A Detailed Case Study on Apple's Business and Corporate Strategies

This case study provides an in-depth analysis of Apple's strategic management, focusing on value creation, competitive analysis using Porter's Five Forces model, and a SWOT analysis. It evaluates Apple's corporate-level strategy, including diversification and business-level strategies such as product differentiation and vertical integration. The study also examines the implementation of Apple's business operations through its hierarchical organizational structure and product-centric alignment. The analysis highlights Apple's strengths in marketing and brand loyalty, weaknesses in premium pricing, opportunities in expanding distribution networks, and threats from competitive rivalry and imitation. The report concludes with recommendations for Apple to leverage its strengths and address its weaknesses to sustain its competitive edge in the consumer electronics market.

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Table of Contents
Introduction......................................................................................................................................2
Discussion........................................................................................................................................2
Evaluation of Apple’s Value Creation.........................................................................................2
Five Forces Analysis of Apple (Porter’s Five Forces Model).....................................................3
Apple’s Competitive Analysis.....................................................................................................5
Evaluating Apple’s Corporate Level Strategy.............................................................................6
Analyze Implementation of Apple’s Business Operations..........................................................8
Conclusion and Recommendation...................................................................................................9
References......................................................................................................................................10

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Introduction
Technical expertise aligned with minimalistic designs and innovative promotion with a
strategic leadership of Steve Jobs has sustained Apple as one of the most costly brands in the
world. Reports of Wheelen et al. (2017) have revealed that the organisations significant
achievements tend to develop into well established brand loyalty and further a supreme profits
growth ranging from $8.5 billion dollars in the year 2004 to over $235 billion as estimated in
2017. Following to a monotonous period, Apple founded by Steve jobs have refurbished in the
delayed phase of 1990s with a series of tactical and technical developments and further during
the 1997s, the company successfully launched the Apple online store significantly pursued by the
iMac along with the video controlling program ultimate cut Pro in 1998 (Morschett, Schramm-
Klein & Zentes, 2015). According to Lasserre (2017) it was the iPod which was introduced in the
early 2000 has embarked the business’s preliminary project away from traditional computer
systems as well as into other parts of consumer gadgets. The following report will be evaluating
the strategic management of Apple USA and further analyze recommendations aligning the
company’s strategies.
Discussion
Evaluation of Apple’s Value Creation
However till 2015 the overall market capitalization of Apple has reached almost $475
billion US that has been accounted to be higher than that of its competitors namely Google,
Microsoft and IBM. Furthermore as per the reports of Audretsch (2015) Apple market cap has
successfully acquired a record of over $755 billion in 2015 but however lately have been
experiencing a decline to around 5 20 billion US dollars in May 2016. Apple has persistently
been accountable for treating as well as promoting over 2.5 million jobs across the United States

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and further has been anticipating generating greater level of value towards employment resulting
to increasing number of initiatives taken by the company (Lasserre, 2017). Data produced by
Denney (2018) has indicated that merging newly developed financial support along with Apple's
current pace of investment with domestic suppliers and manufacturers Apple's revenues have
been estimated to be around $58 million for 2018. Additionally the company's direct financial
contribution to the US economy is estimated to be greater than 355 billion dollars over the next
five years without taking into consideration its current tax payments (Audretsch, 2015).
Five Forces Analysis of Apple (Porter’s Five Forces Model)
Apple’s strategies have partly been supported by the needs in order to deal with forces in
the external business environment. These forces however tend to constrain or reduce the
company’s market share and revenues (Khan, Alam & Alam, 2015).
 Rivalry among existing competitors (Strong) - Apple has been experiencing severe
rivalry which has been determining the intensity of power competitors constitute on each
other. Reports of Bradley, Madnick and Kim (2016), as companies such as Samsung,
Google and others have been competing assertively with Apple; such level of
aggressiveness has been analyzed in rapid advancement, aggressive promotion and
simulation. Furthermore, on the other hand, switching cost has also reduced further
implying that it is easy for consumers to change from Apple to new emerging brands,
thus intensifying the struggle. Thus, Five Forces analysis confirms that competitive
rivalry is between the most important deliberations in strategic formulation of Apple
(Wheeler & Omair, 2016).
 Bargaining Power of Buyers (Strong) - Audretsch (2015) has claimed that it is easy for
customers to switch brands by escalating the strength in forcing companies like Apple to

