Strategic Management Plan for Apple: Analysis of Macro Environment, Internal Capabilities, and Formulation of Strategic Planning

This report analyzes the macro environment of Apple and its impact on the business strategy of the company. In addition to this, the internal strengths and weaknesses of the company are assessed by usage of suitable frameworks. Strategic planning for Apple is formulated in this report by usage of suitable concepts and models.

Strategic
management
plan

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
TASK 1............................................................................................................................................1
P1 Application of appropriate frameworks to evaluate the impact of Macro environment on
the business strategy of Apple ....................................................................................................1
TASK 2............................................................................................................................................5
P2 Critical analysis of internal capabilities of Apple by using suitable frameworks to assess
strengths or weaknesses of the company ...................................................................................5
TASK 3............................................................................................................................................6
P3 Application of Porter's five forces analysis on Apple ...........................................................6
TASK 4............................................................................................................................................7
P4 Formulation of strategic planning for Apple by using suitable frameworks, concepts and
models ........................................................................................................................................7
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Developing a suitable business strategy for deciding the future direction of the company
involves usage of various frameworks and models. These models are used to understand the
internal and external environment of the company and determine the most profitable strategy for
future success of the company. Apple is the selected organization for this report. It is a American
technology company and is considered one of the main players in the global technology industry.
Apple was founded in the year 1976 and the computer products of the firm gains huge success.
Currently the firm offers wide range of products and services in 140 international markets with
515 stores. The company is worth approximately £1.65 trillion which is more than the whole
FTSE Index (Apple is now worth more than the entire FTESE, 2021). This report analyses the
macro environment of Apple and its impact on the business strategy of the company. In addition
to this the internal strengths and weaknesses of the company are assessed by usage of suitable
frameworks. Porter's five forces framework is also applied in context of Apple in this report.
Besides this, strategic planing for Apple is formulated in this report by usage of suitable concepts
and models.
MAIN BODY
TASK 1
P1 Application of appropriate frameworks to evaluate the impact of Macro environment on the
business strategy of Apple
Business strategy is defined as the competitive actions and proceedings which are
undertaken by the company to build strong consumer base, compete effectively and enhance
performance of the company (Pattuglia and Amoroso, 2019). The business strategy of the
company includes objective, mission vision of the firm which guides decision making so that
business objectives can be attained successfully. The Business strategy of Apple includes two
element which are explained below:
 Production Differentiation: This strategy focuses on influencing consumers to purchase
of the products of the company over rival firms. Apple utilized this strategy by providing
consumers wide range of products which are easy to use and relate to different
consumers segments. iTunes Music store was created by Apple after collaborating with
major international music companies. The firm was able to generate economic value wit
1

this strategy and build brand image of innovator. This depicts that the product
differentiation strategy of the the respective company included the elements of product
features, product mix, brand image and collaboration with other firms. This strategy was
able to help Apple reduce competitive rivalry as consumers became more interested in
the differentiated products of the firm instead of rival products. Strategic Alliances: Forming strategic alliance wit other firms is also beneficial strategy
to gain competitive advantage as it helps pool valuable resources to provide consumers
innovative solutions (Dasgupta, M., 2018). Apple was able to identify the potential of
strong strategic alliances and used it in the business strategy of the company. The major
strategic alliances of Apple are with IBM, Deolitte and Accenture. These strategic
alliances help Apple build innovative products and services and maintain strong position
in their industry.
Vision statement of Apple: The vision of Apple is to “ to make the best products on earth and
leave the world better than we found it”.
Mission statement of Apple: The mission of Apple is to “to bring the best personal computing
products and support to students, educators, designers, scientists, engineers, business persons and
consumers in over 140 countries all over the globe”.
PESTEL analysis of Apple
(Source: Scanning the Environment: PESTEL Analysis, 2021)
2
Illustration 1: Scanning the Environment: PESTEL Analysis, 2021.

