WAL WMBA - Apple Inc's Sustainable Business Practices & Strategies

This case study analyzes Apple Inc.'s sustainable business practices and strategies within the competitive smartphone industry. It evaluates critical competitive forces like competitive rivalry and bargaining power of buyers, assessing their impact on Apple's strategic position. The analysis incorporates the Blue Ocean Strategy framework, examining how Apple has created uncontested market spaces through innovation. The study identifies potential threats from new entrants and substitutes, particularly in smartphone innovation, and suggests strategies for maintaining a competitive edge. Key recommendations include leveraging design capabilities and developing unique hardware and software to differentiate from competitors. The report emphasizes the importance of continuous innovation and strategic adaptation to sustain Apple's competitive advantages.

Running head: SUSTAINABLE BUSINESS PRACTICES AND STRATEGIES
Sustainable Business Practices and Strategies
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1SUSTAINABLE BUSINESS PRACTICES AND STRATEGIES
Table of Contents
Evaluation of Critical Competitive Forces..........................................................................2
Explanation Regarding the Selection of Critical Forces......................................................5
Assessment of Blue Ocean Strategy....................................................................................6
Explanation Regarding New Entry or Substitute Threats....................................................9
Strategic Implications of Competitive Forces.....................................................................9
References..........................................................................................................................11

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Evaluation of Critical Competitive Forces
Competitive strategies developed by Apple Inc are deemed to be relied on the
requirement to deal with the external environment forces as such forces can affect its shares and
revenues (Al-Arafati, 2016). The competitive forces along with the underlying dynamics within
the Smartphone industry that might threaten Apple Inc are explained below:
Figure 1: Five Forces Analysis of Apple Inc
(Source: Apple., 2018)

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 Competitive Rivalry (Strong Force): Apple Inc faces strong force of competition. The
five forces analysis indicates the intensity of the impact competitors have on one another.
In the company’s case impact is relied on the external factors such as increased
aggressiveness of companies and low switching cost (Chiang, 2016). Competitor firms
including Samsung, Blackberry, LG ad few more are observed to give tough competition
to Apple Inc. This type of aggressiveness is evidenced in rapid innovation, aggressive
advertising along with imitation. Moreover, low switching cost indicates that it is simple
for its consumers to shift from Apple Inc to other brands that indicate tough competition.
This indicates this force make a significant contribution to strategic formulation of Apple
Inc.
 Bargaining Power of Buyers (Strong Force): This force is deemed to impact Apple
Inc’s business as it indicates the way buyers’ impact its business (Fitzpatrick, Nguyen &
Cayan, 2015). In the company’s case, strong power of buyers is relied on factors such as
low switching cost and small size of individual buyers. It is easy for the buyers to shift
brands that make them powerful in compelling Apple Inc to maintain high consumer
satisfaction. Moreover, purchasing power of individual buyers is strong compared to the
company’s overall revenues. Such situation makes its consumers weak at individual
level. Conversely, as it is simple to shift from Apple to other brands, buyers are observed
to attain higher force (Grant, 2016).
 Bargaining Power of Suppliers (Weak Force): Apple Inc observes weak force in this
factor as porters five forces model indicates the impact of suppliers in imposing their
demands. In the company’s case suppliers’ weak power is relied in certain external
factors such as high overall supply and increased number of suppliers. Even if Apple has

4SUSTAINABLE BUSINESS PRACTICES AND STRATEGIES
less than 200 component suppliers for its products, it has several options as there are
numerous suppliers worldwide (Revon, 2016). Such situation makes individual suppliers
weak in imposing demands on Apple Inc. Moreover, there is high supply level for most
of the Apple Inc product components. This indicates the company does not require giving
much importance to this force in developing strategies for industry leadership and
innovation.
 Threat of Substitutes (Weak Force): This is a weak force that can impact Apple Inc’s
business as the porters five forces model indicates the strength of substitute goods in
attracting consumers (Khan, Alam & Alam, 2015). Substitutes impose a weak force on
Apple Inc relied on factors such as high availability of substitutes and low performance
of substitutes. Substitutes of Apple Inc products are available in the market. For instance,
individuals can easily employ digital cameras rather than iphone to click pictures. They
might also employ landline telephones to make calls. In addition, these substitutes have
low performance as they have limited features. Several consumers might rather employ
Apple Inc products due to its innovative features (Kim & Mauborgne, 2004). Substitution
has weak force in impacting the company’s business and this threat is not important to be
focused by the company in developing strategies like marketing and product design and
development.
 Threat of New Entrants (Moderate Force): Apple Inc experiences moderate force on
this factor as this indicates the impact and possibility of new competitors to enter into the
market. New entrants might have a moderate force relied on the external factors such as
increased capital requirements, high brand development costs and capability of likely
new entrants (Kim & Mauborgne, 2014). Initiating business to compete with Apple Inc