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guarantee higher level of consumer satisfaction. As the buying level of each purchaser
has been evaluated to Apple’s total profits, thus it is uncomplicated for buyers to move
from Apple to other emerging products and apply a high power.
Apple’s Porter’s five forces analysis
Source: (Wheeler & Omair, 2016)
 Bargaining power of suppliers (Weak) – Regardless of Apple constituting less than 200
providers of components for its product range, the business comprises additional options
because of several merchants worldwide. Such requisites tend to condense the bargaining
power of individual suppliers in imposing their demands on companies like Apple
(Morschett, Schramm-Klein & Zentes, 2015). In relation, authors have observed an
increased level of delivery for the majority of components of Apple merchandise.
 Threat of New Entrants or New Entry (Moderate) - Reports of Bradley, Madnick and
Kim (2016) have stated that instituting a business next to companies like Apple
necessitate elevated level of capitalization resulting new entrants into the consumer
electronics sector to develop well-established brands in order to compete with these

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companies. However, recently there have been identified large firms with the financial
competence to enter the market and influence revenue growth of Apple. For example,
according to Denney (2018), Google has been introducing products like Nexus
smartphones further implying that there are large companies which are competent to
directly compete against Apple.
 Threats of Substitutes (Weak) – Bradley, Madnick and Kim (2016) have stated that for
Apple, several customers would rather show greater level of inclination towards Apple
products due to their superior features. Thus, replacement tends to have a fragile force in
influencing Apple’s industry.
Apple’s Competitive Analysis
Apple’s success is associated with the capability to utilize business strengths in order to
prevail over weaknesses and threats and further to use opportunities in the industry setting. Thus,
A SWOT analysis of Apple offers comprehensive insights on the strategic measures of the
business, in particular to capitalize on its development relying on its strengths and opportunities
(Apple, 2019).
I. Strengths- Apple’s marketing mix primarily involves best pricing strategy generating
increased profit margins. Such an internal strategic factor has been identifies as one of the
significant strength because of its maximization of revenues even with limited sales
growth.
II. Weaknesses- Premium pricing strategy of Apple according to Audretsch (2015)
comprises the weakness of the reliance on retailing of high-end sell segments. As high
price-range chiefly magnetize consumers starting from the middle and high-income
cohort, whereas avoiding clients from low-income ranges to without difficulty obtain

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premium product range of the company. Such an internal strategic factor has been
identified as a considerable weakness as high-end market sections correspond to only a
marginal section of the global market.
III. Opportunities- Studies of Bradley, Madnick and Kim (2016) have revealed that recently,
Apple has been experiencing the opportunity to develop its distribution network. This
avenue however directly links to the disadvantages of the company’s restricted
distribution network. Additionally, an extended supply system can facilitate Apple to
acquire more clientele in the international marketplace. Furthermore, the business has the
prospect to amplify its trade capacity throughout insistent promotion, particularly for its
mobile goods (Wheeler & Omair, 2016).
IV. Threats- Khan, Alam and Alam (2015) have noted that severe marketing rivalry in the
consumer electronics sector has been occurring due to high level of aggressiveness
among companies. Apple has been competing with companies like Samsung which
recently has been implementing rapid innovative techniques. Additionally, Apple has
been encountering threat of imitation whereby significant numbers of local as well as
multinational firms have been copying the designs and features of Apple’s products
(Froud, Johal, Leaver & Williams, 2014).

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Apple’s Competitive Analysis
Source: (Audretsch, 2015)
Evaluating Apple’s Corporate Level Strategy
Drawing significance in analyzing corporate strategy, Khan, Alam and Alam (2015) have
identified two kinds of diversification namely linked and constrained. Companies who have been
using linked diversification primarily enter new businesses while it associates in certain way to
another business with which they are already engaged, but have not been essentially engaged to
other businesses. However, Apple has been employing constrained diversification by using their
skills to develop hardware and software (Froud, Johal, Leaver & Williams, 2014). The
Macintosh, iPad, iPhone as well as the Apple TV have been operating the OS X that is Apple’s
operating system by proficiently extending economies of opportunities, which according to
Myers and Fellow (2014) have been strategically creating cost investments for Apple as the
company’s resources have been distributed across several businesses.
Moreover, reports of Khan, Alam and Alam (2015) have emphasized on refurbishment of

