Strategy Audit Report for Apple Inc

This report provides an analysis of the strategic issues faced by Apple Inc, including smart phone market saturation, over-dependency on iPhone market, low market penetration, barrier for disruptive or radical innovation, beyond iPhone improbable growth, service business lack the scale and volume of business, and Apple losing its talent base. The report provides recommendations to manage the current vision of the company, reposition the business in the market, and continue its radical innovation culture. The report also discusses the risks and benefits of the recommended strategies.

Strategy Audit Report

Executive summery
In the current different strategic issues have been defied based on the previous business
internal and external analysis. those issues are Smart phone market saturation, Over
dependency on iphone market, low Market penetration, Barrier for disruptive or radical
innovation, Beyond iphone improbable growth, Service business lack the scale and volume of
business, Apple losing its talent base. Considering these issues some solutions has been
developed and those are managing the current vision of the company, repositioning the
business in the market, finding the next big thing to invest and continue its radical innovation
culture. These strategic changes are possible misalignment with respect to current product
portfolio, Structure, current Value chain activity, Performance measure and current
organisational culture and behaviour. But those strategic changes would bring diversified of
product and service portfolio along business diversification, growth in revenue and
profitability, reduction is business risk, opening of new source of revenue, developing better
competitive advantage, faster delivery of new innovations.

Table of Contents
Executive summery....................................................................................................................2
Strategic issue and recommendations........................................................................................4
Strategic issue.........................................................................................................................4
Recommendations................................................................................................................11
Risk and benefit....................................................................................................................13
Key measurement.................................................................................................................15
Action...................................................................................................................................16
Reference..................................................................................................................................18
Appendices...............................................................................................................................24

Strategic issue and recommendations
The extensive analysis of the business external environment, business internal environment,
business positioning, strategic scorecard analysis is done in the appendices section of this
report. That analysis has provided some important insight to the current report. From those
insights some important issue for the Apple Inc is identified in this current report (Ghemawat
et al., 2010). Those issues are analysed in details in the following section of this report to
provide some important recommendations for the company. Later part of this report would
try to identify the risk-benefit aspect of the new strategy, key approach of measurement of
those strategies and the action plan of those strategies.
Strategic issue
The strategic issues for Apple are as follows.
 Smart phone market saturation
 Over dependency on iphone market
 Low Market penetration
 Barrier for disruptive or radical innovation
 Beyond iphone improbable growth
 Service business lack the scale and volume of business
 Apple losing its talent base
These strategic issues of Apple Inc are identified from the earlier market environment and
business analysis provided in the appendices section. A details analysis of these issues is
provided below to understand the possible way out for these issues.
Smart phone market saturation
The market of the smart phone is now saturated state. The customers are no longer having
any excitement from the new release of iphone. The improvement and the increment in the
technological innovation are gradual and slow. There is no marked different in the new
releases of the smart phones. The growth in the global smart phone sale indicates the
saturated growth figure from the 2015 onwards though future project is looking to be
somewhat better (statista, 2018).

[Source: statista, 2018]
The trend is flowing for the sale of the Apple products. The price of the products over the
year has been increased by Apple to address the financial or the profitability question of the
business (Verbeke, 2013). Better margin and better profit level were able to satisfy the
shareholders but the unit sale of the product has seen a year on year basis drop from the 2012
onward as shown in the figure below (Sherman, 2018). This is a strong strategic problem for
the business as the high days of customer enthusiasm are not visible in the market.

[Source Sherman, 2018]
Over dependency on iphone market and growing beyond iphone
The figure above shows that Apple has higher dependency on the iphone market. Apple
before the iphone and after its high popularity has tried to introduce several products into the
market for example ipod or iwatch. But none of those product has been able to deliver the
result that iphone have provided to apple. Therefore the lack of diversity in the product
portfolio is going to be huge strategic problem for the business as the smart phone market
losing its shine (White & Bruton, 2010).
Another important thing is that the technology curve. The current top product line especially
the PC and iphone products have probably reached the mature technology level in their
technology growth curve (White & Bruton, 2010). Therefore deriving further value from this
product portfolio may not be an appropriate strategic move for the company; rather here
Apple must invest the potential section in the technology market strategically. On the other
hand iphone is the largest revenue generator for the Apple, as of 2018’s 3rd quarter Apple is
having close to 57% of its revenue from this source (statista, 2018). Therefore under this

context of slowdown in innovation and dependency on this product, Apple has to think
beyond iphone.
[Source: macro-ops, 2018]
Low Market penetration
The command over the market is going to be another strategic issue for the Apple. Apple
products are high differentiation focused strategy based products. Because of this reason the
products are high premium priced (Ghemawat et al., 2010). This aspect makes Apple the
most profitable business internationally but the lack of market penetration is the main cause
of concern for the business. The first figure below that Samsung has the large market share
whereas Apple and Huawai is trailing being. In recent time Huawai has occupied the second
spot in the market by moving Apple from that space (Choudhury, 2018). But the market
penetration of iphone can be understood from the market share of the smart phone operating
system (OS) market share. The next figure of OS market share shows that more than 85% of
the OS market share in the world is under Android whereas iOS just hold around 15% market
share (Richter, 2017). Therefore in the overall market of smart phone in the world iphone has

limited market presence. Under the slowing down of smart phone market this low market
penetration would be an important problem for the organisation strategically.
[Source: gs.statcounter, 2018]

[Source: Richter, 2017]
Barrier for disruptive or radical innovation
The disruptive innovation provides the new technological breakthrough for the existing
market whereas the radical innovation provides the new technology to cater to a new market.
Apple in their past operation was able to contribute to their growth through both type of
innovation process (Gunday et al., 2011). But recently the innovation process in apple made
only the incremental type of innovation. Some market analysis has stated in recent time that
the innovation plan undertaken by the new leadership in the organisation, are taking lot more
time and that is slowing down the pace of innovation (firstpost, 2018). Some of them also
pointed out that the vision is lacking in this important strategic part of the Apple’s business
(firstpost, 2018).