5SUSTAINABLE BUSINESS PRACTICES AND STRATEGIES
needs increased capitalization. Moreover, it is also costly to develop a strong brand for
competing against strong companies like Apple Inc and these factors makes new entrants
weak. However, there are some renowned companies that have financial ability to enter
market and pose a threat to Apple Inc. For instance, Google has implemented such
strategy through offering products line Nexus Smart phones (Kim & Mauborgne, 2015).
Explanation Regarding the Selection of Critical Forces
Among the identified vital critical forces, major focus is deemed to be considered on two
forces that includes competitive rivalry and bargaining power of buyers as there are observed to
have strong impact on Apple Inc. Considering the analysis of five forces, it has been analyzed
that the company must develop effective competitive strategies based on competitive rivalry and
bargaining power of buyers (Kim & Mauborgne, 2014). Such evaluation supports the company’s
current position of regular innovation. Apple Inc is evidenced to effectively deal with these two
major forces within the external environment. This can facilitate the company in strengthening
its strategic position among competitors that can further attract consumers to Apple products.
Competitive rivalry can pose a threat to the company’s performance as certain well established
rivals such as Google and Samsung can draw attention of Apple Inc’s consumers (Moutinho &
Phillips, 2018). For instance, Google has implemented such strategy through offering products
line Nexus Smart phones. Samsung android smart phones were highly accepted by consumers.
Therefore, large companies have potential to directly compete with Apple Inc and pose a threat
to its business sustainability. Bargaining power of buyers is high as it is easy for the buyers to
shift brands that make them powerful in compelling Apple Inc to maintain high consumer
satisfaction. For instance, consumers prefer smart phones from Samsung and Redmi as they are
attaining identical features at affordable prices (Porter, 1975).

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Assessment of Blue Ocean Strategy
Evaluation of potential new entry or competition based on effective substitutes can be
explained through evaluation of Apple Inc’s blue ocean strategy. Blue ocean strategy framework
is employed by Apple Inc in order to explain the strategy canvas and four actions framework
(Purkayastha & Sharma, 2016). This can further explain value innovation that focuses on the
elements of service or product offering on which companies in the industry compete.
Figure 2: Strategy Canvas of phone
(Source: Purkayastha & Sharma, 2016)
From analyzing the four actions framework and strategy canvas of Apple Inc it is
gathered that the company generated future growth and profits by not exposing the existing
demand but by reconstructing industry boundary. This is for generating new market space and

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unlocking talent demand (Rawson, Duncan & Jones, 2013). Blue ocean strategy analysis of the
company indicated that certain disruptive innovations such as iTunes, iPod, iPhone and iCloud
has not just attracted consumer attention but has also made them an essential part of individuals’
lives. Profitability and revenue growth of the company can be attributed to its blue ocean
strategy. This is for the reason that brand has regularly redefined industry boundaries, generated
uncontested market space and its products always centered on delighting its consumers (Rawson,
Duncan & Jones, 2013). Products developed by Apple Inc decreases issues, increases
functionalities along with generating need for consumers that makes them use the company’s
products over long duration.
Figure 3: Four Actions Framework for Apple

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(Source: Fitzpatrick, Nguyen & Cayan, 2015)
The four actions framework for Apple Inc can be explained in case of iPod based on
consumer experience. The company focuses on eliminating the issue of difficulty in text
messaging through use of keyboard and developing mouse. The company has keyboard
configuration screens that have advanced options such as touch screen (Rothaermel, 2016).
Apple Inc focused on eliminating its product malfunction that was recognized in the chip that
facilitates in managing operation status of its devices. Such design deficiency was easily repaired
in its future models of iPhone through replacing its operations chip.
Apple Inc has also focused on reducing the difficulty of its consumers in carrying
different products such as MP3, PDA and phone for addressing their different needs. The
consumers also face with the difficulty of user interface-make touch screen (Rothaermel, 2014).
Considering such issues, Apple Inc has launched iPhone 3G in reducing such concerns that has
facilitated the brand in attaining competitive advantages.
iPhone developed by Apple Inc has focused on raising the competitive advantages
through advancing its product features of improved navigation and user interface, application
games along with wireless internet use strategy (Kim & Mauborgne, 2014). The brand developed
Macs that is best personal mobile phones in the world with all in one features with app store and
iPhone features. In raining the competitive benefits for its consumers, Apple Inc have combines
the features of their different products like iPod photo view and music playback within the
iPhone.
To attain competitive advantages, Apple Inc has considered developing devices that
facilitates its consumers in downloading music directly along with having simple interface with

