Unit 32 Business Strategy: Apple's Internal Environment Analysis

This report analyzes Apple's internal environment and strategic capabilities, focusing on its business strategy. It begins with an introduction, followed by an analysis of strategic capabilities, defining key components like resources and competencies. The report explains the Resource-Based View (RBV) and its significance in achieving a competitive advantage. It then identifies Apple's strategic capabilities using the value chain framework, examining both support and primary activities. The report also provides a SWOT summary, outlining Apple's strengths and weaknesses. Finally, it uses the VRIN/VRIO framework to assess which strategic capabilities contribute to a sustainable competitive advantage. The report concludes with a summary of the findings and includes references.

ASSIGNMENT 2 FRONT SHEET
Qualification BTEC Level 4 HND Diploma in Business
Unit number and title Unit 32: Business Strategy (574)
Submission date Date received (1st submission)
Re-submission date Date received (2nd submission)
Student name Trần Minh Student ID
Class Assessor name
Student declaration
I certify that the assignment submission is entirely my own work and I fully understand the consequences of plagiarism. I
understand that making a false declaration is a form of malpractice.
Student’s signature:
Grading grid
P2 M2
1

2
Summative Feedbacks: Resubmission Feedbacks:
Grade: Assessor Signature: Date:
Internal Verifier’s Comments:
Signature & Date:

3
Contents
Introduction…………………………………………………………………………………………………………………………..4
P2. Analyze the internal environment and capabilities of a given organization using appropriate frameworks
...................................................................................................................................................................................
4
P2.1: Carry out the internal audit in terms of strategic capabilities......................................................................4
P2.1.1: What are the strategic capabilities and what are the key components of strategic capabilities?............4
P2.1.2: Briefly explain the Resource-based view (RBV) as the basis for competitive advantage........................5
P2.1.3: Identify the strategic capabilities of the chosen company by using one of various methods
(Benchmarking, The value chain and the value system, Activity systems)...........................................................5
P2.2: Based on the results of the internal analysis, provide a half of SWOT summary for the chosen company
.................................................................................................................................................................................. 9
P2.2.1: Strengths and weaknesses.............................................................................................................................9
P2.2.2: Carry out the strategic capability analysis by using VRIN/VRIO framework to assess which strategic
capabilities can be a basis to achieve sustainable competitive advantage...........................................................11
Conclusion…………………………………………………………………………………………………………13
References................................................................................................................................................................ 14

4
Introduction:
Apple is one of the largest company in the smartphone industry and their direction as well as their choices
always the questions of its competitiors. Therefore, in this coursework, I will analyze the SWOT and the
internal as well as external of Apple.
P2. Analyze the internal environment and capabilities of a given organization using appropriate
frameworks
P2.1: Carry out the internal audit in terms of strategic capabilities
P2.1.1: What are the strategic capabilities and what are the key components of
strategic capabilities?
Definition: Although company executives are responsible for designing and implementing corporate
strategies, not all firms have the same approach to strategy development. As they compete with one
another for clients, market share, and money, they use strategic objectives. It is the capacity of a firm to
utilize competitive tactics that help it survive and grow in value over time. Organizational, resource, and
market positioning considerations all have a role in strategic capabilities, and it is impossible to forecast
how they will be employed in the future without considering them. For strategic skill, there is more than
one way of measuring it. To put it simply, strategic capabilities are an organization's resources and
capabilities that are necessary for it to thrive and grow.
Key components
Resources: A resource is anything that may be utilized to produce additional wealth or value for human
use, including physical materials and specialized expertise. Nonetheless, corporate managers are
concerned with how their company's resources may be turned into valuable assets. So that every
department may make use of corporate resources, this is what we're trying to do. This includes both
tangible as well as intangible assets, such as money and human capital. Machines, factories, structures,
and manufacturing capacity are all examples of physical resources. From the age, condition, capacity, and
location of each resource, the utility of these resources may be determined. Next, we'll talk about money.
Capital, cash, loans, and other forms of credit are all examples of financial resources. Finally, we come to
human capital. A company's human resources are all of the skills and information it has about its workers
and the people it interacts with.
Competencies: These resources may be utilized more effectively and wisely if they are put to good use
via competencies. Competences also include three components, namely: physical, financial, and human
capabilities. There are several ways to assess physical competence, but one of the most used measures is
productivity. Controlling and raising money, as well as having the capacity to attract capital, are all part of

