LCBS5001 Strategic Management: A Strategic Report on Apple Inc.

This report provides a comprehensive strategic analysis of Apple Inc., examining its business strategies and competitive positioning. It includes a PESTLE analysis, SWOT analysis, Porter's Generic Strategies, Bowman's Strategy Clock, and Blue Ocean Strategy to assess Apple's current strategic position. The report also discusses Apple's supply chain, competitive advantages, operational strategies, product line, product life cycles, and pricing strategies. Furthermore, it employs the Ansoff Matrix and BCG Matrix to evaluate growth opportunities and portfolio management. The analysis identifies potential issues such as increased competition, currency fluctuations, and the need for physical retail presence. Recommendations are provided to enhance Apple's strategic position, including opening retail stores and implementing strategic fit to reduce product prices. This report aims to provide valuable insights into Apple's strategic management and areas for improvement.

Running Head: STRATEGIC MANAGEMENT
STRATEGIC MANAGEMENT
Students ID:
Name of the University
Authors Note

1
STRATEGIC MANAGEMENT
Executive summary
Apple Inc. is a technological company that designs produces and manufactures different
computer goods, music and telecommunication devices. The company is highly differentiated
in the market owing to its premium prices and devices. Based on the organisation the
subsequent report highlights the business strategy of Apple Inc is studied is detail in the form
of an individual strategic analysis report. After selecting the company for this report, the
choice of the company is justified followed by mentioning the background of the company.
This report also analyzes the current strategic position of the company, Apple Inc by using
different models. Potential issues are also highlighted in this report based on which suitable
recommendations for improving the strategic position of Apple Inc are also mentioned. Based
on the problems the company needs to focus on the development of the strategy and products.
Challenges such as increased competition and fluctuation of currency may influence the
productivity of the company. Therefore, the company has to be well aware of the problems
for sustaining its popularity in the market. The findings of the research are that Apple needs
to open retail store for customers so that physical evidence of the products sold by the
company can be gained. At the same time, application of strategic fit linking two products
can help Apple to reduce the prices of the products.

2
STRATEGIC MANAGEMENT
Table of Contents
Introduction................................................................................................................................4
Analysis PESTLE Analysis........................................................................................................4
Political factors.......................................................................................................................4
Economic factors....................................................................................................................5
Social factors..........................................................................................................................5
Environmental factors............................................................................................................7
SWOT........................................................................................................................................8
Strength...................................................................................................................................9
Weakness..............................................................................................................................10
Opportunities........................................................................................................................10
Threats..................................................................................................................................10
Porter’s Generic strategy..........................................................................................................11
Bargaining power of the suppliers........................................................................................13
Bowman’s strategy Clock........................................................................................................13
Blue Ocean strategy.................................................................................................................14
The Apple mobile phone industries in the early decades.....................................................16
Apple’s Supply chain strategy.................................................................................................16
Competitive advantage of Apple..........................................................................................17
Operation strategy of Apple.................................................................................................17
Product line strategy of Apple..................................................................................................18
Product life cyles:.................................................................................................................18
Strategy of Pricing................................................................................................................19
Ansoff Matrix for Apple..........................................................................................................19
BCG Matrix for Apple.............................................................................................................20
Conclusion................................................................................................................................20

3
STRATEGIC MANAGEMENT
Recommendations....................................................................................................................20
Reference list............................................................................................................................22
Appendices...............................................................................................................................26
Appendix 1: sale ratio...........................................................................................................26
Appendix 2: Turnover ratio..................................................................................................26
Appendix 3: Bowman’s Clock strategy................................................................................27
Appendix 4: Ansoff’s Matrix...............................................................................................27
Appendix 5: BCG matrix......................................................................................................28
Appendix 6: Porter’s value chain.........................................................................................28

