management issues of the organization (Tseng, 2014).
6. Decision making tools to address contemporary drivers of change.
Decision making is the most important task for the managers, and it is also very critical
as it depends upon conducting some crucial decision regarding the functions of the business,
many times there is a situation comes in the organization where managers need to take complex
decisions it such cases it is very important for the members of the organization to establish
effective decision in order to deal with the unstable circumstances. Decision making process is
the tool that is sued to analyze the complex situations of the organizations (Ryan, 2014).
For the organizations like Apple, it is very important to analyze the decision before
implementing it, in order o come up with the effective solution. Decision analysis is the process
of examining the decisions before implementing it is the systematic and transparent approach to
initiate the decision making process.
Change development models are used to indicate the organizational changes that are
occurring in an organization. These changes can effect the decision making process of the
managers and leaders of the organization. In Apple organizational changes occurs just after the
death of the Steve Jobs in 2011, the company was then take over by the Tim Cook.
Running an organization like Apple requires capabilities to take and implement good and
effective decisions, because one wrong decision can affect the overall working of the
organization. It is very important for the business managers to understand the intensity of the
decision making process and keeps on regulating the skills that are required to construct an
effective decision (Prajogo, 2016). For constructing an effective decision following tools are to
be followed by the organizations like Apple:
Identifying the decision to be made
Gathering relevant information regarding the decisions
Identifying the alternatives
Weight evidences
Choose from the alternatives
Taking actions
Reviewing decisions and consequences

Decision making tools and techniques :
Decision matrix: It is used to analyze all the factors that can create impact upon the decision
making process, while using a matrix all the factors that effects the decision of the firms are
evaluate manually and effectively. The concept of T chart is used to weighting the decisions .
Decision Tree: It is the graphical structure that is used to analyze each and every option
eventually and very significantly in order to come up with the most effective manner to construct
the decision.
Pareto analysis: This techniques is implemented by the firm, whenever company wants to take
large number of decisions, this also helps in identifying which decision to be made first and
which decision has to be made later.
Conjoint analysis: This method analyze the preferences of the consumers before initiating any
kind of the decisions. This technique revolves round the needs and desires of the consumers in
order to come up with the measure that is best suitable for the organization.
SWOT analysis: This is the best method to analyze the internal and external; factors of the
organization. External factors are the threats and opportunities that occurs within the
organization while on the other hand internal factors are the strength and weaknesses of the
organization. SWOT analysis is used to conduct the overall evaluation of the market on the basis
on its strength, weaknesses, threats and opportunities. These factors helps in analyzing the
measures that can help the organization to overcome the occurring factors that lay stress upon
the working of the organization (Mu, 2017).
PEST analysis: It is used to cover all the relate able business factors of the organization. PEST is
the acronym for the political, economical, social ad technical analysis, it conduct the overall
market study of the business in order to come up with the best decision that can help the
organizations like Apple to sustain their growth and popularity with the competitive market.
The key dynamic forces of any business organization are influenced by its political,
technical, social and economic factors. The business organization is a complex entity and it has
equal involvement of both; threats and opportunities within it. As the competition is increasing,
there is huge pressure upon the business enterprises to incorporate with the desires and
expectations of the customers (Rubinstein, 2017).

CONCLUSION
From the above report it can be concluded that, management is the very important aspect
of any business organisation whether it is small or large. Organisation like Apple handles there
management unit in such an effective manner that it is the core reason behind there huge success,
as it is the one of the top leading industry it is very important to them to identify their
management issues in order to come up with the effective solution. The above report cover
implication of three models (Porters Five Forces, Social Change and Hofstede's cultural
dimension theory model ), in context of Apple. These three mode shows how the organisations
has to handle there key forces that occurs in the environment in order to function the business in
a very effective manner. It has also been seen that, the key dynamic forces of any business
organisation are the forces that effects the working of the organisation.

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Online
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