[Source: LOPEZ , 2015]
Service business lack the scale and volume of business
Apple in recent time has recognised the iphone’s strategic issue. Considering this the
company is trying to grow in other section of the market. In recent time the services sector of
the Apple’s business has shown the strong potential. For example in the last quarter of 2017
this segment has been able to grow by impressive 24% year on year basis but the business
volume is just $6.3bn (Green, 2017). In comparison to iphone market this revenue is too little
to find any comfort for the company. The volume of sales and the scale of this income source
are not still proven. The hardware sales of the business is in the declining mode and replacing
that with this uncertain emerging source would provide some strategic issue for the business.
This approach would impact the current positioning of the company in the overall market. the
high margin hardware business would prove to be very difficult to be replaced by the new
services based business model (Green, 2017).
Apple losing its talent base

This is the recent problem that emerged in the Apple. In recent time Apple has lost
substantial number of talented employees from the operation. This problem is also linked
with the strategic problem that the business has. Apple’s loss of talent is still at a lower level
but the probability of the future large loss of talent is quite high for the organisation
(YAROW, 2013). The people working for the iphone and its current OS are losing their
interest as they think that it would never be the same as the first iphone (YAROW,
2013). Therefore they are moving towards the other opportunity in the industry.
Recommendations
[Source: Jurevicius, 2018]
The above diagram shows the product and service portfolio of Apple. The hardware and the
software section of the business is not growing fast but the services and the application
software is growing fast in the business. The estimation is the by 2021 the services section
would only contribute close to $50bn to the total revenue (Gurman, 2018). Considering this
aspect and the above analysis the following suggestion is provided.
 Managing the current vision of the company for business diversification
 Innovation strategy change and continuation of its radical or disruptive innovation
culture to develop new product
 Repositioning the business in the market

The strategies are derived from the current business internal and external situation. This new
direction for the organisation is selected on the basis of different consideration and those are
explained in the section below.
Managing the current vision of the company for business diversification
The above detailed analysis of the strategic issue of Apple has put forwarded the business
current vision as one of the important issue for the strategic direction. The current strategic
vision developed by the current leadership focuses on the innovation, uncompromising
persuasion of excellence, much focused activity on the new technology development,
following open innovation culture, existing to deliver the great product to the customer
(Rowland, 2018). The current vision is in line with the organisational culture of the
organisation and the current market position of the business (Czinkota & Ronkainen,
2010). Apple has the long tradition of innovation, technology leadership and current market
leader position. But the future challenges for the business is serious and need appropriate
approach to counter. Therefore the current vision would need some modification to be
effective. The current vision needs an approach of urgency and strong direction. The
innovation efforts are not currently able to deliver some strong result and it is also slow.
Therefore the sense of urgency would be able to fasten the activity which would help Apple
to broaden the innovation and technological gap with its competitors. The current vision
states that the great product delivery is the reason for Apple’s existence. If this current vision
adds the ‘great solution delivery’ part in that, the approach would be holistic (Hoyer et al.,
2010). This approach would add the outward thinking along with the internal approach in the
new product or service development. On the other hand direction would help the employees
to focus on the next big thing in the market and not only focus on the current product
development approach.
Innovation strategy change and continuation of its radical or disruptive innovation
culture to develop new product
Some of the innovation requirements are in the field of future energy use, mobility, artificial
intelligence and robotics, space technology and so no. The current vision of Apple is focused
based on the Steve Job’s technology push strategy of innovation where the organisation does
innovation and then makes a product to market that (Finkle & Mallin, 2010). For a vision

leader like Steve Job that approach helped Apple. This is the technology push strategy of
innovation. But the current strategy for innovation needs to change into market pull strategy
where the innovation development would base on the market needs. This approach would
help the organisation broaden the approach and contribute through the radical or disruptive
innovations. This direction would create new enthusiasm among the employees of the
organisation and inn addition to the new vision this would help in retaining the talent base of
the organisation. To comply with the above diversification strategy and alternative big
revenue source development apart from iphone, this strategic approach would be highly
important (Hoyer et al., 2010).
Repositioning the business in the market
The current business growth direction for the Apple is the services part of the product
portfolio. Therefore the current vision as well as the business market positioning also need a
change (Hooley, Piercy & Nicoulaud, 2012). Currently Apple’s mission statement recognises
industry defining approach of Apple in computing and mobile devices and also digital music
industry like services sector redefining approach. Therefore the positioning of the company is
done as an exceptional experience based innovative, creative and market redefining brand in
the specific sector. There was time when Steve Jobs stated Apple as the “mobile device
company”. But under the new paradigm of the business internal, external needs and situation,
the brand positioning must the similar focus but a wider inclusion of sectors (Czinkota &
Ronkainen, 2010). The market pull innovation strategy would be well supported by the
positioning approach like a innovative, creative and market redefining brand that deliver
highest user experience for a variety of market need.
Risk and benefit
Strategy Impact Risk factor Benefit
Managing the
current vision of
the company for
business
diversification
Product portfolio
Structure
Value chain activity
Performance measure
The wider consideration
and redirection in the
company discussed earlier
would change the current
portfolio and may include
Diversification of
business and product
and service portfolio.
Reduction in business
risk.