4
STRATEGIC MANAGEMENT
Introduction
This report aim towards developing an understanding and analytical skills for the
business strategy for a selected company. The company selected for this report is Apple Inc.
In this report the business strategy of Apple Inc is studied is detail in the form of an
individual strategic analysis report. After selecting the company for this report, the choice of
the company is justified followed by mentioning the background of the company. This report
also analyzes the current strategic position of the company, Apple Inc by using different
models. Potential issues are also highlighted in this report based on which suitable
recommendations for improving the strategic position of Apple Inc are also mentioned.
Apple Inc is multinational organisation, which is head-quartered in USA. It is one of
the third largest technology corporation and deal in the world and second largest smart phone
organisation. From the Reuters report it has been found that Apple Inc. has been founded in
the year 1977 incorporated with innovative designs, manufacturers and market of mobile
technologies, media devices, computer and portable digital players (Reuters 2018). Along
with this, the company sells different related software services and peripherals as well
networking services and applications.
The company at their initial stage was focused on developing and selling personal
computer along with other software products such as Apple Mac and apple products. These
are the major facts for Apple Success that can be calculated in the year 2016. However, after
Steve Jobs, Tim Cook has proved to be the worth of leadership strategy. Apple has turned in
to the market leader with an annual record of $176 billion of market profit in the year 2016
with a dramatic increase in their revenue that is 87% higher from the second place-leading
organisation Google (Apple United Kingdom 2018).
Analysis
PESTLE Analysis
Political factors
 Political difficulties will continue to haunt the company specifically, EU inclining on
taming the technological giant industry.
 In the August 2016, EU announced that Apple has $14.5 billion in terms to taxes that
is needed to be paid to Ireland.
 Apple tax conflict in EU may also pose as a threat to Australian and US relationship.
However, Apple is consistently feeling that they are being targeted in an unfair way.

5
STRATEGIC MANAGEMENT
 In this context, Apple is one of the largest taxpayer and this kind of political issues
may highly influence on the revenue of the Company.
 Most of the sales contribution of Apple comes from the external sources that accounts
for almost $113.8 million whereas the revenue from the home country is almost $68.8
million. Therefore, any of the political surges in the countries may influence the sales
of the company in a negative way.
 EU has kept on targeting the large technological organization such as Amazon,
Google and Apple. Therefore, these might mean a large tax pressure and decline in
profits for the large technological giant.
Economic factors
 The importance of the Asian market has increased. Therefore, China and India both
have emerged as the significant market that is significant for the western brands.
 However, in case of Apple the products, they are originally renowned for its finest
process that means they are not suitable for low-end market.
 However, Zhang (2017) states that apart from the developed areas, consumer in
Australia is highly sensitive to price that may be a necessary factor influencing the
sales of Apple.
 Increase competition may also affect Apple that may lead to the loss of significant
share in the market such as Lenovo and Pc sales.
 Moreover, Australian Dollar has grown stronger from the period of recession that
shows that there may be loss of profit for the company in the international scenario.
Social factors
 Globalization has expanded the use of virtual world and the existing lifestyle are
limited factors that has left and huge effect on Apple.
 In this context, Apple has always been one of the leading organizations in the global
scenario.
 This activity however, has nothing to do with iPhone and IMac. As stated by Garcia-
Sanchez et al. (2015), they use the strategy for making their service and product
unique and innovative in design along with simplified marketing process of their
product.
 These, entire strategies make Apple in to a more desirable product for the customers.
Eventually the product has turned into a symbol of social status mainly due to is
extremely high prices that are limited for the high-class people.

6
STRATEGIC MANAGEMENT
 In case potential market growth Apple have always seen growth in consumer
expenditure in their future decades in different third world countries such as Africa
where people have never been much aware of the products.
 The organization therefore, has the capability to penetrate the unexplored market and
has the ability to harbor new opportunities of obtaining shares (Luo, and Bu 2016).
 Moreover, in order to satisfy the demands made by the customers, the brand has made
several acquisitions such as Embark Prime sense, Tosy and several partnerships with
Sony, Motorola, and Phillips.
 In this way, the social background of the various brands has played a crucial role in
the organizational operations.
Technological factors
 The stakes of information technology has always remained higher in comparison to
the relative industries when it comes to the accomplishment of revenues.
 This organization has innovated themselves with the passage of time and has managed
to earn well-established profit.
 In this context, Apple has undoubtedly earned all of them. However, in the year 2013,
Apple has unveiled a strong deal with China for bringing IPhone products to the
customers in the market by dominating low cost android smartphones. Therefore,
these deals provided the company with a wider entry to the Chinese market.
 Moreover, Apple is known mostly for its stunning concept of design. In this aspect,
the company has created some of the finest and most eye catching designs for the
development of their products that the contemporary companies could not much.
 However, Vecchiato (2015) states that with gradual change in the technological
advancements consumers are increasingly giving more preferences for larger screens.
 Apple’s direct rivals such as Samsung and Google are now delivering the products
and services that has been a mark of Apple.
 Apple acquired almost less than a year for developing imbursement Google app for
just developing Apple pay. These activities made the product of the company unique
for Apple. However, their competitors increasingly showed the capability to imitate
its products that could threat Apple.
Legal factors

