Global Business and Strategy | Apple Inc.

Running Head: STRATEGIC ANALYSIS
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Global Business and Strategy
Strategic Management: Apple Inc.
(Student Details: )
12/28/2019

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Contents
1.0 Introduction.....................................................................................................................2
2.0 Brief Background to Case Study Organisation....................................................................2
3.0 Internal and External Analysis.............................................................................................3
Internal Analysis....................................................................................................................4
External Analysis...................................................................................................................5
Macroeconomics Environment: PEST Analysis................................................................5
Industry Analysis: Porter’s Five Forces Analysis..............................................................6
Competitors’ analysis.........................................................................................................7
4.0 Identification of Company’s Sustainable Competitive Advantage......................................7
5.0 Strategic Recommendations and Implementation Issues.....................................................9
Corporate Strategy.................................................................................................................9
Differentiation..................................................................................................................10
Value creation by cost leadership and focus....................................................................10
Ansoff Matrix...................................................................................................................10
6.0 Conclusion..........................................................................................................................12
References................................................................................................................................13

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1.0 Introduction
This management report is focused on a strategic analysis of the well-known global firm
Apple Inc. In this paper, all possible aspects of an effective management approach will be
discussed in the context of the chosen firm. In general, strategic management (SM) is a
process through which a company drafts, evaluates, as well as implements cross-functional
decisions which allow the firm to attain their long-time goals. As we know Apple Inc.
(hereinafter referred to Apple) has successfully managed to generate substantial value into the
greatly competitive global industry, while innovating as well as forging a leading path
different from their largest competitors worldwide (Glenn, 2019). In this way, with the help
of this report, an introduction of the Apple will be done while analysing internal and external
factors of the organization. In addition, the discussion will identify Apple’s sustainable
competitive advantage while utilising the VRIO framework (Apple Inc. , 2015). Besides, a
conclusion with strategic recommendations based on conducted internal and external analysis
will be provided in the later section.
2.0 Brief Background to Case Study Organisation
Apple is the global American company that is known for producing smartphones, computer
hardware and software, personal computers, laptops, smart gadgets and useful consumer
electronic products (Berman, 2019). The key products offered by Apple are iPod, iPhone,
Macintosh and iPad. The mission of the company is to define the future of mobile-media as
well as function and computing devices with the reinvention of the iPad. Besides, the vision
of Apple suggests that the company believes in deep collaboration as well as a cross-
pollination of their people, which enable extra-ordinary innovation (Apple Inc. , 2015). The
thoughts and capabilities led the owner of the company to start the business. The owner
believed that we should not settle for anything less than excellence and we must have the
courage to change the society with modern technologies (Apple, 2019).
Currently, Apple is creating innovative and powerful solutions for pushing humanity forward
while taking relentless innovation. Apple is resolving issues of the societies without
consuming precious natural resources from the planet. Throughout 2019, Apple Inc.’s net
sales from their direct as well as indirect distribution channels responsible for 31% and 69%,

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respectively, of their net sales (BBC, 2019). The current data for explaining the present
situation of the company is presented as below:
Source: (Morning Star, 2019)

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3.0 Internal and External Analysis
Internal Analysis
SWOT analysis
The above table is clearly showing the strengths, threats, weaknesses, and opportunities of the
chosen company which can be further explained as follows:
Strengths
 Consumer trustworthiness and strong market position act as the key strengths of the
company
 Besides, Apple is having a wide variety of products, applications, and software, all of
which are inter-connected and thereby manage each other (Woodruff, 2019).
 Apple has been elected as the most pioneering company all across the globe many
times in the past.
 Apple is the most valuable brand having a decent brand value
 It has been found that Apple is well-known for their high-quality consumer
experiences as the company offer great products and services with eligible staff
increasing Apple’s brand awareness (Nicolás Marín Ximénez & Sanz, 2014).

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Weaknesses
 High price and budget
 Strong market and competitors worldwide
 Sometimes, Apple has been blamed by the rest of the companies for disobeying the
patents which ultimately damage the company’s reputation within the modern
business environment
 The loss of Steve Jobs has been the biggest loss for the chosen firm (Berman, 2019).
Threats
 The rapid change in recent technologies can be a huge threat to the business growth of
Apple.
 Tax changes in the USA may affect the growth and development of the company
 Modified or increased prices from the suppliers of the company can be a threat to the
company’s growth
 As we know, Android OS is the major competitor of Apple presently. Hence
supremacy of Apple iOS is clearly threatened by the Android OS (Berman, 2019).
Opportunities
 Increased demand for iPad mini and iPad within the tablet market will definitely
enhance the market-share of the company. Hence, the company can use it as a
competitive advantage.
 As we know, tablet and smartphone markets are constantly increasing which is an
opportunity for the company in order to expand market share
 Increased development of mobile advertising is again a business opportunity
 Apple can easily enlarge their services with the help of cloud-based services i.e.
iCloud and other software (Berman, 2019).
External Analysis
Macroeconomics Environment: PEST Analysis
Political Analysis
Based on the analysis, Apple has been exposed to so many political barriers because of the
increased number of contract suppliers worldwide. In this way, the political insurgency is a

