Strategic Management Analysis of Apple Inc

The report helps in the examination of the internal and external environmental study of the Apple Inc Company. Furthermore, the situation of the industry in which Apple Inc is existing along with the good and ugly part in the company has to be analyzed effectively. The situation of the company is required to be analyzed by performing the Porter’s Five Forces Analysis which will be providing a brief overview on the analysis whether the company will be staying relevant in the current year ore not.

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

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Executive Summary
The report has helped in analyzing the various types of internal along with external environmental
analysis of Apple Inc Company. The entire SWOT analysis along with the key competitors has been
identified in the market which helped in managing the different effectiveness in an efficient manner.
Furthermore, the value chain along with Porter’s Five Forces analysis has been performed which
assisted in managing the effectiveness of Apple Inc.

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Table of Contents
Introduction...........................................................................................................................................3
Overview of Apple Inc..........................................................................................................................3
SWOT Analysis of Apple Inc................................................................................................................3
Identification of the Situation of Industry and Key Players...................................................................5
The Good, The Bad and The Ugly in Apple Inc....................................................................................6
Value Chain of Apple Inc......................................................................................................................7
Relevant Activities in Value Chain of Apple Inc...................................................................................8
Situation of Company in Performing Porter’s Five Forces..................................................................10
Reasons of Relevancy of Apple Inc in Future......................................................................................10
Conclusion...........................................................................................................................................11
References...........................................................................................................................................12

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Introduction
The report helps in the examination of the internal and external environmental study of the
Apple Inc Company. Furthermore, the situation of the industry in which Apple Inc is existing along
with the good and ugly part in the company has to be analysed effectively. The situation of the
company is required to be analysed by performing the Porter’s Five Forces Analysis which will be
providing a brief overview on the analysis whether the company will be staying relevant in the current
year ore not.
Overview of Apple Inc
Apple Inc is one of the American international technology Company is headquartered in
Cupertino which is based in California (Apple., 2018). The organization was founded in the year 1976
and founders of the company are inclusive of Steve Jobs, Steve Wozniak and Ronald Wayne. The
company is the world’s largest information technology organization in terms of the revenue. The
revenue which has been earned by the organization is US$229.234 billion till the year 2017 and the
number of employees working in the organization is 123000.
SWOT Analysis of Apple Inc
Strengths
 Innovative products are key strengths of Apple Inc as company has invented the different
kinds of hit products such as iPad and iPod which will be helpful in meeting the different
individual desires (Rothaermel, 2015)
 The distribution network of Appleis the other strength of the company in which Apple has
more than 470 of the own stores with their presence in more than 17 countries. There are
different online channels along with the premium retail stores wherein Apple tries to sell the
different products through these channels and gain more productivity (Hill, Jones& Schilling,
2014).

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Weaknesses
 Incompatibility is the first weakness which is being faced by Apple wherein this can be
noticed that many products are incompatible with the different software products along with
accessories of the third party (Bettis et al., 2015). Dependency of the few products is the other aspect which can be seen that Apple has only
seven to eight products in the portfolio in comparison to the other products which are the
main competitors of Apple are Microsoft and Google. Therefore, the dependence of Apple on
the different products is very high in nature and this is essential in nature in handling the
dependency of Apple (Robson, 2015).
Opportunities
 The technological advancementsare one of the major opportunities of Apple wherein the
company can come up with the more advanced versions of iPhone and iPad along with
Iwatches in the coming years (Ginter, Duncan & Swayne, 2018).
 The growing market is one of the other opportunities for Apple Inc and this will help Apple
in increasing the consumption of the premium brands such as Apple. The Apple Cars is the
other aspect which will be launching in the year 2020 and this can help in improving the
overall efficiency of the business (Morschett,Schramm-Klein &Zentes, 2015)
Threats
 Laptop Competition is the threat which is being faced by Apple Inc Company and this affects
the overall profitability of Apple Company. MacBook is best and there are different other
competitors for example Dell along with Sony and Lenovo. The rivalry is ever increasing in
nature and Apple is facing stiff competition in the market as well (Morden, 2016). The market penetration in the smartphones is the major threat which is being faced by Apple
from the other smartphone companies. The android is eating the market share in a huge and
rapid manner and more than 47.5% of the market share, on the other hand more than 42% of