may other solution oriented
products or services. This
may increase chance of
failure of different products
or service because of the
lack of focus. On the other
hand a successful
implementation means a
change in the current value
chain of the company
(Fleisher and Bensoussan,
2015). This new investment
would have certain risk. On
the other hand the culture
or the organisation may
remain same but the
structure would have a
change. This restructuring
would have certain risk
attracted. The sense of
urgency may miss the
current strict performance
measures.
Growth in revenue and
profitability.
Opening of new source
of revenue
(Rosenbusch,
Brinckmann, &
Bausch, 2011).
Faster delivery of new
innovations.
Developing better
competitive advantage.
Innovation strategy
change and
continuation of its
radical or
disruptive
innovation culture
to develop new
product
Structure
Performance measure
Organisational culture
This new market pull
innovation strategy would
ask for a change in the
culture and structure of the
organisation. This major
restructuring would be
highly risky. The
parameters of performance
measures and the
capabilities of the operation
would be changed. This
could mean decision
making risk.
Diversification of
business and product
and service portfolio.
Greater acceptability of
new solutions because
of market needs
considerations.
Effective identification
and investing time on
the next big thing for
the technology industry
(Fleisher and
Bensoussan, 2015).
Great enthusiasm of the

employees to relevantly
contribute and pursue
greater societal and
market needs.
Repositioning the
business in the
market
Structure
Product portfolio
Value chain activity
This strategic repositioning
would be having a position
of delivering great
technology solution to
future market needs
(Rosenbusch, Brinckmann,
& Bausch, 2011). This
would be in relative
misalignment with the
current product portfolio,
structure of organisation,
value chain of the business.
The benefits would be
changing the
perception of the
customer. For example
the services portfolio of
Apple would have a
better brand perception
among the customer.
This would bring wider
acceptability to the
customers.
Key measurement
The current strategy would be based on this following balance scorecard of the business.
Objectives Measures Targets Initiative
Financial Increase source of
revenue and total
revenue
Increase total sale
revenue.
Increase revenue
by 50% within
2022
Add new source
of revenue and
growth them fast.
Maintain the
growth rate of the
current product
portfolio (Smith,
2010).
Customer Having high
customer satisfied
experience based
creative and
innovative
Improving new
customer number
by 15% yearly.
Contributing 15%
additional income
from these new
customers of new
product or
Develop different
product and
service mix.
Entering new
product or service

solutions. services lines. segments by
providing
innovative and
high customer
experience based
solutions (Niven,
2011).
Internal process
of business
Developing
different sector
and product based
team to deliver
radical or
disruptive
innovation based
solutions with
urgency (Smith,
2010).
Allocating 30% of
total resource of
the company for
the new products
and services
development.
Developing 10
new product or
services in the
overall portfolio
with each having
capacity to 5%
contribution in the
total revenue.
The internal
innovation team
restructuring
process,
developing
culture of market
pull innovation
strategy.
Growth and
learning
New capability
development, new
functional team
development, new
branding
approach (Niven,
2011).
Recruit new talent
and train.
Relocate 30% of
current talent with
relevant
background to
these new projects
with greater
support.
Achieving
excellence in each
new capability.
Plan for staffing,
resource
allocation, KPI
development,
goals and
objective
development, new
marketing
planning.
Action
The action plan would be developed on the basis of the following ‘Wh’ questions.
What is the change or action?
The current strategic change would bring diversified approach of business, faster and
efficient new product development and changing current brand positioning (Teece, 2010).
Who would be responsible?

The current plan would be directed from the top leadership of the company. Then HRM and
finance function would be responsible for the staffing and resource allocation purpose by
following their functional and organisational goals (Teece, 2010). The marketing team would
plan for the repositioning strategy development. The innovation teams would be reorganised
and restructured under the operation function. The changes in the business value and supply
chain would be managed by the operation and logistic head.
When would the plan be implemented?
From the financial year of 2019 the strategic change would be implemented and the current
targets are set to be achieved by 2022.
What kind of resource is needed?
The required resources are the financial resource, human resource (Meskendahl, 2010).
Who are to be communicated?
In this change process proper communication is needed for different stakeholders. Top
management would have detailed business report along with business presentation. The
suppliers and distributors would be communicated through due transactional procedure. The
internal staffs would be communicated through formal written and face to face
communication. A detailed change plan would be shared with the internal staffs
(Meskendahl, 2010). Finally the reapportioning communication would be done with the
customer through the proper form of integrated marketing communications. The most
important communication would be done with the shareholder of the business. A proper
briefing and business presentation would be done at the shareholder meeting.