 Political Factors: This element of the PESTEL analysis looks at political environment
affecting the company (Fozer and et. al., 2017). Apple is able to produce computing and
mobile products at low cost by moving most of its manufacturing activities in China. The
trade war between US and China has damaged the political relations between the two
countries. Apart from this returning political stability between EU and UK also affects
Apple as the company has large number of consumers in both the regions. These political
factors affect the business strategy of Apple.
Positive Factor: The increase instability of EU and UK political relations has positive impact on
business strategy of UK. This is because the firm will not face barriers in providing consumers
from both the regions the different products and launching new initiatives products as per
product differentiation strategy.
Negative Factor: Apple will be naggingly affected with increasing political tension between
China and UK because it will increase cost of the products offered by the firm. This will impact
product differentiation strategy of the company as it will limit the number of products which are
affordable for middle income consumers in various markets of the company. Economical Factor: The global economic condition is poor because of the pandemic
(Jiang, 2020). The India Market which is the largest smartphone market in the world is
quickly recovering from economic damage of the pandemic. Business strategy of Apple
is affected by these economical factors.
Positive Factor: The economic growth of Indian market is beneficial for business strategy for the
company as the wide range of smart products of the company will be purchased by Indian
consumers.
Negative Factor: Some counties are slowly recovering from the global economic downturn. The
strategic alliances of Apple are negatively affected by this as it affects growth and profitability of
every strategic ally. Social Factors: Increasing digitation and urbanization has increased the demand for
digital computing and mobile devices such as smartphones (Fan and Yang, 2020). Apart
from this manufacturing in China have increased anti-apple sentiments on an
international scale.
3

Positive Factor: The increasing demand of digital products by consumers all over the glee is
advantageous for the product differentiation strategy of Apple as the company has crated wide
range of innovative digital solutions and products.
Negative Factor: The anti-Apple sentiments surrounding the company negatively impact the
strategic alliance formed by the company. This is because strategic allies of the firm may not
want to collaborate with company which has negative brand image. Technological Factors: New international and regional business firms have improved
their technological capabilities in offering similar products and services to Apple.
International companies such as Huawie, Xiaomi and Sony have been able to develop
similar innovative products to Apple. Apart from this the growing demand for cloud
technologies also affects the business strategy of the company.
Positive Factor: Apple has invested in developing innovative cloud computing solutions for
consumers such as iCloud because of the Product differentiation strategy. This can help the
company exploit the rise in demand of cloud computing technology. .
Negative Factor: The negative impact of the technological factor of rival firms developing
similar terminologies to Apple is that it can lower the profitability of the company. This can
lower investment in developing innovative solutions and maintaining strategic alliance with
other organizations. Environmental Factors: This factor looks at the impact of issues related to sustainability
and environment on the firm (Zahari and Romli, 2019). The growing trend of creating
energy efficient products and increasing the sustainability of the company to lower
environmental damage impacts Apple.
Positive Factor: The positive impact of this factor on Apple is that the company will be able to
leverage its strategic alliances to develop innovative energy efficient solutions for consumers.
Negative Factor: The demand for sustainability negatively affects Apple. This is because
increasing organizational efficiency requires large amount of investment which can reduce the
capability of the company to produce wide range of innovative products. Legal Factors: The increasing concern of governments all over the globe related to the
privacy concerns of consumers affect digital firms (Makulilo, 2021). This is because
many of the Apple products such as iCloud store private consumer data. In addition to
4

