University Case Study: Apple Inc. External Environment Analysis

This case study examines Apple Inc.'s external environment, focusing on macro-environmental factors and Porter's Five Forces model. It analyzes various aspects including cultural, technological, and physical environments, alongside competitive rivalry, customer bargaining power, supplier power, threat of substitutes, and new market entrants. The study explores Apple's environmental initiatives, political activities, and technological challenges. It also discusses the company's strategic options and provides recommendations. The assignment highlights the impact of economic factors, technological advancements, and competitive forces on Apple's business strategies and market position, offering insights into the company's evolution and future prospects within the global electronics market. The study analyzes the company's response to environmental concerns, technological shifts, and competitive pressures, concluding with recommendations for future strategic directions.

Running head: CASE STUDY
Case study
Name of the student
Name of the university
Authors note

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Executive summary:
The above study deals with different aspects related to the various aspects of
environmental rules and regulations. The study discuses different models related to
environmental model and porters five force model which play an important role to improvise
and implement the rules.

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Table of Contents
Introduction:...................................................................................................................3
Discussion:.....................................................................................................................3
Cultural environment:................................................................................................5
Technological environment:.......................................................................................6
Physical environment:................................................................................................6
Porters five force model of apple Inc:....................................................................6
Competitive rivalry :..............................................................................................7
Customers bargaining power:................................................................................8
Bargain power of suppliers:...................................................................................8
Threat of substitute:................................................................................................9
New market entrances:...........................................................................................9
Recommendations:.......................................................................................................10
Conclusion:’.................................................................................................................11
References:...................................................................................................................12

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Introduction:
The above study deals with the various factors which have played an important part
in defining the stakeholder’s rules and policies of apple incorporation which is one of the
world’s biggest multinational electronic gadgets and appliances seller and manufacturer. The
study also deals with the different macro level economic rules and regulations that is also
known as macro environmental model. On the other hand in order to explain industry average
of apple inc, porters five forces model have also been utilised. Lastly the study also provides
certain recommendation regarding the key aspects of the company.
Discussion:
Apple Inc., incorporated by Steve jobs is a 30 years old company and it is the
brainchild of Steve jobs himself. However apple has expanded from computer to consumable
electronics and a lot of change have been incorporated during that point of time. The
company had been converted from apple computer Inc. to apple Inc. The main products
which they sale are I pod, MacBook pro and mac g4 cube. However in marketing the
economic environment had been playing a significant role and it is mainly concerned with
purchasing power of customer and spending patterns. As per high economic growth which
had led to increase in marketing boom. Thus marketing plans are been influenced by many
important economic items like current income, price, savings and credit. Hence the major
source of incomes and consumer spreading in the market are known as marketers. Hence
there are certain economic factors for apple inc which had been compared for 2008 in respect
of 2009. It is seen that the sale of ‘I phone” and I pod have been increasingly sold. However
the sales of personal computer have been decreased about 8% in 2009. The company had
added some new feature in their latest I phone including software upgradation due to the
macro economic improvement the company had been able to increase the revenue by 10 %.
Since 2006 apple had been having focus to the environment. The products looked to emit

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greenhouse gas. Hence it is seen that most of the gas emitted are 95% from the vehicles and
5% of the electronic gadgets. Hence everyday operations and environmental impacts are
carefully applied by apple. Thus the energy emission reduces carbon emission. It have
introduced recycling methods and waste composition could control carbon emission foot
print. However the renewable energy have reduced to 100 percent of the renewable sources.
Thus the environmental, health and safety measurement are done to impact on the services.
However the company is thinking of new innovative ideas and changing the old products by
new one. The factors and trends relating to innovations could affect the development of the
company. Hence advanced technologies can bring to latest industries and it gives rise to new
and advance business techniques. Thus the marketers could constantly monitor the vocational
environmental training and thus could look to provide the potential customers and marketers
should comply and constantly monitor vocational environmental training to gain better
opportunities. Hence as far as the macro environmental model is concerned the company
have implemented two types of environment namely-
political environment:
It consists of laws, governmental rules and regulations as well as for government
agencies and pressure groups could influence and limit various organisation and individuals
in society. Hence the socio economic environment is fully related closely to any political
reasons. Hence the governmental perspective on the economy, culture, religion and business
ethics. Thus Apple Company had invested $580000 since 2002 for political activities. The
company cost can be determined by reporting the state level cannot be misguided. Thus it had
publically failed to disclose political issues. Hence for a company like apple it is important to
act as a public solicitor to the members of American Electronics Association ( AEA). It
represents the basic technological segments and apple is dealing with some sophisticated
economics value. Hence by going through this process that the governance in state, federal