7
STRATEGIC MANAGEMENT
 Apple has been operating globally that makes them vulnerable to several legal
regulations as well as litigation.
 In case of domestic stress Apple has been increasingly going through legal stress
within its homeland, America.
 For example, in the year 2012, the company managed to restore its imports of some of
their used part iPhone that was previously banned by the government of US.
 According to Kormishkina et al. (2015), government in various countries is
increasingly identifying the privacy issues that are highly connected to the use of
digital technology.
 Due to this, more regulations on privacy issues and products exportation are imposed
on the large business such as Apple.
 This growing factor has turned in to threat due to is innovative challenges in the
development of the products that involves with the sharing if confidential information.
 These factors may as well be the growing opportunity for the company while helping
them in enhancing the features of the product that will protect the privacy issues of
the customers (Thai and Turkina 2014).
 In addition to this government in various location are imposing stringent regulations
of telecommunication which are threat as they could significantly restrict the use of
Apple products.
Environmental factors
 As stated by Liddle (2014) there may be various environmental factors such as
disposal that may influence the revenue of the company as well as brands.
 However, Apple has tried to counter various massive problems of discarding
electronic junk device that are used in non-working position.
 The company may face huge problems related to discarding the electronic devices that
contains lithium batteries in it. It may cost the companies high expenses.
 However, Apple Inc. may be forced to incur the expenditures due to the
environmental issue associated with it. Apple is addressing the environmental issues
for maintaining the sustainability of business through the process of recycling and
associated programs. For example, waste disposal and sustainability of batteries. The
Recycling program by Apple Inc operates in 95% of the countries where they have
business and accepts old computers, e-wastes and monitors and printers free of

8
STRATEGIC MANAGEMENT
charge. In addition to, Apple Inc use recycled tin in its phone, 35% post consumer
recycled plastic and 32% bio-based plastic for the frame around the cover glass.
 Moreover, the company consistently seeking for new technical solution for enhancing
energy effectiveness of Apple like enhanced batteries, processes that emits less
amount of here.
 On the contrary, Fleisher and Bensoussan (2015) states that trend of employment
rights may influence the global business arena.
SWOT
Strength
 Apple is one of the most valuable and
strongest companies in the world.
 The organisation also follows a
strategy of high prices such as
Bowman’s strategy clock.
 Invest a lot in the R&D that is higher
than their competitors.
 Effective process of innovation.
 Apple features are lying at the top of
Forbes most valuable list in the
world.
Weakness
 Provides pressure on the innovation
in product design as well as quality.
 High cost of product also leads to the
fall in market share.
 Major issues in their management
operations related to inaccurate
demand forecast, higher component
limitation, lower rate of production
and delay in last minute changes.
 Company has a limited portfolio in
comparison.

9
STRATEGIC MANAGEMENT
Opportunities
 Opportunities to introduce new
products for increasing their size of
the product folio as well as market
share.
 They can establish more acquisition
for expanding their customer base and
their ecosystem.
 Opportunity to invest in sustainable
technology that are grown from
power and transport for seeking fast
growing popularity.
Threats
 Competition are high in the areas if
laptop and smart phone production.
 The company has not witnessed any
kind of sales like the top brands in the
recent year.
 Global increase in dollar has resulted
to reduction of profits for Apple.
 The legal compliances in the
technology have also added to the
operational cost of brands leading to
pressures and losses for the brand.
Strength
Apple is one of the most valuable and strongest companies in the world with a strong
brand image. This aspect of the company shows that they have the capability to introduce
new product in the market provided with high sales relying on the strong brand image. The
organisation also follows a strategy of high prices such as Bowman’s strategy clock that
offers them the opportunity to gain a high profit in the marketing depending in the different
consumers in the market. They invest a lot in the R&D that is higher than their competitors
are that helps them to gain competitive advantage in the market (Papachroni et al. 2015).
Bowman’s strategy clock