this, cyber-crime is also increased in the recent years and legislation related to stopping
cyber-crime has been introduced by governments.
Positive Factor: The respective company will be able to provide high security smartphones and
other digital products and services because of the product differentiation strategy of the
company. This means the legal factor of cyber-crime legislations has positive impact on product
differentiation strategy of Apple.
Negative Factor: The action of governments all over the globe implementing legislation to limit
private data usage of large corporations affects business strategy of the company. This is because
it limits consumer insight gained by the company to develop innovate solution which deal with
consumer problems.
TASK 2
P2 Critical analysis of internal capabilities of Apple by using suitable frameworks to assess
strengths or weaknesses of the company
McKinsey's 7S Analysis
(Source: McKinsey 7S Model, 2021)
 Strategy: The first element of the analysis focuses on the business strategy adopted by
the company (Razmi, Mehrvar and Hassani, 2020). The business strategy of Apple which
includes forming strategics alliances and product differentiation has helped the company
gain success in their industry. The advantage of this strategy is that it helps the company
provide innovative solutions to the company. The disadvantage of this strategy is that it
increases expenditure of the firm.
5
Illustration 2: McKinsey 7S Model, 2021.

 Structure: Apple has adopted hierarchical organizational structure. This involves
creating hierarchy of roles at the company. The advantage of this structure is that it
increases accountability at the company while the disadvantage is that it lowers
employee satisfaction.
 Systems: The firm utilizes wide range of advanced system to ensure smooth functioning f
the company such as knowledge management system, business intelligence and
processing system. The advantage of such system is that it facilitates creation of
innovative environment at the company. The disadvantage of usage of advanced systems
is that it introduces cyber-security threats at the company.
 Skills: Employees at Apple are innovative and encouraged to provide unique solutions
for the growth of the firm. The advantage of this is that it help the company gain
competitive advantage through innovation. Disadvantage is that focus on innovation can
also lead to wastage of resources in producing commodities which don't succeed in the
market.
 Shared Values: Setting aggressive goals, building products which we believe in and
making positive difference in society are the values of Apple (Etzioni, 2018). The
advantage provided by such values is increase in sustainability and ethical nature of the
fir. The disadvantage of such aggressive values is that it reduces employee satisfaction
by negatively impacting their work-life balance.
 Style: This element of the analysis looks at leadership style of the company (Faturrohman
and et. al., 2018). The leadership style used at Apple is democratic leadership style. The
advantage of this style is that it increases employee involvement while the disadvantage
is that it leads to time wastage. This is because under the democratic leadership decisions
are made by considering opinions of each employee.
 Staff: The company has constructed talented and dedicated workforce by building an
attractive employer brand. The advantage of this is that it helps the firm gain talented
employees from every corer of the world. The disadvantage of this factor is that it
increases intercultural conflicts.
6

TASK 3
P3 Application of Porter's five forces analysis on Apple
(Source: Understanding Porter's Five Forces Model (How to Use It + Template), 2021) Competitive Rivalry; Apple faces high competition from International mobile
manufacturing companies. Chinese smartphone manufactures Huawie, Xiaomi and
OnePlus offer consumers mobiles at lower price and are attracting middle income
consumers from Ape. In addition to this Samsung, Nokia and Acer are other international
competitors of the company. Buyers Power: This element of the Porter's five forces framework looks at the ability of
consumers to influence price of the products (O'Hara and et. al., 2017). The power of
consumers in case of Apple is high. The reason for this is that consumers have many
options to purchase their smartphone products. Only the consumers who purchase the
products of the company for the brand value of Apple are loyal to the firm.
7
Illustration 3: Understanding Porter's Five Forces Model (How to Use It +
Template), 2021.

 Suppliers Power:The ability of suppliers to influence prices is low. High ratio of firm
concentration to supplier concentration, moderate number of suppliers and medium to
high overall supply restricts suppliers power in mobile manufacturing sector. Threat of Substitute Products: Threat of substitutes is low in case of Apple. This is
because Apple products offer advanced technology in comparison to cheaper substitutes.
 Threat of new entrants: The high costs related to brand building and initial investment in
producing mobile phones is the reason for low threat of new entrants for Apple.
TASK 4
P4 Formulation of strategic planning for Apple by using suitable frameworks, concepts and
models
Bowman's strategic clock
(Source: Bowman's Strategic Clock, 2021)
This model identified eight strategic position on the basis of the basis of value
proposition gained by the consumers (Echchakoui, 2018). It showcases range of strategic options
which can be adapted by a company to position their product on the basis of two dimensions
8
Illustration 4: Bowman’s Strategy Clock, 2021.