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clear threat to Apple Inc. In this way, it can be said that American environmental laws, as
well as tough labour laws, are making Apple’s competition tough day-by-day (Glenn, 2019).
Economic Analysis
In the past, Apple faced the consequences of fluctuated economics when global economies
such as Europe, Japan and America faced a recession (Hamilton & Webster, 2018). In this
way, economic analysis of the financial year 2012-13 is suggesting that Apple has always
been affected by stringing dollars as it affected Apple product prices, transportation costs and
profit margins as well (Harrison, 2014).
Social Analysis
It has been found that Apple Inc. has been continuously making a series of changes into their
products for sustaining as well as fulfilling whatever their customers expect (Munoz, 2018).
For doing so, the company has also been making so many acquisitions like Topsy, Embark
and Prime Sense along with so many alliances like Phillips, Motorola, Sony and many more
(Harrison, 2014). In this way, being social always helped the company and one of the biggest
examples is that sales of Apple products have been hiked by a decent percentage during 2013
in India.
Technological Analysis
It is well-aware that technology always affects the company growth and development. In this
context, Apple has always been a trendsetter in the field of the consumer electronics business.
In this way, technological analysis is suggesting that information technology has made Apple
have an aggressive philosophy on creativity and innovation (MacIntosh & O'Gorman, 2015).

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Industry Analysis: Porter’s Five Forces Analysis
Here, the rivalry among all of the competing sellers in the modern market is very high for
Apple. Hence while looking at the intensely competitive environment, Apple should enhance
and hike their investment into areas such as software, computer and mobile phones (Forbes,
2019).
Potential entry of new competitors: (Low)
The above factor of Porter’s five forces is suggesting that reason like high switching cost,
patents and copyrights are highly contributing towards low threats from new competitors
(Davies, 2016).
In addition, in the case of Apple, the substitute product pressure is high moderate. In this
context, a positive aspect is that Apple owns iTunes, app store and iCloud.
On the other hand, the power of suppliers for Apple Inc. is low moderate as the company is
having a unique capability regarding manufacturing products and services. However, the
company buys in big quantity and they had diversified supplier numbers (Forbes, 2019).

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In the case of the power of customers, the value of the bargaining power of consumers is low.
It is because the company often enjoys their strong image of being the trendsetter, innovator,
key investor, quality continuer and a big investor in R&D. Thus, it helps the company to
retain their current customers effectively (Johnson et al., 2017).
Competitors’ analysis
Source: (Harrison, 2014)
4.0 Identification of Company’s Sustainable Competitive Advantage
In this context, identification of Apple’s sustainable competitive advantage can easily be
explained and explored with the VRIO framework (Myers & Fellow, 2014). As we know,
Apple Inc. his having a history of success in the consumer electronics market as well as
computer technology despite so many challenges in the evolving global business
environment. In VRIO analysis, all the performance records will reveal Apple’s utilisation of
their core competencies. In the case of Apple, when the VRIO analysis model evaluated the
value, rarity, imitability, as well as organization of the company’s business, then sustainable

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competitive advantages, has been identified (Lynch, 2015). It has been observed that Apple
has always exploited their core competencies for achieving long-term competitive advantages
in contrast to their aggressive competitors (Kane, 2014). Moreover, the company’s strategic
planning and objectives are more focused on all the business development areas where
Apple’s competitors are weak. While talking about the VRIO analysis of Apple,
organizational managers can also reach the most efficient courses of action for further
strengthening the business on the basis of core competencies as well as sustainable
competitive advantages. Here, sustainable competitive advantages need to satisfy all of the 4
key VRIO variables. In this way, the VRIO analysis of Apple can be understood with the help
of the following table. Here, this table is representing the capabilities and resources of Apple
Inc. Besides, all of the factors in this table are evaluated on the basis of VRIO variables
(Keillor, 2013). Most importantly, sustainable competitive advantages of Apple can be seen
as those core competencies including capabilities and resources which have checkmarks for
all of the VRIO variables.
Source: (Glenn, 2019)
As per the VRIO analysis, a total of six resources, as well as capabilities, have been identified
categorized into two categories such as Apple’s sustainable or long-term competitive
advantages and non-core competencies (Heinberg et al., 2017). For example, Apple’s
international brand is a core competency that is valuable, rare, difficult to imitate and the
business is effectively organized. In this way, the global brand of Apple is a sustainable