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and international level, focusing on the current business opportunities and capital issues being
provided to offer the customers services and going through different networking problems.
Cultural environment:
This kind of environment is mainly concerned by the people’s behaviour and trend setups.
It also adds cultural values like values, ideas, attitudes, beliefs and the populations of the
subgroups which had immensely affected the consumers after purchase behaviour. Hence the
cultural characteristics and trends are been enlisted within different markets are been
carefully understood by the company. However apple incorporation basically targets the
young generation with more advanced techniques to implement advanced technologies. The
I phone, I pad and apple computers buyers are spread worldwide. The company’s target
includes almost all the sectors of the society. Hence for the younger and older generations the
company have been decided to add back gadget software’s and colour which could add some
more value to the business. Hence these kind of target market have been very much essential
to determine the socio economical business model. Thus through this technique the company
have been able to attract more number of customers all over the world. Hence it is proven to
be a good way of technique to implement within the company and as well as through this
process the apple inc tries to take care and safeguard the environment a lot. However this
process is also majorly been applicable to most of the big countries in the world like UK and
US and these countries are using basically apple products from laptop to I phone to I pod.
Hence it is been highly expected that most of the forthcoming generation will be having an
access over apple products.

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Technological environment:
Being a global market leader apple fails to realise that people could easily switch over
to other branded products. Since apple does not like to bring bigger changes to their
newly launched products rather than the old products, therefore most of the apple lovers
have been switched over to other companies and hence the resultant outcome was hard for
the company to swallow. For example, goggles open ended source operating system has
been resulted to switch over to other companies and for that case Sony xperia or HTC
ONE or Samsung had gained over advantage.
Physical environment:
Apple had always found ways to reduce range of carbon remittance and to reduce
carbon footprints. Hence they have a positive environment. However there are a very few
disagreements with the environmentalists since products usually follows all the products
and environment. Thus apple packing is specifically made of plastic or glass which could
have recycled and few of them are distributed to cardboard box.
Porters five force model of apple Inc:
Apple Company have achieved success as one of the most valuable companies in the
world. Hence in order to describe the industrial policies and process, the company
strongly recommends to process porters five force model which analyses the internal as
well as the external factors. It is a strategic tool for evaluating the effect of the business
organisation such as customers, suppliers, substitutes and new entrains to the company
which could be harmful in every case. However in respect of apple inc the porters five
force model determines leadership qualities towards the competitors landscape over
software and hardware consumer electronics and other online digital distribution changes
to the process. Hence this company had become a dominant distributor over the other

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companies like Walmart, amazon, Samsung, dell and Sony. Thus under the five force
model the company had addressed competition and bargaining power of the customers. It
is been considered as most significant external power to the business and these five force
model put a lot of importance to the two of the external factors and to keep the leadership
in the company. Therefore the main strategy of apple are partly based on the needs to
address the forces related to the external environment hence these environment could
limit or reduce the firm market share, revenues s profits and business potentials. Hence
the five force analysis of porter deals with the below aspects. These are as follows-
Competitive rivalry :
Apple forces a strong force of rivalry or competition. Hence the components of the
five force model of porter determines or describe the influence or intensity which the
corporates and competitors have for others. In case of apple the influences are based on
external factors. These could be like-
 High firm aggressiveness.
 Low product differentiation.
 Low switching cost.
However the companies like Samsung and LG try to compete with apple. The
company lies on rapid innovation, aggressive advertising and imitation, putting a strong force
towards industry environment. Moreover in the terms of product differentiation the product
market are generally similar to specific purposes. For example the android services to the
devices as well as IOS device as cloud base services from different companies to different
people. Hence this process could create a strong force by making it easier for customer. On
the other hand for low switching cost means it is easy for the customers to switch from apple