which are price and perceived value of the consumers. The eight strategic options provided under
this model are explained below:
Position 1: Low price and low added value
The price of the product in this position of the strategic clock is low and the product and
service of the company is not distinguished as the products are of very low quality. The firm in
this position is able to gain profitability by keeping price of the products extremely low and
depending on high volume sales to ear profitability.
Position 2: Low Price
In this position the price of the products and services offered by the company is low but
there is some perceived vale of the products. Undercutting less valuable competitors to attain
profitability is the main aim of this strategy.
Position 3: Hybrid
Some form of product differentiation is adopted by the company in this position along
with lower price of the products in comparison to rival firms. This helps the company attain
profitability on the basis of high perceived value and low cost (ur Rahman and et. al., 2019).
Position 4: Differentiation
In this position business firms produce high;y distinguished products to build loyal
continuer base and attain high profitability.
Position 5: Focused Differentiation
This strategy involves differentiating products and services of the company for a
particular target market. This type of differentiation increases product price and business aim to
gain higher profit margin by focusing on particular consumer segment.
Position 6: Risky high Margins
In this strategic position involves taking a non-deferentiated product and applying a
higher price. This is short-term strategy which does not offer long-term growth.
Position 7: Monopoly Pricing
In this position there is single firm providing specific products or services to the
consumers (Helmold and Samara, 2019).
Position 8: Loss of market share
This is the final strategic position in which an inferior products is priced similarly to
better competitors. This position alienates consumers and leads to loss of market share.
9

Apple neds to adopt Hybrid and focused differentiation strategy. Hybrid strategy will
help the company cater to middle income consumers while the focused strategy will help the
company develop loyal consumers in niche market such as digital solutions for businesses and
elite consumers segment.
Porter's Generic Strategies
 Cost Leadership: In this strategy, the company takes aggressive efforts to build
economies of scale and implement tight cost controls to become the leader in low cost
producer in the industry. This strategy provides the advantage of increased profitability
and enables business firms to successfully penetrate international markets.
 Differentiation: In this strategy the company develops differentiated products which
provide innovative solutions and additional services to consumers compared to rival
firms. This strategy is helpful in developing successful international brand image of the
company (Hales and Mclarney, 2017).
 Focus: This is the final strategy of this model which involves focusing on specific
consumer segment. In addition to this cost leadership or differentiation strategy is
adopted by the company to gain competitive advantage on specific market or attracting
consumers of particular segment. The benefit of this strategy is that it helps the firm gain
loyal consumers for long-term survival of the company.
Apple neds to adopt Focus strategy. In this strategy the firm needs to adopt cost focus
strategy to offer middle income consumers affordable Apple products and differentiation strategy
to target specific consumer segment of elite consumer base and international markets. The
justification of this strategy is the Apple will be able to stop alienation of middle income
consumers. Apart from this, attract consumers in international markets by developing products
catering to their specific needs.
10

CONCLUSION
From the above report it is concluded that an effective business strategy helps the
company gain competitive advantage and strategic planing requires utilization of different
frameworks and models. Conducing a macro environmental analysis helps the company
understand the ways in whir external environment affects future actions of the company and
make effective decisions. PESTEL analysis is useful too for completing a macro environmental
analysis. In addition to this McKinsey's 7S analysis can be used by organizations to determine
internal strengths and weakness of the firm. This helps in strategic planning as capabilities of the
company are used to build successful business strategy. Porter's five forces analysis helps
understand the competitive landscape of the company which contributes to strategic planning.
This is because steps can be taken by the company to gain beneficial competitive positioning the
industry. Bowman's strategic clock and Porter's Generic strategy are two frameworks which
support strategic planning. This is because these framework provides various options to gain
competitive positioning in the industry and take actions to facilitate future success of the
company.
11