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competitive advantage that can be utilised as a key sustainable competitive strength. In
addition to that, Apple has their systems set up for quick innovation; hence it is a crucial
success factor for business development. Apart from this, the VRIO analysis of Apple with
the following table has identified the eco-system of complementary products like one of the
core competencies. Thus, Apple systems’ set-up for rapid innovation is again a sustainable
competitive advantage. Furthermore, the eco-system of complementary products is a core
competency of Apple as it is valuable, rare, difficult to imitate and organized. Moreover,
other core competencies like artificial intelligence capabilities, access to user information and
global distribution as well as sales network are the sustainable competitive advantages in
relation to Apple Inc.
5.0 Strategic Recommendations and Implementation Issues
Corporate Strategy
Based on the above analysis, there are some strategic recommendations that can be used for
future growth while identifying the viability of a business or corporate strategy for the
company. As we know, Apple’s operations are presently focused on consumer electronics as
well as digital products (Apple, 2019). This is the reason that these two are the key revenue
sources. However, Apple’s strategic plans contain many opportunities for developing the
business into the rest of the international industries or markets. For instance, artificial
intelligence (AI) and robotics markets are typically attaining ground. Moreover, the
autonomous, as well as self-driving automobile markets, are getting popularity and
importance in this era. In this way, in-depth analysis is indicating that the aforementioned
opportunities need the company Apple to use their core as well as sustainable competitive
advantages (Apple Inc. , 2015). For doing this, these core competitive advantages have been
identified in the VRIO analysis in order to strategically position the company’s business for
offering techno-advanced products. Based on Apple’s present situation it has been found that
strategies used by Apple Inc. are as follows:
Differentiation
The chosen company is presently using their differentiation strategy while presenting an
extraordinary design of their products, quality products and personalized services. In this
context, at Apple, easiness of the product and services makes the target market fluctuating
through to proficient users (Kane, 2014).

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Value creation by cost leadership and focus
In order to reduce operating costs, the chosen company has outsourced their production to
third-party from broad economies-of-scale. For example, Apple has outsourced the company
OEM which stands for Original Equipment Manufacturers (Myers & Fellow, 2014).
Ansoff Matrix
Source: (Nicolás Marín Ximénez & Sanz, 2014)
Strategic Recommendations
In this way, based on the above analysis, strategic recommendations are found as follows:
 The company should lower the products’ cost as well as maintain similar quality
standards so that long-term business advantages can be leveraged (Apple, 2019).
 Apple should form an increased number of joint-ventures for better knowledge as well
as resources management.
 Apple can have more retail stores for easy access all over the world
 Apple should foster continuous innovation to expand their business globally
 In addition, the company must not compromise on the budget for quality

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 Apple should launch and manufacture their products based on their individual
requirements
 It is recommended that for the chosen firm Apple, they should use the cost
minimization strategy for working on price minimization.
 Moreover, the company can also use Blues Ocean strategy in favour of the profit
maximization goal of the company.
 Apart from this, Apple should also decrease their future threats with the help of
increased investments.
 It has been analysed that Apple should pay more focus to global emerging markets
such as India, China and many more, which are n occupied by their key competitors.
 It has been analysed that there is a lack of communication as well as valuing
similarities between management and investors of the company by which they had
lost an enormous portion of their market capitalization. In this way, Apple should
improve their communications with their investors and suppliers.
 Moreover, Apple needs to broaden their board of directors for further improving
corporate governance.
 Apple should always leverage their close OEM partnerships as well as an internal
knack for usability and design for developing an innovative device that can fit into
Apple’s unique system. In addition to that, Apple should use applications to bridge
the gap between consumers’ mobile phones and personal computers.
 In addition to that, the company should be committed towards their social
responsibilities more than just written words
Therefore, Apple Inc.’s generic strategy as well as rigorous growth strategies can be directly
related to the organization’s strategies within pricing, marketing, and rest areas of the global
business. In this context, some issues during the implementation of such strategic
recommendations at Apple have been identified as follows:
1. Battles with the Qualcomm
2. Technology challenges
3. Navigating the trade uncertainty
4. Leadership challenges
5. Meeting iPhone unit sales anticipations
6. Selling investors over the story of the service

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7. Competitors related challenges
8. Planning related to the arrival of 5G
9. Economy challenges (Davies, 2016).
10. The declining market of the smartphones
6.0 Conclusion
In whole, this report has successfully researched the global market position and business
analysis of the Apple Inc. It has been found that the company is successful while selling their
products as well as services and hence had the highest customer-satisfaction-ratio throughout
their business journey. Some issues related to strategic implementation have been identified.
The analysis and report have found that Apple Inc. is doing excellent business and growth
within modern markets while overcoming all possible barriers and challenges of the
technological era. However, so many global customers are unable to buy iPhone and other
Apple products due to higher prices which need to be addressed by the company. Besides,
VRIO analysis has resulted in the company’s sustainable competitive advantages with which
Apple can further convert their non-core competencies into core competencies effectively and
quickly. In a nutshell, is an emerging tech company, Apple is continuously facing headwinds
which might suppress their buzz and thereby momentum, in the near future.

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