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the market share is being adopted by Apple and Apple is required to be ready for the
smartphone competition (Trigeorgis&Reuer, 2017).
Identification of the Situation of Industry and Key Players
With the overall analysis of gadgets industry, this can be analysed that external environment
had created both opportunities and threats for the different organizations. The tablets and the different
other gadgets have become an effective alternative to laptops and the global growth rate has increased
to large extent. The growth rate has become steady in the global gadgets industry wherein the sales
have increased by more than 5% in 2016 to more than $87.4 billion (Christopher, 2016). Furthermore,
in the present scenario the different consumers are interested more towards the different sleek designs
and more user-friendly model models which is essential in nature to attract the different customers.
The different key players of Apple in the entire competitive market are inclusive of Samsung
and Microsoft, Huawei and Google. The below diagram helps in analysing the key players in the
market and who are the major competitors of Apple as well (Ferlie et al., 2016).
Figure 1: Key Rivals of Apple Inc
(Source: Hill, 2017)
From the above diagram, this can be analysed that the different android phones along with the
other mobile companies tried to gain a huge market share in the organization in an efficient manner.

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Apple has tried to gain a huge market share; however, the company has not been able to compete with
the Android market and this has affected the sales of the company in a negative manner as well
(Steinbach et al., 2017). Furthermore, Dell and HP are the major competitors and it appears that the
company has good perceive of the market and implement of the market strategy and this has affected
the brand image of Apple Inc Company.
The Good, The Bad and The Ugly in Apple Inc
Good- Apple Inc expects the growth in the revenue and leadership of Steve Jobs
Firstly, the guidance calls for the revenue in the range of more than $76 billion to the $78
billion and this has helped in gaining their solid achievement and this has helped Apple Inc in
managing the growth and in the last moment, Apple Inc tried to gain the sales of more than $75.9
billion and the investors of Apple were grateful for such growth as well ( Hill, 2017). Furthermore,the
leadership style of Steve Jobs was not so formal and this has helped in the overall growth of the firm
in a positive manner.
Bad- The gross margin should be better and expectations from employees
The bad aspect in Apple Inc is that the higher officials of Apple are experiencing more level
of gross margin which will be more 38% to 38.5%. Moreover, this can be seen that the company
officials expect a lot from the employees and there is huge work pressure which is being created on
the different employees in a negative manner (Hill, 2017).
Ugly- The units of iPhone can potentially decline and unethical behaviour
In Apple Inc Company, this can be seen that there is decline in the units of iPhone in the
recent times wherein this can be seen that the behaviour of the officials of Apple is unethical in nature
and this has affected the morale of the different employees in an ineffective manner. This has been
seen that there is no such motivation which is being provided to the employees and this has decreased
the overall productivity of the organization in a negative manner as well. Furthermore, the unit of the

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iPhone will fall short as the market tends to focus mainly on the unit sales of iPhone and this could be
ugly if this will fall short and this will affect the overall sales of the organization as well ( Bettis et al.,
2015).
Value Chain of Apple Inc
Apple has tried in focusing mainly on different kinds of different activities which is inclusive
of the different primary and secondary activities of Apple which will be helpful in managing the
effectiveness.
Figure 2: Value Chain Analysis of Apple Inc
(Source: Ethiraj, Gambardella &Helfat, 2016)
Relevant Activities in Value Chain of Apple Inc
Primary Activities
Inbound Logistics: Apple has large supply chain while obtaining the different raw materials
and most of the suppliers of Apple is located at Asia which is China and Japan. The major raw

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materials include 3M and Foxconn and Apple tries enjoying high power of bargaining with respect to
the suppliers.
Operations: Apple manufacturing is basically based in various locations and nations and
Apple has engaged Indian government in talks and labour costs have been lower in Asian Nations.
Furthermore, the labour costs have been lowered in Asian nations and they have tried to reduce the
manufacturing costs for Apple as well ((Ethiraj, Gambardella&Helfat, 2016).
Outbound Logistics: Apple has tried to manage large distribution network which is consists
of bot direct and indirect channels. There are different retail stores along with other online stores
wherein the company has tried in to manage a large channel for distribution.
Products and Services: Apple tries to provide complete after sales service and sustain to the
different clients. There are different products from Apple within 90 days complementary support and
one-year warranty (Christopher, 2016).
Marketing and Sales: Apple is one of the main famous brands which is known for quality,
design and technological kind of innovations. There are different kinds of websites which help Apple
in showcasing their products and they can check their order online as well.
Support Activities
Research and Development: The Company spends a great deal on the different kinds of
research and development wherein the designs of the products are unique in nature. The company has
spent more than $10 billion on R&D and this will be helpful in increasing their focus on the different
development of products (Christopher, 2016).
Human Resource Management: Apple tries to focus mainly on the different kinds of hiring
and paying well to the different employees.
Infrastructure of Firm: Apple’s infrastructure has played a vital role in success and the
different financial resources and culture plays vital role in betterment of the firms.