Reference
Akkermans, H. A., & Van Oorschot, K. E. (2018). Relevance assumed: a case study of balanced
scorecard development using system dynamics. In System Dynamics (pp. 107-132). Palgrave
Macmillan, London.
Apple.com (2018). Retrieved from https://www.apple.com/us_kiosk_53068/shop. [Accessed on 18th
Sep, 2018]
Apple.com. (2018). Apple. Retrieved from https://www.apple.com/
Apple.com. (2018). Apple. Retrieved from https://www.apple.com/
Blenko, D., Waldron, K., Cornelius, J., Nespoli, G., & Lee, D. (2016). ORGANIZATIONAL
ANALYSIS: APPLE RETAIL STORES.
Brown, R. S. (2015). Strategic Intent, Capabilities and Financial Performance: A Study of the
Pharmaceutical Industry. Journal of Management Policy and Practice, 16(1), 18-30.
Choudhury, S. (2018). China's Huawei pulls ahead of Apple to become number-two smartphone
seller in the world. [online] CNBC. Available at: https://www.cnbc.com/2018/08/01/huawei-
beats-apple-to-become-number-two-smartphone-seller.html [Accessed 27 Sep. 2018].
Czinkota, M. R., & Ronkainen, I. A. (2010). Global business: positioning ventures ahead.
Routledge.
Davcik, N. S., & Sharma, P. (2016). Marketing resources, performance, and competitive advantage:
A review and future research directions. Journal of Business Research, 69(12), 5547-5552.
Davcik, N. S., & Sharma, P. (2016). Marketing resources, performance, and competitive advantage:
A review and future research directions. Journal of Business Research, 69(12), 5547-5552.
DZagotta, R., & Robinson, D. (2002). Keys to successful strategy execution. The Journal of Business
Strategy, 23(1), 30–34. (

echer, J. D. (2005). Operational alignment: Bridging the gap between strategy and execution.
Business Performance Management Magazine, 3(1), 11.
Kaplan, R. S., & Norton, D. P. (2007). Using the balanced scorecard as a strategic
management system. Harvard Business Review, 85(7/8), 150–161.
Ferris, G. R., Harris, J. N., Russell, Z. A., Ellen III, B. P., Martinez, A. D., & Blass, F. R. (2014).
The role of reputation in the organizational sciences: a multilevel review, construct
assessment, and research directions. In Research in personnel and human resources
management (pp. 241-303). Emerald Group Publishing Limited.
Finkle, T. A., & Mallin, M. L. (2010). Steve Jobs and Apple, Inc. Journal of the International
Academy for Case Studies, 16(7), 31.
firstpost. (2018). GET RID OF TIM COOK: ANALYST BLAMES APPLE'S INNOVATION
SLOWDOWN ON TOP 3 EXECS. [online]. Available at:
https://www.firstpost.com/tech/news-analysis/get-rid-of-tim-cook-analyst-blames-apples-
innovation-slowdown-on-top-3-execs-3680899.html [Accessed 27 Sep. 2018].
Fleisher, C. S., and Bensoussan, B. E. (2015). Business and competitive analysis: effective
application of new and classic methods. FT Press.
Gereffi, G., & Fernandez-Stark, K. (2016). Global value chain analysis: a primer.
Ghemawat, P., Cassiman, B., Collis, D. J., & Rivkin, J. W. (2010). Strategy and the business
landscape. Upper Saddle River, NJ: Pearson.
Gibbons, R., & Kaplan, R. S. (2015). Formal Measures in Informal Management: Can a Balanced
Scorecard Change a Culture?. American Economic Review, 105(5), 447-51.
Green, T. (2017). The 3 Biggest Challenges Facing Apple. [online]. Available at:
https://www.fool.com/investing/2017/01/12/the-3-biggest-challenges-facing-apple.aspx
[Accessed 27 Sep. 2018].
gs.statcounter. (2018). Mobile Vendor Market Share Worldwide. [online]. Available at:
http://gs.statcounter.com/vendor-market-share/mobile [Accessed 27 Sep. 2018].

Gummesson, E., Kuusela, H., &Närvänen, E. (2014). Reinventing marketing strategy by recasting
supplier/customer roles. Journal of Service Management, 25(2), 228-240.
Gunday, G., Ulusoy, G., Kilic, K., & Alpkan, L. (2011). Effects of innovation types on firm
performance. International Journal of production economics, 133(2), 662-676.
Gurman, M. (2018). Apple tops sales estimates on services growth, iPhone stability.
[online] .Available at:
https://www.livemint.com/Companies/9RaSZxoYNQVtZwRea19ZgL/Apple-tops-sales-
estimates-on-services-growth-iPhone-stabil.html [Accessed 27 Sep. 2018].
Hooley, G., Piercy, N. F., & Nicoulaud, B. (2012). Marketing strategy and competitive positioning.
Prentice Hall/Financial Times.
Hoyer, W. D., Chandy, R., Dorotic, M., Krafft, M., & Singh, S. S. (2010). Consumer cocreation in
new product development. Journal of service research, 13(3), 283-296.
Hunt, S. D. (2018). Advancing marketing strategy in the marketing discipline and beyond: from
promise, to neglect, to prominence, to fragment (to promise?). Journal of Marketing
Management, 34(1-2), 16-51.
Inabinett, J. M. &Ballaro, J. M. (2014). Developing an organization by predicting employee retention
by matching corporate culture with employee's values: A correlation study. Organization
Development Journal, 32(1), 55-74.
Jurevicius, O. (2018). SWOT analysis of Apple (5 Key Strengths in 2018). [online]. Available at:
https://www.strategicmanagementinsight.com/swot-analyses/apple-swot-analysis.html
[Accessed 27 Sep. 2018].
Khan, U. A., Alam, M. N., &Alam, S. (2015). A critical analysis of internal and external
environment of Apple Inc. International Journal of Economics, Commerce and
Management, 3(6), 955-961.
LOPEZ , J. (2015). Types of Innovation. [online]. Available at:
https://techblog.constantcontact.com/software-development/types-of-innovation/ [Accessed
27 Sep. 2018].