5
one's financial abilities. How a business's people apply their experiences, knowledge, and abilities to
create value for the organization is called human competency (Wahl, 2013)
P2.1.2: Briefly explain the Resource-based view (RBV) as the basis for competitive advantage.
As well as researching and evaluating competitors and markets, a company's internal competitive
forces must be strong enough to spur its own growth and development, often at the expense of the
efforts of external rivals. This is a resource-based perspective. ' Using resources as a basis, the internal
environment of an organization plays an important role in determining a company's competitive
advantage and highlights the significance of assets like innovation, reputation, creativity, expertise,
and adaptability. A resource is considered competitive if it is highly sought-after and cannot be
substituted. The firm must answer the following questions in order to discover this valuable resource:
Is the company's present strategy working? What are the company's strengths and weaknesses? Is the
organization able to take advantage of market possibilities and prevent dangers from the outside? Are
pricing and expenses in line with those of the company's primary rivals? Is the company's situation
better or worse than that of the competition? To discover the company's internal competitive
advantages, answer the following questions. (Madhani, 2010, p. 12)
P2.1.3: Identify the strategic capabilities of the chosen company by using one of various
methods (Benchmarking, The value chain and the value system, Activity systems)
Value chain definition: To best explain the actions of firms to gain competitive advantage and to produce
value added, Value chain is a valuable tool for isolating enterprises from a network of value-creating
activities. Product and service offerings are made possible through a sequence of business operations that
add value to resources. Functional areas and primary activities make up the bulk of a value chain. Firm
infrastructure, HR management, technology development, and procurement are all examples of support
operations. Marketing and sales activities, operations, and outbound logistics are some of the most
important facets of supply chain management. To create a product or service, you need a set of ties and
relationships, such as those between a product's manufacturer and its distributor and its end user.

6
Value chain - Support activities
Image 1: Apple’s value chain
(Dudovskiy, 2018)
Firm infrastructure: All of Apple's existing facilities are powered entirely by renewable energy sources
(from renewable sources). Business has made a significant contribution to the fight against global climate
change, and this achievement is a remarkable illustration of that. Apple said in January 1818 that it will
invest $10 billion in data center construction over the following five years. In addition, a $5 billion high-
tech business was recently commissioned by the corporation.
Human resource management: Apple's human resource management is centered on creating a strong
company culture. Regardless of one's position within the organization, everyone is treated with the utmost
respect there. The majority of Apple's top executives have worked at the company for at least 10 years
before being promoted to their current positions. Because of this, they are aware of the tiniest details of
their workers' duties. As a result, it never occurs in an unwarranted manner at Apple. As is customary at
Apple, its workers are given the "freedom" to investigate, enhance, fix and construct the finest solution for
the company's goods without having to go through several phases of gaining approval and onerous
protocols. By consistently challenging its employees, Apple is always promoting their growth and
development. This is the corporate culture of Apple, and it's what allows the Think Different process to
run seamlessly. Apple's corporate culture, which includes creativity and innovation, high-pressure work

7
environments, and secrecy, was also made familiar and adaptable to Apple workers. Those are the
methods used by Apple to manage more than 20,000 people worldwide.
Technology development: When it comes to the advancement of technology, Apple is a household name
because of its willingness to discard the old in favor of the new. Over the course of its lengthy existence,
Apple has played a key role in the rapid adoption of new technologies by the general public. In spite of the
fact that it seldom generates new technology, it may reposition and modify current innovation that appeal
to the user. In the first quarter of 2018, Apple spent more than $ 3.4 billion on research and development
operations, hiring new employees and launching new projects to keep the firm solvent. In a fast evolving
technological industry. In light of this investment, it is clear that Apple is doing initiatives that are not part
of its typical product maintenance cycle.. AR, which is presently restricted to ARKit, has a lot of research
potential and might lead to the release of new hardware catalogs in the months or years to come. At the
end of the year 2017, (Pratap)
Procurement: : Suppliers must fulfill Apple's exacting criteria in order to work with the company.
Quality assurance is an essential part of their needs. The greatest levels of social responsibility must also
be guaranteed by suppliers. The ideal supplier is one that has a thorough grasp of our company's values
and norms. Those who work with Apple's value providers take the effort to learn about our company and
the people who want to bring value to it. These vendors understand the significance of keeping their
promises and delivering the best products and services possible.
Value chain - Primary activities
Apple Inbound logistics: Apple's success may be attributed to a network of suppliers and distributors. As
a result of Apple's success, these firms have also profited. Nikkei reports that Apple now has more
Chinese suppliers than ever before. Apple issued a list of its Chinese suppliers earlier this month, up from
19 last year. Apple's CEO, Tim Cook, is well-known for his domestic policy. After taking over as CEO in
2011, he reduced the number of vendors dramatically. The key source of value in Apple's logistics is the
establishment of strategic connections with suppliers and economies of scale owing to its enormous scope
and business activities, as detailed below. Additionally, Apple Inc. has considerable negotiating leverage
with its suppliers, allowing it to ensure a price advantage when procuring resources. As of 2018,
(Dudovskiy, 2018),
Apple's primary efforts in five key markets are described below. Including North and South America,
Europe, China, Japan, and the rest of Asia. Since September 2017, Apple has employed more than 130.00