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the iBook store which is presently operating as a book store. According to authors, the iBook
store must emerge as a print media platform for books, manuscripts, news articles and
magazines. However, though the digital print business is in its early years, but is considered to be
highly decisive for potential consumer electronic business. This further is perceived to be highly
decisive in providing Apple a significant opportunity to set up its platform as the paramount one
(Froud, Johal, Leaver & Williams, 2014).
Apple’s Business Level Strategy – Product Segregation in Design and Functionality
Apple business strategy has been essentially categorized as product differentiation in
design as well as functionality. Studies of Froud, Johal, Leaver and Williams (2014) have
revealed that Apple business strategy fundamentally supports building as well as increasing its
individual trade as well as online stores along with its third-party supply system in order to
efficiently acquire additional clientele and offer its clientele with premium level of trade as well
as post-sales support experience. Furthermore, drawing relevance to Apple’s business strategy,
Myers and Fellow (2014) have noted that the firm has been efficiently acclimatizing advanced
features along with competence of its products as well as services as groundwork of its
competitive gain. Moreover, Apple has been benefitting from its process of vertical integration
through strategies whereby the firm has extended its proficiency in software, hardware as well as
services. These factors have been resultant to Apple to be distinguished from rest of the existing
competition in the market. Furthermore, Apple’s competitive gain primarily associates with its
ecosystem that has further been facilitated by such high level of integration. According to reports
of Khan, Alam and Alam (2015), as Apple’s devices and software tend to sync successfully; they
function well with each other. Applications primarily operate on multiple Apple devices
simultaneously and no significant variation in user interfaces. On the other hand, similar items do

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not tend to align with me of other corporations, consequently generating the likes of a blocked
network. Apple’s network tends to create controlling expenses for its consumers to the rivalry
which further offers huge avenues in order to leverage associations with current customer base to
purposefully offer other products and services (Bradley, Madnick & Kim, 2016).
Analyze Implementation of Apple’s Business Operations
Apple comprises a hierarchical organizational composition with extraordinary divisional
distinctiveness along with a weak functional medium. The divisional individuality further refers
to the product-centric alignment surrounded by the company, such as for iOS as well as macOS
whereas the unconstructive efficient medium primarily entails inter-segmentation alliance though
the chain of command has been preserved (Myers & Fellow, 2014). While assessing Apple’s
organizational structure authors have been noted that the upper as well as lower levels of the
firm’s corporate configuration chiefly comprises of product-based distributions considered as a
factor resulting from the divisional form of organizational configuration. For example, Apple
with its corporate in the US constitutes a Senior Vice President employed for Software
Engineering for its iOS and macOS segment, a Senior Vice President operating in Hardware
Business functioning for segment aimed for Mac, iPhone, iPad and iPod along with a Senior
Vice President responsible for Hardware Technologies (Apple, 2019).
Furthermore, reports of Myers and Fellow (2014) have revealed that chain of command
in Apple’s organizational configuration relies on well-established management regulation in the
organization. Organizational ladder supposedly authorizes top influential namely Tim Cook to
strategically regulate operations in the business. Through the organizational ladder, business
operations as well as product-based range has been efficiently controlling in the course of the
judgments of the chief executive along with other senior executives. This lead of Apple’s

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corporate organization primarily eases rapid as well as successful strategic supervision and aids
in creating consistency right through the whole organization.
Conclusion and Recommendation
Hence to conclude, Apple could aim in amplifying their brand equity by intensifying their
distribution systems into the lower end, cheaper product range. Thus, by growing into this new
market the company can essentially raise its band width and further will be competent to enter
into a new customer sector. Furthermore, Apple could develop its brand identity in less
developed countries that have been currently unable to have the funds for Apple’s product at full
price, by selling their outmoded products for a reduced price in these nations. These strategies
would strategically facilitate Apple to remove existing supply and further at the same time inflate
their market share.

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References
Apple. (2019). Apple. Retrieved from https://www.apple.com/
Audretsch, D. B. (2015). Everything in its place: Entrepreneurship and the strategic
management of cities, regions, and states. Oxford University Press.
Audretsch, D. B. (2015). Everything in its place: Entrepreneurship and the strategic
management of cities, regions, and states. Oxford University Press.
Bradley, S. P., Madnick, S., & Kim, C. (2016). Digital Business. Chicago Business Press.
Denney, A. (2018). Apple plans to invest $1 billion in second campus in Northwest Austin, hire
5,000 new employees | Community Impact Newspaper. Retrieved from
https://communityimpact.com/austin/northwest-austin/development-construction/
2018/12/13/just-in-apple-plans-to-invest-1-billion-in-second-campus-in-north-austin-
hire-5000-new-employees/
Froud, J., Johal, S., Leaver, A., & Williams, K. (2014). Financialization across the Pacific:
Manufacturing cost ratios, supply chains and power. Critical Perspectives on
Accounting, 25(1), 46-57.
Kane, G. C., Palmer, D., Phillips, A. N., Kiron, D., & Buckley, N. (2015). Strategy, not
technology, drives digital transformation. MIT Sloan Management Review and Deloitte
University Press, 14, 1-25.
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.
Lasserre, P. (2017). Global strategic management. Macmillan International Higher Education.
Morschett, D., Schramm-Klein, H., & Zentes, J. (2015). Strategic international management (pp.