macro-ops. (2018). What’s really driving apple?. [online]. Available at:
https://macro-ops.com/whats-really-driving-apple/ [Accessed 27 Sep. 2018].
Meskendahl, S. (2010). The influence of business strategy on project portfolio management and its
success—A conceptual framework. International Journal of Project Management, 28(8),
807-817.
Mitrofanov, A. P., Krutikova, A. A., &Parsheva, K. A. (2016). Research of Physical and Chemical
Processes Occurring in the Interaction of Stainless Steel with the External Environment
Elements Used for Impregnating the Aabrasive Tools. Russian Internet Journal of Industrial
Engineering, 4(3), 46-49.
Niven, P. R. (2011). Balanced scorecard: Step-by-step for government and nonprofit agencies. John
Wiley & Sons.
Peterson, M., Gröne, F., Kammer, K., &Kirscheneder, J. (2010). Multi-channel customer
management: Delighting consumers, driving efficiency. Journal of Direct, Data and Digital
Marketing Practice, 12(1), 10–15. doi: 10.1057/dddmp.2010.16.
Piao, M., &Kleiner, B. (2015). Excellence in the Electronics Industry: The Comparison of the
Organizational Culture among Apple Inc., Samsung Electronics and Google Inc. Conflict
Resolution & Negotiation Journal, 2015(1).
Pousa, C. (2016). An Initial Assessment of Measurement Invariance in Sales Force Coaching:
Comparing the French and Spanish Versions of Ellinger’s Coaching Measure. In Celebrating
America’s Pastimes: Baseball, Hot Dogs, Apple Pie and Marketing? (pp. 767-772). Springer,
Cham.
Richter, F. (2017). Android and iOS Dominate the Smartphone Market. [online]. Available at:
https://www.statista.com/chart/9628/smartphone-platform-market-share-forecast/ [Accessed
27 Sep. 2018].

Roh, J. J., Hong, P., & Park, Y. (2008). Organizational culture and supply chain strategy: A
framework for effective information flows. Journal of Enterprise Information Management,
21(4), 361–376`
Rosenbusch, N., Brinckmann, J., & Bausch, A. (2011). Is innovation always beneficial? A meta-
analysis of the relationship between innovation and performance in SMEs. Journal of
business Venturing, 26(4), 441-457.
ROWLAND, C. (2018). Apple Inc.’s Mission Statement and Vision Statement (An Analysis).
[online]. Available at: http://panmore.com/apple-mission-statement-vision-statement
[Accessed 27 Sep. 2018].
Schmelz, D. R., Ramsey, R. P., &Gassenheimer, J. B. (2011). Bleu Ribbon Chocolates: How can
small businesses adapt to a changing environment? Marketing Education Review, 21(2), 177–
182. doi:10.2753/MER1052-8008210207 (EBSCO AN: 63968062)
Sherman, E. (2018). Apple Has a Lot to Be Worried About - Yes, Even Though They Are Doing
Great. [online]. Available at: https://www.inc.com/erik-sherman/apple-investors-watchers-
are-worried-about-next-earnings-call-heres-why.html [Accessed 27 Sep. 2018].
Smith, B. D. (2007). Strategy-making: What works is what fits. ******opean Business Forum, 28,
32–37. (ProQuest
Smith, R. F. (2010). Business process management and the balanced scorecard: using processes as
strategic drivers. John Wiley & Sons.
Solomon, M. R., Dahl, D. W., White, K., Zaichkowsky, J. L., &Polegato, R. (2014). Consumer
behavior: Buying, having, and being (Vol. 10). London: Pearson.
Soo Hoo, P. L. (2016). Exploring culture theory GLOBE in cross-cultural communication in Asian
business negotiations. International Review of Management and Marketing , 6(7)
statista. (2018). Global smartphone shipments forecast from 2010 to 2022 (in million units). [online].
Available at: https://www.statista.com/statistics/263441/global-smartphone-shipments-
forecast/ [Accessed 27 Sep. 2018].