10
STRATEGIC MANAGEMENT
The company is mostly known for their effective process of innovation that helps
them to stay up dated with the latest technologies thereby allowing them to ensure
competitive advantage. Apple features are lying at the top of Forbes most valuable list in the
world. In terms of strategic concepts, the company has almost 470 of its own subsidiaries
across 17 countries. Apart from these, they sell through their trade suppliers, online partners
and through its premium retailed subsidiary (Ansoff 1965). The company spends huge
financial resources on their research and development department that facilitates improving
the previous products of Apple Inc along with introducing new products in the market. This is
the reason Apple Inc launches new products at regular interval in the market. In addition to,
Apple Inc are also seen to incorporate new features to the existing products and make it
available to the market.
Weakness
Apple’s premium brand image also provides pressure on the innovation in product
design as well as quality. High cost of product also leads to the fall in market share for the
company thereby leading to challenges in terms of low economic activity. The company has
major issues in their management operations related to inaccurate demand forecast, higher
component limitation, lower rate of production and delay in last minute changes (King and
Baatartogtokh 2015).
Opportunities
Since, the company has limited product portfolio in comparison to their competitors,
they have the opportunities to introduce new products for increasing their size of the product
folio as well as market share. The company has developed many acquisitions in the long run
including Beats, Siri as well as Shazam (Agrawal et al. 2015). Apple has the opportunity to
invest in sustainable technology that are grown from power and transport for seeking fast
growing popularity.
Threats
Competition are high in the areas if laptop and smart phone production. The
competitive pressure of the company is high from PC brands such HP, Dell, Asus that is
intensively rising. In this context, the market share of HP is higher than the other entire PC
brands such as Lenovo and Dell. However, the launch of Mac Pro has enhanced the

11
STRATEGIC MANAGEMENT
popularity of Apple Laptops again, but still the company has not witnessed any kind of sales
like the top brands in the recent year.
As stated by Chen et al. (2015), economic fluctuations in UK are influencing the sales
and profits of the company. Global increase in dollar has resulted to reduction of profits for
Apple. Moreover, the legal compliances in the technology have also added to the operational
cost of brands leading to pressures and losses for the brand.
Porter’s Generic strategy
Apple’s generic strategy is wide differentiation. This generic strategy of Apple
focuses on the major characteristics of the company along with its product in relevance to the
competitors. Through the wide strategy of differentiation, Apple Inc. manages to shine in the
market (Clarke and Boersma 2017). For instance, their emphasis is on the incredible design in
combination with the user friendly and high-end brand effectively differentiating the
organisation.
Therefore, to address this issue, Apple Inc is needed to behave in a service oriented
way other than behaving in product oriented way. They are required to understand the
essential needs of the customer rather than the products customer is buying. Moreover, the
company is needed to increase the cost of switching for the consumers.
Cost leadership
Apple by strategizing on cost efficiency has been able to manage the success and
sustainability of the organisation. They have done this by reducing the cost of production and
management, Apple Inc. has been offered with an opportunity for determining the price of the
product thereby improving their competitive advantage. However, Wang and Dass (2017)
stated that reduced cost production and distribution of product has helped them to apply
competitive prices on the product as well as by improving the gross profit margin of the
company (Porter 1985). Moreover, some of the activities implemented by the organisation
while executing the cost leadership process is through the reduction of the functional cost
thereby reducing the cost of distribution high control of employment cost that has been highly
implemented by Apple. Research and development strategies that are adopted by Apple help
the company to remain innovative and link its strategies with that of the demands of the
customers. For example, most of the times, the research and development strategies that are
adopted are based on the manufacturing of products such as IPad for the use of common men.