Environmental and VRINE Analysis of Apple Inc.

This paper provides an environmental analysis of Apple Inc. including internal and external issues, along with a VRINE analysis of the company's resources. It also evaluates the company's strategy and business operations.

Running head: MANAGEMENT
Management
Name of the Student
Name of the University
Author Note

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Table of Contents
Presentation of the chosen organization:....................................................................................3
Company’s environmental analysis: internal and external issues:.............................................5
Macro- environmental analysis:.............................................................................................5
Micro Environmental:............................................................................................................7
VRINE:................................................................................................................................11
Evaluation:...............................................................................................................................12
Recommendations:...................................................................................................................14
References:...............................................................................................................................16

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Presentation of the chosen organization:
The selected corporation for the paper is Apple Inc. Apple is one of the most reputed
companies operating in the conglomerate industry. The corporation is a public corporation
and is observed to operate in various industries such as the cloud computing, computer
hardware, computer software, digital distribution, Financial Technology, Artificial
Intelligence and most importantly consumer electronics. The corporation was established in
the year 1976 and is recognized as one of the most innovative companies operating in the
business world of 21st century (Apple.com. 2019). The corporation was established by a
combicountry of an American businessman, Steve Jobs, American electronics engineer and
programmer, Steve Wozniak and an American electronics industry worker named as Ronald
Wayne (Apple.com. 2019). The present headquarter of the corporation is observed to be
situated in California. The corporation is seen to operate across the globe with more than 500
operational stores (Apple.com. 2019). The success of the corporation is largely dependent on
the visionary leadership and the brand reputation of Steve Jobs. However, the corporation is
able to conduct a sustainable business even after the death of their greatest leader and that is
evident with the ability of the corporation in increasing their product chain and the offerings
of the services.
The product chain of the corporation is seen to include Macintosh, iPod, iPhone, iPad,
Apple Watch, Apple TV, HomePod, macOS, iOS, iPadOS, watchOS, tvOS, iLife, iWork,
Final Cut Pro, Logic Pro, GarageBand and Shazam Siri (Apple.com. 2019). Along with these
products, the corporation is observed to provide optimum quality services such as the App
Store, Apple Arcade, Apple Card, Apple Music, Beats 1 Apple News+, Apple Pay Cash,
Apple Store, Genius Bar, Apple TV+, iBooks Store, iCloud, iMessage, iTunes Store and Mac
App Store (Apple.com. 2019). The corporation is able to introduce such diversified product

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and service offerings due to the excellent leadership from the part of the current management
tea of the corporation which includes the chairman of the corporation, Arthur D. Levinson,
the chief operating officer of the corporation, Jeff Williams and the chief operating officer of
the corporation, Tim Cook (Apple.com. 2019).
Other than this, the corporation currently employs approximately 132000 number of
employees which increases their ability in developing innovative products and services for
their customers across the globe (Sec.gov. 2019). The excellent service of the employees and
the visionary leadership from the part of the managers of the corporation are observed to be
crucial for the success of the corporation in generating an increased revemue of 265.595
billion US dollars in the year 2018 (Sec.gov. 2019). At the same time, the corporation
increased their operating income to 70.898 billion US dollars along with a net income of
59.531 billion US dollars (Sec.gov. 2019). One of the main success factor for the corporation
is seen to be their ability in structuring and linking various subsidiaries of the corporation
such as the Braeburn Capital, Beats Electronics, FileMaker Inc., Apple Energy LLC, Apple
Sales Intercountryal, Apple Services, Apple Worldwide Video, Anobit and Beddit
(Apple.com. 2019).
The mission statement of the corporation is pretty significant in stating the urge of the
corporation in providing the best user experiences to their customers through the innovative
hardware and software products and services (Sec.gov. 2019). From the mission statement of
the corporation, it is unreasonable that the corporation is dedicated in providing best user
experiences to their customers and that is one of their main value propositions.
The vision statement of the corporation specifies the fact that the corporation believes
that they are on the face of the earth to make innovative products and services and their
objective of developing innovative products and services on continuous basis, is not going to