statista. (2018). iPhone sales share of Apple's total revenue worldwide from 1st quarter 2009 to 3rd
quarter 2018. [online]. Available at: https://www.statista.com/statistics/253649/iphone-
revenue-as-share-of-apples-total-revenue/ [Accessed 27 Sep. 2018].
Taoketao, E., Feng, T., Song, Y., &Nie, Y. (2018). Does sustainability marketing strategy achieve
payback profits? A signaling theory perspective. Corporate Social Responsibility and
Environmental Management.
Teece, D. J. (2010). Business models, business strategy and innovation. Long range planning, 43(2-
3), 172-194.
Teng, Y. W., Tai, C. H., Yu, P. S., & Chen, M. S. (2015, August). An effective marketing strategy
for revenue maximization with a quantity constraint. In Proceedings of the 21th ACM
SIGKDD International Conference on Knowledge Discovery and Data Mining (pp. 1175-
1184). ACM.
Verbeke, A. (2013). International business strategy. Cambridge University Press.
Wensley, R. (2016). The basics of marketing strategy. In The marketing book (pp. 75-107).
Routledge.
White, M. A., & Bruton, G. D. (2010). The management of technology and innovation: A strategic
approach. Cengage Learning.
YAROW, J. (2013). The Single Biggest Problem That Apple Faces, And Almost Nobody Is Talking
About It. [online]. Available at: https://www.businessinsider.in/The-Single-Biggest-Problem-
That-Apple-Faces-And-Almost-Nobody-Is-Talking-About-It/articleshow/21274814.cms
[Accessed 27 Sep. 2018].

Appendices
MARKET POSITION ANALYSIS
Part 1: Interview
Question 1 – Who are the target customers of Apple Inc.?
Answer – The target customers of the company are those who belong to the premium group.
Question 2 –How are the customer segments of Apple Inc. identified?
Answer – The three major segments of the company are the youngsters, the professionals and
normal crowd.
Question 3 –How does the products and services are able to satisfy the customers?
Answer – The products and services are able to fulfil the needs of the customers who belong
to different groups.
Question 4 – What is the position of the product based on competitors?
Answer – Apple has developed a leadership position in comparison to its competitors in the
technology industry.
Question 5 – What is the source of competitive advantage of Apple Inc.?
Answer – The major source of competitive advantage of the company is based on the brand
value of Apple.
Question 6 – Is the competitive advantage sustainable in nature?
Answer – The brand value which has been created by Apple is highly sustainable in nature.
Part 2: Analysis
Target customers –Apple mainly has three different target groups which include the music
lovers who are provided with services like iTunes and iPod. The professionals and teenagers
are also considered to be the target customers for services and products that are provided by
Apple. The products which are targeted towards this group mainly include, iPhone, Macbook

and Tablets. The third group include the crowd who are able to use the other products of the
company like, Apple iWatch, Apple TV and iBooks (Apple.com, 2018).
Needs and wants of customers – The main product which is able to affect the revenues of
the company is Apple iPhone. The wants and the needs of these consumers are thereby
satisfied in an effective manner with the help of the unique features that are offered by these
products. The premium quality of the products is considered to be another major factor which
is able to affect the wants and needs of the consumers (Davcik& Sharma, 2016).
Position of iPhone based on its competitors – Apple iPhone has been able to develop an
effective position in the industry with the help of its innovative and unique products. The
services that are thereby provided to the customers by the company are able to affect the
competitors in a huge manner. The leadership position which has been developed by Apple in
the technology based industry is thereby related to the innovative products and services
which are provided to the premium group of customers. The products that are offered by
Apple are unique as compared to those which are offered by the other organizations which
operate in the technology industry (Gummesson, Kuusela&Närvänen, 2014).
The effective supply chain of the company is an important factor that has been helpful in the
development of its position in the industry. The company has thereby been able to operate in
a leadership position with the help of its diverse and effective range of products. The
company has thereby developed the topmost position in the industry with the help of different
innovative products which have been developed in an effective manner. The distribution
based network of the company has played a major role in the development of its position in
the technology based industry (Hunt, 2018).
The price which has been set for the products is able to provide the tag of premium
organization to Apple Inc. The premium pricing has further ensured the high quality of
products that have been offered by Apple Inc. to the huge number of customers all over the
world. The brand image of Apple is able to provide the company a position of the market
leader in the technology industry. Apple Inc. is thereby a leader in the technology industry
with the help of effective position in the industry (Solomon et al., 2014).
Source of competitive advantage of Apple iPhone – The major source of competitive
advantage which has been developed by Apple iPhone is based on the innovativeness of the
products and the ways by which the products are able to provide effective advantages to the

customers. The major competitive advantage based source of Apple iPhone is the innovative
design of the products and the premium features. The value which has been developed by the
brand in the technology based industry is an important part of the competitive advantage of
the company (Taoketao et al., 2018).
Apple has been able to develop a leadership position in the industry in the year 2017 in
comparison to the organizations like, IBM and Coca Cola. The strength of the brand is an
important factor that has been able to increase the visibility of the company in the industry.
The premium pricing based strategy which has been implemented by Apple Inc. is also a
major source of competitive advantage which has developed a unique market for Apple
iPhone in the technology industry (Teng et al., 2015).
Long term sustainability of the source of competitive advantage –The source of
competitive advantage which has been gained by the company is highly sustainable in nature.
The brand value and strength of the company is a competitive advantage which is sustainable
in nature. This can provide long term profitability to the company in the technology industry
of the world. The brand value of the company is important for the technology industry in
which Apple had its operations. The long term sustainability of this competitive advantage is
thereby able to affect the ways by which Apple is able to operate in the market (Wensley,
2016).
The brand value has also been able to affect the ways by which the products which are
developed by the company in the industry. The brand strength has thereby been able to play
the most important role in the effective operations of the company in the market. The
products which have been developed by the company have developed by the company are
able to develop their customer base with the help of the value which has been developed by
the brand in the industry (Taoketao et al., 2018).