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Procurement: Apple has tried in managing excellent kind of relationship with the different
suppliers and the suppliers try to provide the workers with safe kind of conditions of working.
Situation of Company in Performing Porter’s Five Forces
Reasons of Relevancy of Apple Inc in Future (Recommendations)
Apple has a particular kind of status and there is always a struggle in Apple Company in order
to launch the new products. There are different recommendations which can be provided to Apple in
order to become more innovative and include the ethical value and culture in their organization which
will be beneficial for the overall success of the firm which are as follows:
 To be the king of high-tech of Wall-Street by innovating their new technology and
introduction of new version such as 64 or more gigs memory which will be smarter and
powerful camera lens technology in order to increase the share in the market effectively

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 Furthermore, the market share will be increased till 2020 after the launch of Apple car and
this will help in gaining more competitive advantage by introducing the innovative culture at
Apple stores all over the world which will be providing huge opportunity to build band
reputation and loyalty.
 There should be introduction of proper ethical culture in the organization which will be
beneficial for the overall success of the firm in an effective manner. The ethics should be
taken into consideration the health and safety of the employees working in the organization
which will be helpful in improving the overall organizational culture of the organization
effectively
Conclusion
Therefore, this can be concluded that Apple Inc has different internal and external threats
along with different kinds of opportunities which will be beneficial for the success for the firm.
Furthermore, the bad and ugly are required to be analysed effectively and remove the different issues
which will be beneficial for the growth of the firm. The value chain of Apple has assisted in managing
the various primary along with secondary activities in an efficient manner.

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References
Apple. (2018). Retrieved from https://www.apple.com/
Bettis, R. A., Gambardella, A., Helfat, C., & Mitchell, W. (2015). Qualitative empirical research in
strategic management. Strategic Management Journal, 36(5), 637-639.
Christopher, M. (2016). Logistics & supply chain management. Pearson UK.
Ethiraj, S. K., Gambardella, A., &Helfat, C. E. (2016). Replication in strategic management. Strategic
Management Journal, 37(11), 2191-2192.
Ferlie, E., Crilly, T., Jashapara, A., Trenholm, S., Peckham, A., & Currie, G. (2016). Strategic
management in the healthcare sector: the debate about the resource-based view flourishes in
response to recent commentaries. International journal of health policy and
management, 5(2), 145.
Ginter, P. M., Duncan, W. J., & Swayne, L. E. (2018). The strategic management of health care
organizations. John Wiley & Sons.
Hill, C. W., Jones, G. R., & Schilling, M. A. (2014). Strategic management: theory: an integrated
approach. Cengage Learning.
Hill, T. (2017). Manufacturing strategy: the strategic management of the manufacturing function.
Macmillan International Higher Education.
Höglund, L., Holmgren Caicedo, M., &Mårtensson, M. (2018). A balance of strategic management
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Lasserre, P. (2017). Global strategic management. Macmillan International Higher Education.
Morden, T. (2016). Principles of strategic management. Routledge.

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Morschett, D., Schramm-Klein, H., &Zentes, J. (2015). Strategic international management (pp. 978-
3658078836). Springer.
Robson, W. (2015). Strategic management and information systems. Pearson Higher Ed.
Rothaermel, F. T. (2015). Strategic management. McGraw-Hill Education.
Steinbach, A. L., Holcomb, T. R., Holmes Jr, R. M., Devers, C. E., & Cannella Jr, A. A. (2017). Top
management team incentive heterogeneity, strategic investment behavior, and performance: A
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Trigeorgis, L., &Reuer, J. J. (2017). Real options theory in strategic management. Strategic
Management Journal, 38(1), 42-63.