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change (Sec.gov. 2019). From the vision statement of the corporation, it is visible that the
corporation takes a lot of pride in developing innovative products. At the same time, the
vision statement of the corporation reflects the ability of the corporation in focusing on
innovation and preferring the simplicity over the complex procedures.
Corporation’s environmental analysis: internal and external issues:
Macro- environmental analysis:
Political: The strong democratic set up of the country
and the effective rule of law are main
success factors for the government in
establishing a steady political environment
in the country (Bayar and Aytemiz 2015).
At the same time, the success of the
government in establishing a strong trade
relationship with the major trade based
countries is playing a significant role in
increasing the preferences of desticountry
amongst the majority of the business
organizations. Hence the stable political
situation of the country will help the
corporation in conducting a profitable
business.
Economy: The strength of the economy of the country
is pretty evident with the 2nd position of the
country in the list of GDP (PPP) with a total

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GDP of 20,494,099.85 million US dollars
and the per capita value of it is seen to be
approximately 55681.05 US dollars
(Tradingeconomics.com. 2019). Other than
this, the total GDP (Nominal) of the country
is currently 5,334.8 billion US dollars and
that places the country in the first position
in the list of the total GDP (Nominal)
(Statisticstimes.com. 2019). The per capita
value of the same is roughly 62,517.5 US
dollars (Statisticstimes.com. 2019). Hence it
is evident that the citizens of the country
have the required financial stability for
conducting repetitive purchases.
Social: The human development index of the
country is 0.924 and that signifies the high
per capita income indicators, high literacy
rates in the country and at the same time, it
also shows the higher life span of the
citizens of the country (Hdr.undp.org.
2019).
Technological: The high score in the Human Development
Index is a clear reflection of the fact that the
country experiences a higher literacy rates
and that signifies the improved ability of the

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citizens in handling the technological
advancement and the presence of
technology in the products of the
corporation.
Environmental: The government of the country is seen to be
largely focused in maintaining an
appropriate environmental balance in the
country and the urge of the government is
pretty evident with the efficiency shown by
the Environmental Protection Agency
(Epa.gov 2019).
Legal: Considering the legal aspect, the corporation
is required to align their business operations
in accordance to the labour and employment
legislations such as the Fair Labour
Standards Act (Ofm.wa.gov. 2019),
Immigration and Countryality Act
(Uscis.gov 2019), Occupational Safety and
Health Act (Osha.gov. 2019) and Federal
Employees' Compensation Act (Dol.gov.
2019).
Micro Environmental:
Competitive Rivalry: The corporation is observed to operate in
both countryal and global market in a

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successful manner and that is evident with
the significantly high market share of the
corporation. Considering the statistics of the
market, the revenue of the corporation in the
year 2019 is observed to be US$283,070
million with a year on year increment of
16.9% (Statista.com 2019). Considering the
countryal market, the consumer electronics
market of United States of America is
observed to generate a revenue of
US$74,316 million in the year 2019
(Statista.com 2019). The number of users in
both the markets are observed to increase as
well and that is evident with 1,504.5 million
users for the global consumer electronics
industry and 114.2 million for the countryal
consumer electronics industry (Statista.com
2019). However, the corporation is seen to
face tough competition from the part of the
companies such as Microsoft, Hewlett-
Packard, Samsung and Dell. With a
generated revenue of 125.8 billion US
dollars in the year 2019, Microsoft is able to
increase the intensity of the business
competition in the country (Microsoft.com.

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2019). Other than this, the market share of
Hewlett-Packard is seen to increase in the
mentioned country is seen to increase in a
substantial manner and that is a major
concern for Apple. Having said that,
Samsung is not lagging behind as well and
that is visible with the increment in the
revenue of the corporation to 210.9 billion
US dollars (Samsung.com 2019). Apart
from these companies, Dell is also able to
conduct a significantly profitable business
and that is evident with the generation of
78.7 billion US dollars as revenue in the
year 2018 (Dell.com. 2019).
Bargaining power of the Buyers: Though the selected corporation applies
premium pricing policy for their products,
however there are several companies
operating in the consumer electronics
market of the country with the ability to
apply low pricing for their products. At the
same time, the companies are also observed
to have the expertise in providing optimum
quality products and services to their
customers which forces the corporation to
experience a high bargaining power.