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to other brand, based on price, function. Accessibility and the other major external factors to
provide strategic management.
Customers bargaining power:
The bargaining power of customers are considered as a strong force towards the business.
Hence the components of porters five force model determines the how the buyers purchase
decisions and related preferences and participation is made in the business. Hence in a case of
apple there are following below factors could be considered-
 Low switching cost.
 Small size of individual buyers.
 High buyer information system
It is very easy for the customers to change brands. And hence thus by making the process
powerful and satisfied to the employees. Thus the process could indicate that the customers
could be weaker at different level. Hence the competitors’ products enable the buyer to share
a strong force on apple and other brands and thus they must include the bargain power of
suppliers and to implement strategic variables.
Bargain power of suppliers:
The company experiences the wee force to bargain the power of suppliers. Hence the
components of this model indicates the influences of supplier who are imposing the demands
of the company as well as the competitors. In case of apple the suppliers have as weak
bargaining power based on the below external factors-
 Moderate to a high number of suppliers.
 Moderate to high number of overall supply.
 High ratio of firm concentration to supplier concentration.

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The supply chain of the company is vast and there are options to access more
suppliers around the world. Hence the high number of suppliers have an external factor
which presents a force to determine the company value. Also the supplier’s ratio determines
the influence of the company. Thus in this way the company looks to develop the strategic
management process, value chain analysis, innovation and industry leadership (Blundell, et
al.,2016)..
Threat of substitute:
The competitive threat of substitution is very quick in affecting apple companies
computing techniques, consumer electronics and online service business. Hence the porter
five force model deals with substitute products for attracting customers. Hence for apple the
substitutes for workforce is highly based on the external factors like-
 Moderate to high availability of substitutes.
 Low performance of substitutes.
 Lowe buy propensity to consume.
However there are some substitute of apple products which are available to the market.
For example, instead of using iPhones, people can use digital cameras to take pictures, and
landline telephones to make calls. In Porter’s Five Forces analysis model, this external factor
brings a moderate force in the industry environment. However, these substitutes have low
performance because they have limited features. Hence many customers could recommend
apple products since they are convenient.
New market entrances:
The company initially faces the threats of new entrants all the time. Hence the
components of porters five force model tells that there are a lot of possibilities of having new

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competitors in the market. In the case of apple In the experiences in the components of the
possibility of new competitors exert a model based on the following external factors:
 High amount of capital requirements.
 High brand development cost.
 New entrants.
Hence it is important that apple Inc. requires high capitalisation value as well as extreme
amount of value development against large companies like apple. Hence the external factors
make new entrants week and large firms could try to increase market capacity. For example
goggle have availed the same in the case of nexus phones (Rothaermel, 2013)..
Recommendations:
The internal and external factor have been discussed in the analysis indicate that apple
inc, process major strength and weakness to process and address organisational weakness.
And the company can use all the strength and opportunities. Such as expansion and of its
distribution network. Moreover, the company can use its strong brand image and innovation
processes to successfully develop and launch new product lines. However, Apple faces the
significant threats of aggressive competition and imitation, which are major challenges
affecting players in the global market for consumer electronics, computer hardware and
software, and online digital content distribution services.
Based on the strategic issues highlighted in this SWOT analysis of Apple Inc., a
recommendation is to continue the aggressive and rapid innovation involved in developing
the company’s products. Such innovation reduces the adverse effects of imitation on
revenues. Also, it is recommended that the company further enhance the automation of its
production processes, and support the automation of its contract manufacturers, as a way of

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addressing the rising labor costs involving Apple product manufacturers. Another
recommendation is to establish partnerships with more distributors to improve the overall
market reach of the company’s distribution network.
Hence in short the recommendations for apple to improve the strategic level are as
follows-
Firstly the company could try to implement hybrid security process which had been
incorporated by cost leadership and differentiating strategy which could continuously
outsource strategy and promote economics of scale and develop marketing services (Khan, et
al.,2015).
Secondly apple could persist the switcher campaign, focus service strategy of the
customer and aggressive advertising strategy of the customers and driving the path towards
Microsoft to apple and try to expand the whole market share.
Thirdly the company could look to not only lever existing competencies to complete
the consumer electronic market, but could look to compete in consumer electronic market
and fight for pre dominance , self enhancement and not edging to the market besides I pod
series products.
Conclusion:’
Hence from the above study it can be concluded that the apple Inc. is a big company
and there are many ways in which the whole process could be taken care of. on the other
hand the company could look to improvise the major aspects like environmental method to
look into the matter of environmental health and policies. On the other hand the porters five
forces model is important and have an important part to make industrial average of the
business of apple (Lakso, 2018).