9SUSTAINABLE BUSINESS PRACTICES AND STRATEGIES
sleek design (Kim & Mauborgne, 2014). IPhones from Apple Inc has been re-developed that has
data storage, internet along with computer dissemination abilities along with features of PDA
that is compact and has quick access.
Explanation Regarding New Entry or Substitute Threats
Based on the blue ocean strategy frameworks explained in the above section Apple Inc is
deemed to focus on a particular new entry or substitute threats that can impact the sustainable
position of the company drastically. It is gathered that the company might deal with threat of
new entrants and substitutes on the area of its Smartphone innovation from Microsoft and Sony
as they come up with surprisingly better technology and product (Fitzpatrick, Nguyen & Cayan,
2015). For attaining competitive advantages, Apple Inc must focus on “Create” factor of its four
actions framework through its continuous focus on research and development. Product
innovation aspects poses a threat for Apple Inc as its competitors like Blackberry, Samsung,
Google and Microsoft comes with similar smart phones offered by Apple Inc at a low price and
with modified features. Even though phone of Apple Inc has a design of utilizing a lot of features
in just one gadget, its business rivals are still capable to combine the vital features of phone in
adorable prices to increase their sales. For instance, Galaxy Note 7 attained competitive
advantages over iPhone 7 because of its OLED sharp display technology and LTE capable smart
watch ticker in lower prices posing threat to sales of iPhone.
Strategic Implications of Competitive Forces
Strategic implications of the competitive forces identified above will be focused on in
explaining the threats and opportunities to the Apple Inc’s position through developing an
effective strategy. Apple Inc must focus on employing its strategic ability and efficiency in

10SUSTAINABLE BUSINESS PRACTICES AND STRATEGIES
designing and developing in own hardware and application software in order to attain
exceptional and different competitive advantages (Fitzpatrick, Nguyen & Cayan, 2015).
Strategies must be developed by Apple Inc in consideration to the identified competitive forces
such as bargaining power of buyers and competitive rivalry. To attain a competitive edge of its
identified major competitors, Apple Inc must generate new categories of its products through
focusing its unique capability of designing Apple products with its ordinal design manufactures
that drives innovation. Such unique and non-imitable capability of using its own software to
design products and cross-branding through developing Apple Watch or Nike Plus can facilitate
the company in attaining competitive edge.
Through dealing with the threat of buyers bargaining power, Apple Inc must focus on
recent consumer preferences. To decease switching to different brands all the demands of the
consumers must be addressed by Apple Inc gadgets. Certain innovations based on recent
consumer demands might include tablet with USB port (Purkayastha & Sharma, 2016).
Addressing product based issues through maintaining operating stability, enhancing hardware
quality along with increasing availability of applications and software programs are necessary.
This can facilitate Apple Inc to maintain its sustainable market reputation. Another strategy for
dealing with switching costs is through making its devices compatible with just software
developed by them. For instance, Apple software and media can only work on Apple devices.
The company can make available a number of purchasing plans for its iPhones.

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References
Al-Arafati, A. (2016). Customer Relationship Management and Five Forces Analysis in
Nonprofit Organization in Oman. International Journal of Scientific and Research
Publications, 6(1), 436-440.
Apple. (2018). Apple. Retrieved 31 March 2018, from https://www.apple.com/in/
Chiang, C. H. (2016). Securing healthcare's quantified-self data: a comparative analysis versus
personal financial account aggregators based on Porter's Five Forces Framework for
competitive forces (Doctoral dissertation, Monterey, California: Naval Postgraduate
School).
Fitzpatrick, B. D., Nguyen, Q. Q. A., & Cayan, Z. (2015). An Upgrade To Competitive
Corporate Analysis: Creation Of A" Personal Finance Platform" To Strengthen Porter's
Five Competitive Forces Model In Utilizing. Journal of Business & Economics Research
(Online), 13(1), 54.
Grant, R. M. (2016). Contemporary strategy analysis: Text and cases edition. John Wiley &
Sons.
Revon, R. M. (2016). Contemporary strategy analysis: Text and cases edition. John Wiley &
Sons.
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.