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Bargaining power of the Suppliers: The corporation is seen to experience the
quality supply of the raw materials from the
part of the several suppliers such as 3M
Corporation, AAC Technologies Holdings
Incorporated, Advanced Semiconductor
Engineering Incorporated, Alps Electric
Corporation Limited and Artesyn
Embedded Technologies Incorporated
(3m.com. 2019). Hence the bargaining
power of the suppliers experienced by the
corporation is pretty low.
Threat of New entrants: Though the significant growth of the market
is a major motivator or the new companies
in entering the mentioned market, however,
the bulk investment required for the
infrastructural set up and the high market
share of the market leader organizations
such as the Samsung, Microsoft or Apple, is
able to reduce the threat of substitution to a
significantly low value.
Threat of Substitutions: Considering the excellent ability of the
companies operating in the mentioned
industry in applying the low prices while
maintaining the high quality of the products
and designing in accordance to the

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preferences of the customers, the
corporation is expected to experience a high
threat of substitutions.
VRINE:
Resources Valuable Rare Inimitable Non
Substitutabl
e
Exploitable
Skills and
Competenci
es of the
employees
The corporation
has strong
reputation of
providing quality
and innovative
products and under
such situation, the
value of the
training facilities
of the corporation
in domains such as
Mac Integration
Basics, Apple
Technician or Pro
Apps, is
significant
(Training.apple.co
The
corporation
is observed
to conduct
bulk
investment
for the
developmen
t of the
training
facilities
and the
infrastructu
re and
under such
situation, it
becomes
The
financial
investment
for the
developme
nt of the
mentioned
resource
makes it
inimitable
for other
companies.
The success
of the
training
activities in
improving
the skills of
the
employees
and the
reflection
the skills in
developing
innovative
products,
makes it
non
substitutabl
The urge of
the senior
managers in
influencing
the
employees
to apply
their learnt
skill in the
developme
nt and
design of
the
innovative
products is
a proof of
the

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m. 2019). rare in the
industry.
e. exploitabilit
y of the
mentioned
resource.
Strong
Brand
Recognition
The strong brand
recognition helps
the corporation in
effectively
targeting the
customers with
their innovative
and creative
products, Hence it
is valuable for the
corporation.
The reigns
of Steve
Jobs is able
to provide
such a
brand
recognition
to the
corporation
that is rare
in the
industry
and that is
evident
with the
significant
market
share of the
corporation.
Considerin
g the
market
share,
Apple’s
brand
recognition
is still
unmatched.
The ability
of the brand
recognition
of the
corporation
in
increasing
the loyalty
level of
their
customer
makes it
non
substitutabl
e.
The
corporation
’s lack of
urgency
towards the
occurrences
of the
marketing
and
promotions
clearly state
the strength
and
exploitabilit
y of the
brand that
Apple has.

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Evaluation:
Considering the arenas section of the five level diamond strategy, the product
categories are generally the consumer electronics products along with the hardware and
software products. At the same time, the corporation is inclined towards introducing out of
the box products such as electric cars (Apple.com. 2019). The channels for the corporation is
primarily store outlets of the corporation along with iStorm. The main value proposition of
the corporation is seen to be their ability in providing innovative products to their customers.
The corporation generally targets the customers belonging youth generation and high income
groups.
Considering the vehicle stage of the strategy formation, the corporation is observed to
be inclined towards the internal development and that is evident with the continuous
expansion of product chain of the corporation. Having said that, the corporation also have
considerable amount of preferences towards franchising from the era of Steve Jobs and that
continued under the leadership of Tim Cook as well.
With a detailed focus on the concept of differentiators, it is obvious that the corporate
image of the corporation which largely got developed during the time of Steve Jobs, helps the
corporation in targeting the customers in an efficient manner. The corporation has the
expertise of applying premium pricing for majority of their products. The corporation has
certain limitations in increasing the innovativeness of their products which is evident with the
previous products of the corporation. However, the products of the corporation are considered
as considerably reliable and durable as well. The corporation is seen to be comparatively
slower than that of its market competitors in introducing new products as according to the
claims of the management of the corporation, it investigates the products from all possible
corners for the assessing whether the products are able to deliver the communicated values to
their customers or not.