Premium quality products
High effectiveness of the product
High brand value of the product
Competitors – Google and Samsung
Premium quality of products
High effectiveness of the product
High brand value of the product
Rate – 2 (need fully met)
Rate – 2 (need fully met)
Rate – 2 (need fully met)
EXTERNAL ENVIRONMENT SCAN
Economic trends and factors
The economic factors and trends are able to develop effective opportunities for the operations
of Apple Inc. The industry and market based conditions are thereby defined in an effective
manner with the help of proper analysis of these factors. Major opportunities that are
provided by the economic condition are based on the growth rates of the developing countries
and stable economic conditions that are depicted by the developed countries (Brown, 2015).
Political trends and factors
The political factors are thereby based on the proper improvement of the free trade based
policies and the stable political conditions which have been formed in the developed
countries. The major aspect of the model which is able to affect the business operations of
Apple is based on policies which are developed by the governments in an effective way
(Apple.com., 2018).

Regulatory and legal factors
The legal factors are thereby based on the privacy based regulations that are formed in the
technological environment of different countries. The rapid growth in telecommunication
based services is also considered to be an important factor in effective operations of Apple.
Societal factors and trends
The sociocultural and social factors are considered to be important for the proper analysis of
expectations and behavior of the consumers. The growth which has been seen in the usage of
social media and mobile based access is able to act as an important factor in the operations of
Apple Inc. (Davcik& Sharma, 2016).
Technological factors and trends
The technological environment of different countries is able to play a major role in
development of the products of Apple. The levels of technological integration is thereby
considered to be an important part of the effective revenues and profitability of Apple in the
technology based industry. The company is thereby able to design the apps based on needs
and demands of consumers (Schmelz, Ramsey&Gassenheimer, 2011).
Geographic factors and trends
The environmental and geographic factors are able to influence the effective operations of
Apple in the industry. The maintenance of business sustainability is thereby able to play the
most important role in the production based process of Apple in different countries.
Porter’s five forces that consists of the following aspects:
Threat of new competition
The entry of new organizations in the industry is a force which is able to affect Apple in a
moderate way. The high requirements of capital and high value of the brand are considered to
be important factors which restrict the new companies (Soo Hoo, 2016).
Threat of substitute products or services
The threats which are provided by the substitute products of Apple Inc. are quite low in case
of Apple as the organization is able to provide unique and innovative products to the
customers. The high levels of availability of the substitutes is a moderate force and on the

other hand, low performance which is depicted by the substitutes is a weak force (Peterson et
al., 2010).
Bargaining power of customers
The bargaining based power which is depicted by consumers or buyers in the industry is quite
high. The consumers are able to affect the prices of the products and the services that are
thereby offered by the company.
Bargaining power of suppliers
The supplier based force which is experienced by Apple in the technology industry is weak in
nature. The company has been able to develop huge number of dedicated suppliers in the
industry. This has been a major reason behind the ways by which the company is able to
dominate the suppliers in an effective manner. The prices of products are thereby not affected
by the suppliers of the company (Davcik& Sharma, 2016).
Intensity of competitive rivalry
The levels of competitive rivalry which is thereby faced by the company in the technology
industry are quite high. The levels of rivalry which have been depicted between the
organizations have been able to affect the effective levels of operations of Apple. The highly
competitive technology industry is thereby able to affect the levels of operations of Apple
Inc. in the industry. The high levels of aggressiveness of the other technological
organizations have been an important part of the rivalry based levels which are faced by
Apple Inc. (Schmelz, Ramsey&Gassenheimer, 2011).
The analysis of the industry has been able to depict that Apple has faced huge levels of
competition from the organizations which operate in the technology based industry of
different industries. Apple Inc. thereby needs to manage the operations in such a manner
which will play a major role in its sustainability in the industry in an effective way.
Organizational assessment
Introduction

Analyzing the business opportunities in right manner has become necessary for the current
scenario. Due to increasing competition in the market, understanding own strength and
weakness have become necessary. The purpose of this study is to highlight the internal
environment of Apple Inc. By highlighting the values chain analysis and SWOT analysis, the
internal environment and opportunities have been identified in this study. At the end of the
study, using balanced strategic scorecard the growth of the company has been measured.
Part I
Mission, vision, and values
The mission of Apple is to develop the performance standard of the employees so that it will
be able to maintain standard quality of products.The mission if Steve Jobs is to contribute to
the globe by introducing the mind tools that can bring the advancement in
mankind(Pousa,2016 ). In this process, the technological development as well as the
financial growth is included. It cannot be denied that in the current competitive industry
customer satisfaction has become the major concern for the companies. In this situation, it
has become necessary for Apple inc. is to introduce effective performance standard for
maintaining the customer retention process. Therefore, the vision of Apple Inc. is to develop
effective leadership practices in the organization so that the changing needs of the
customers can be satisfied and business operations can be done in proper manner. On the
other hand, the company also aims to maintain the employment standard in workplace so that
the competitiveness can be improved. The core value of Apple Inc.is to introduce principles,
qualities, company believes and standards in the workplace. By understanding the values of
this organization, it can be said that company aims to maintain the proper interaction between
suppliers, customers and employees across the world so that it can fulfill its promises to the
customers (Ferris et al., 2014).
Strategy clarification
While taking the interview of the senior manager of Apple Inc., it has been identified that it
aims to introduce effective transformational leadership practices in the workplace so that the
internal environment can be improved (Blenko et al., 2016). Aim of the company is to expand
its business all over the world and increase its sales revenue 6% within coming 2020. During
the interview, it has been analyzed that the company aims to expand its ecommerce for
establishing its strong brand image in all over the country. In the global industry, Samsung,

