Strategic Management: Economic Issues Faced by Apple Inc in China

Strategic Management

TABLE OF CONTENTS
Introduction......................................................................................................................................3
Task 1...............................................................................................................................................3
Task 2...............................................................................................................................................3
Internal and external environmental analysis..............................................................................3
SWOT..........................................................................................................................................3
PESTLE.......................................................................................................................................3
Impact of issue on the organization.............................................................................................3
Organizational approach to the positioning in the marketplace..................................................3
Task 3...............................................................................................................................................3
Decision and choices taken to mitigate the current issue............................................................3
Task 4...............................................................................................................................................3
Recommendations and its associated advantages........................................................................3
Conclusion.......................................................................................................................................3
References........................................................................................................................................4

INTRODUCTION
Apple Inc is an international technology company based in America with headquarter in
Cupertino, California. The company is engaged in designing, developing and selling consumer
electronics and computer software along with providing online solutions (Apple, 2019). The
present study is based on the critical analysis and evaluation of the economic issues faced by
Apple Inc in the emerging country that is China. The study will consider the in-depth analysis of
the underlying issues and their impact on the organization. The study will also undertake internal
and external environmental analysis including SWOT and Pestle Of Apple Inc in the Chinese
market. The study will also cover discussion and choices taken by the company to mitigate these
current issues. Based on the analysis, the study will draw appropriate recommendations that will
be advantageous to the company to resolve this issue.
TASK 1
Issue
The CEO of Apple (Tim Cook) revealed two major problems, particularly which resulted in the
sudden move namely:
 Issue 1: Economic weakness in the emerging market that creates an unexpected impact
on Apple Issue 2: Fewer upgrades on iPhone that the corporation failed to anticipate.
There is a steady rise in the price of the newest and strongest Apple product, i.e. iPhone every
year with some models topping at $1,000. Consequently, it has been noted by Bernstein
Research’s Toni Sacconaghi (market analyst) that Apple did not completely attribute to the
slowdown of its sales of iPhone due to the high price tags of smartphones (VANIAN , 2019).
Therefore, there is significant decline share price of the company.

Figure 1: Decline in Apple Share prices and operating margin due to Chinese markets
The big issue is the slowdown of the Chinese economy, and further the issue is intensified by the
trade was among China and America. Majority of the disappointment can be attributed to the
slowing of the Chinese economy. It is stated that over 100% of its revenue of company declined
from the last year could be featured due to the lower demand in China for iPhones, Macs and