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Considering the economic logic, the corporation is observed to apply the premium
pricing policy for their proprietary product features (Heracleous 2013). The application of the
premium pricing policy is observed to be a major point of concern for the general customers
in purchasing the products and services of the corporation. Though the corporation is
targeting a particular section of the customers belonging to the high income group, their
pricing strategy is also a major obstacle for them in targeting a larger customer base and
serving their needs in an efficient manner.
With a precise focus on the business operations of the corporation, it is evident that
the success of the corporation is largely dependent on their ability in managing the sequence
of initiatives. The vigorous stages of evaluation for the introduction of the new products are
considered to be significant for the development of the flawless, innovative and unique
products. Hence the effective management of the sequence of initiatives from the part of the
corporation is crucial for their success in conducting sustainable business.
Recommendations:
Under the leadership of Tim Cook, the corporation faces certain needs of restructuring
in their business and they are mentioned below:
The corporation needs to improve the efficiency of their research and development
department as the Chinese companies are observed to have multiple try for copying the
patents and design of the products and services of the corporation.
Though the shareholders of the corporation are observed to be strict about the pricing
strategy of the corporation, however, the application of a comparatively low pricing strategy
will be substantial for the corporation’s success in targeting superior number of customers.
Along with this, the corporation is recommended to improve their ability in managing
the increasing cost of labour in the modern labour and employment market for maintaining

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the sustainability in their business operations and for maintaining the quality of the products
and services of their corporation.
Other than this, the corporation has the necessity to increase the efficiency of their
distribution channels and as the increment in the mobility will be crucial for the corporation
in increasing their market share.

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References:
3m.com. 2019. 3M Science. Applied to Life. 3M United States. [online] Available at:
https://www.3m.com/
Apple.com. 2019. Apple. [online] Available at: https://www.apple.com/
Bayar, Y. and Aytemiz, L., 2015. Impact of economic freedom, political stability and
economic growth in the USA on emerging Asian economies. Актуальні проблеми
економіки, (6), pp.62-73.
Dell.com. 2019. Dell United Kingdom Official Site | Dell UK. [online] Available at:
https://www.dell.com
Dol.gov. 2019. Federal Employees' Compensation Act - Division of Federal Employees'
Compensation (DFEC) - Office of Workers' Compensation Programs (OWCP) - U.S.
Department of Labor. [online] Available at:
https://www.dol.gov/owcp/dfec/regs/statutes/feca.htm
Epa.gov 2019. US EPA. [online] Available at: https://www.epa.gov/
Hdr.undp.org. 2019. [online] Available at:
http://hdr.undp.org/sites/all/themes/hdr_theme/country-notes/USA.pdf
Heracleous, L., 2013. Quantum strategy at apple inc. Organizational Dynamics, 42(2), pp.92-
99.
Microsoft.com. 2019. Microsoft - Official Home Page. [online] Available at:
https://www.microsoft.com/en-in/

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Ofm.wa.gov. 2019. Fair Labor Standards Act (FLSA) | Office of Financial Management.
[online] Available at: https://ofm.wa.gov/state-human-resources/compensation-job-classes/
compensation-administration/fair-labor-standards-act-flsa
Osha.gov. 2019. OSH Act of 1970 | Occupational Safety and Health Administration. [online]
Available at: https://www.osha.gov/laws-regs/oshact/completeoshact
Samsung.com 2019. Samsung. uk. [online] Available at: https://www.samsung.com
Sec.gov. 2019. Document. [online] Available at:
https://www.sec.gov/Archives/edgar/data/320193/000032019318000145/a10-
k20189292018.htm
Statista.com 2019. Consumer Electronics - United States | Statista Market Forecast. [online]
Available at: https://www.statista.com/outlook/251/109/consumer-electronics/united-
states#market-globalRevenue
Statista.com 2019. Consumer Electronics - worldwide | Statista Market Forecast. [online]
Available at:
https://www.statista.com/outlook/251/100/consumer-electronics/worldwide#market-
globalRevenue
Statisticstimes.com. 2019. Countries by GDP (nominal) per capita 2018 -
StatisticsTimes.com. [online] Available at: http://statisticstimes.com/economy/countries-by-
gdp-capita.php
Tradingeconomics.com. 2019. United States GDP per capita PPP | 2019 | Data | Chart |
Calendar | Forecast. [online] Available at: https://tradingeconomics.com/united-states/gdp-
per-capita-ppp
Training.apple.com. 2019. Home Page. [online] Available at: https://training.apple.com/

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Uscis.gov 2019. Immigration and Nationality Act. [online] Available at:
https://www.uscis.gov/legal-resources/immigration-and-nationality -act