Tesla motors, Dell, Sony and Bose are the major competitors of this company (Apple.com,
2018). If the market position is being analyzed, it will be identified that in the year 2017, the
business revenue of this company was 22,923.4 crores USD, where the Samsung was 22,345
crores USD,Bose was 380 crores USD, Tesla motors with 1,175.9 crores USD and with the
similar target market (Piao&Kleiner, 2015). Therefore, it can be said that the Bose and
Samsung are the major competitors of Apple Inc.
Cultural assessment
Analyzing the political and economic situation in US it has been identified thatdue to the
increasing opportunities of the market, large numbers of organizations have got the chance to
develop business in the competitive industry. In this situation, maintaining the loyal
customers has become major concern for the company ((Mitrofanov, Krutikova&Parsheva,
2016)). In this situation, Apple Inc.has decided to introduce its product and service related
information to the people so that transparency can be maintained. By implementing this
strategy the company has aimed to increase the number of loyal customers. On the other
hand, it is also true that depending on this strategy the customer relationship can also be
improved, which can help to deal with the external competitiveness.
Value chain analysis
Value chain analysis is being considered as the effective way in which the business activities
of an organization can be analyzed. It is true that depending on the value chain analysis, the
competitive advantage can be gained.
Figure: Value chain analysis
(Source:Gereffi& Fernandez-Stark, 2016)

In case of value chain analysis, both the primary and support activities have higher
level of contribution in case of gaining the competitive advantage.Among the primary and
support activities, the company may focus on improving the inbound and outbound logistics.
This strategy can help in case of expanding its business. It cannotbe denied that Apple Inc has
expand its business in both the developing and developed countries, however, it needs to
focus on improving its logistics so that in other countries it can expand its business.
Summary of findings
It can be summarized that the company named Apple Inc. has decided to improve its
performance standard and uniqueness for maintaining its quality. Bose and Samsung are the
major competitors of Apple Inc.
Part II
SWOT analysis
Strength: The major strength of Apple Inc. is it has established its unique brand image in the
market. It is also true that using the innovative products in the market it has developed the
large customer base. The company has brought innovation in hardware and software and
introduced it in the market. By using the strong designing process, the company has
maintained its brand popularity in the market (Khan, Alam, &Alam, 2015). Apple Inc. has
developed effective promotional strategies for grabbing large number of customers’ attention.
If the company will be able to establish is strength in between manner, it will be able to
create tough position for its competitors.
Weakness:The major weakness of the company is it is maintaining its strong position in the
market since 1980 (Khan, Alam, &Alam, 2015). Due to this reason matching the increasing
customer expectation has become big challenge for the company. Incompatibility is being
considered as another important weaknessof the company. It has been identified that some of
the products of Apple Ice are not compatible with the third-party accessories. It influence the
decision making process of the customers. Due to this reason, the sales rate of the company
can be affected. By taking the advantage of this situation, the competitors can introduce its
products in lower ranges for grabbing customers’ attention.
Opportunities: Availability of technological advancement in the current industry can be
considered as the important opportunities of Apple Inc. On the other hand, with increasing

growth in GDP, people have started showing their interest towards consuming the luxury
brands (Inabinett&Ballaro, 2014). These opportunities can help to maintain its business
growth. Maintaining the performance standard the company will be able to get loyal
customers.
Threats: Market penetration by the other companies is biggest threat for Apple Inc in the
Smartphone industry (Khan, Alam, &Alam, 2015). It cannot be denied that Mac book is the
best product in the laptop segment, but increasing popularity of HP, Dell and Lenovo has
increased market competition.
Part III: Balanced Strategic Scorecard
Figure:Balanced Strategic Scorecard
(Source:Akkermans& Van Oorschot, 2018)
In the year 1990, David Norton and Robert Kaplan introduced Balanced Scorecard. It helps to
clarify the mission and vision of the company in right manner. There are fourgroups in this
Balanced Scorecard such as financial, customer, internal process and learning and growth,
which helps to achieve the goals and objectives of the company (Gibbons & Kaplan, 2015).
In the below table the balance scoreboard of Apple Inc. has been identified.
Financial
OBJECTIVES MEASUREMENT ACTION PLAN
To increase the sales Increasing 6 months

rate 6% within 2020 profitability
Customer Perspective
OBJECTIVES MEASUREMENT ACTION PLAN
To increase the
number of loyal
customers
Customer retention
rate 1year
Internal Processes Perspective
OBJECTIVES MEASUREMENT ACTION PLAN
To improve the
performance
standard
Feedbacks from the
customers 6months
Learning and Growth Perspective
OBJECTIVES MEASUREMENT ACTION PLAN
To introduce
innovative design in
the industry
With increasing
market share 1 year
Conclusion
In this study, it can be concluded that Apple Inc. has established its strong brand image in the
market so that the company will be able to gain the competitive advantage. However, due to
increasing competitors in the market, the company is dealing with several challenges. Id the

organization can use its opportunities in proper manner; it will be able to achieve its goals
and objectives.