REFERENCES
Books and Journals
Dasgupta, M., 2018. Driving innovation through strategic alliances: a framework. International
Journal of Strategic Business Alliances, 6(3). pp.130-147.
Echchakoui, S., 2018. An analytical model that links customer-perceived value and competitive
strategies. Journal of Marketing Analytics, 6(4), pp.138-149.
Etzioni, A., 2018. Apple: Good business, poor citizen?. Journal of Business Ethics, 151(1), pp.1-
11.
Fan, Y. and Yang, C., 2020. Competition, product proliferation, and welfare: A study of the US
smartphone market. American Economic Journal: Microeconomics, 12(2). pp.99-134.
Faturrohman and et. al., 2018. Application of RBV Theory and McKinsey 7’S Model on Start-up
Company. Scientific Journal of PPI-UKM, 5(1). pp.1-6.
Fozer and et. al., 2017. Life cycle, PESTLE and multi-criteria decision analysis of CCS process
alternatives. Journal of cleaner production, 147. pp.75-85.
Hales, G. and Mclarney, C., 2017. Uber's Competitive Advantage vis-à-vis Porter's Generic
Strategies. IUP Journal of Management Research, 16(4).
Helmold, M. and Samara, W., 2019. Progress in Performance Management: Industry Insights
and Case Studies on Principles, Application Tools, and Practice. Springer.
Jiang, X., 2020. Digital economy in the post-pandemic era. Journal of Chinese Economic and
Business Studies, 18(4). pp.333-339.
Makulilo, A. B., 2021. The long arm of GDPR in Africa: reflection on data privacy law reform
and practice in Mauritius. The International Journal of Human Rights, 25(1), pp.117-
146.
O'Hara and et. al., 2017. Tuberculosis testing for healthcare workers in South Africa: A health
service analysis using Porter's Five Forces Framework. International Journal of
Healthcare Management, 10(1). pp.49-56.
Pattuglia, S. and Amoroso, S., 2019. ORGANIZING THE MARKETING ACTIONS AROUND
PREMIUM PRICE IN TECHNOLOGICAL BRANDS: THE CASE OF APPLE.
Skyline Business Journal, 15(S1). pp.9-21.
Razmi, J., Mehrvar, M. and Hassani, A., 2020. An Assessment Model of McKinsey 7S Model-
Based Framework for Knowledge Management Maturity in Agility Promotion. Journal
of Information & Knowledge Management, 19(04). p.2050036.
ur Rahman and et. al., 2019. A unified clock and switched-capacitor-based power delivery
architecture for variation tolerance in low-voltage SoC domains. IEEE Journal of Solid-
State Circuits, 54(4). pp.1173-1184.
Zahari, A. R. and Romli, F. I., 2019. Analysis of suborbital flight operation using PESTLE.
Journal of Atmospheric and Solar-Terrestrial Physics, 192. p.104901.
Online
Apple is now worth more than the entire FTESE, 2021. [Online] Available through
<https://www.telegraph.co.uk/technology/2020/09/01/apple-now-worth-entire-ftse-
100/>
Scanning the Environment: PESTEL Analysis, 2021. [Online] Available through
<https://www.planiumpro.com/blog/scanning-the-environment-pestel-analysis/>
McKinsey 7S Model, 2021. [Online] Available through
<https://strategicmanagementinsight.com/tools/mckinsey-7s-model-framework/>
12

Understanding Porter's Five Forces Model (How to Use It + Template), 2021. [Online] Available
through <https://www.semrush.com/blog/understanding-porters-five-forces-model/>
Bowman's Strategic Clock, 2021. [Online] Available through
<https://www.consuunt.com/bowmans-strategy-clock/>
13