8
full-time people, resulting in a manufacturing cost that is regarded low relative to their resources. Few
Macs are built in the United States or Ireland, while the majority of Apple goods are produced by factories
in Asia. As of 2018, (Dudovskiy, 2018),
Apple Outbound Logistics: Professionals greatly value Apple's inventory management criteria. For this
reason, Apple has decided to use Foxconn factories in China to manufacture its products. The apple's
goods may be delivered to customers more quickly from this location. In addition, the enormous
workforce at Foxconn's factory shortened Apple's manufacturing time: Apple sent its items within a few
days after receiving orders. They'll have to wait up to two weeks with other firms.
Retail shops, online stores, direct sales force, third-party cellular network providers; wholesalers; retailers;
and value-added resellers are the seven methods Apple has chosen to market its goods. A total of $53.3
billion in sales were reported by Apple for the three months ending June 30, 2018. Profits are generated
mostly from the sale of items like the iPhone, wearable technology, MacBook laptops, and software
programs. Apple's CEO Tim Cook declared a wide dependence on Channel Partners to further expand the
volume of business sales as the company's emphasis on enterprise sales has risen in recent years. The firm
is taking meaningful efforts toward this goal.
When it comes to Apple products, customer service is a key selling factor, whether it's by phone, online,
or at Genius Bars. In the event of a problem with a Mac or iPhone, customers who live near an Apple
Store may access first-party help, while Windows or Android users must rely on third-party support. You
can't use a third-party or a remote connection unless you have Microsoft hardware. Apple's Tech Support
Showdown is back for a third year in a row in 2017. When it comes to (Khan, 2018)
Apple value: A lot of other firms have a similar value system map to Apple's. The "regular" steps of
research and development, collaboration with suppliers, and finalization to maximize sales and costs are
all included in this process. The location of the procedure is no surprise, however. Apple has agreed to
move all of its assembly operations to China, using materials sourced from all around the globe. If ordered
through Apple's webpage, the product will be sent to the customer by UPS or FedEx after it has been
finished. Apple's merchandise will be sent in bulk to the main warehouse in Elk Grove, California, for
distribution to Apple shops and other retail partners. Customers may return their Apple gadgets for
recycling at the end of their useful lives. Apple's supply chain is so efficient that, despite Stanford
publishing this method of supply chain management for more than two decades, there has been no change
at Apple. Disparate (Disparte, 2018)

9
Image 2: Apple’s value system
(Dudovskiy, 2018)
P2.2: Based on the results of the internal analysis, provide a half of SWOT summary for the chosen
company
P2.2.1: Strengths and weaknesses
Strengths
To begin, let's talk about the name of the company. Apple is one of the world's most well-known technological
companies, and its "apple bite" trademark has made it a household name. Apple has established itself as a
trusted name in the technology industry through time. When people hear the name "Apple," they tend to
conjure images of a well-known, dependable brand. The second one is high-quality goods, services, and
experiences. Computers, laptops, MP3 players, and smartphones all fall under the Apple umbrella. The quality
of these items has won over the majority of clients throughout the globe. Everything about an Apple product,
from the design to the packaging to the advertising, is flawless. Next, there is a massive selection of software.
Many industry experts believe that the company's app store, notably for the iPhone and iPad, has engendered a
strong sense of brand loyalty among smartphone and computer users. For free, the iPhone may be customized
with more than 400,000 Apple applications. Customers' loyalty follows. Customers, particularly young people
who are proud to possess an Apple device, have been indoctrinated with the "apple bite" image. In addition,

10
Apple has a great track record of gaining new consumers. Apple's Listen feature, the most essential thing for
companies to bear in mind is to offer fresh experiences for consumers and from which devoted customers and the
media can assist them in selling.. In precisely the same way that Apple accomplished it, too. To get feedback on a
product, give consumers the opportunity to utilize it. As a result of this, Apple has developed products that are
tailored to the needs of users and get a lot of positive feedback from them. Ahead of the game at all times For as
long as anybody can remember, Apple has always been ahead of its competition when it comes to upgrading its
goods. As a well-known business leader, Steve Jobs, CEO of Apple, was able to win over consumers with his good
name, skill, and approachability. As a "clean" and prestigious brand, Apple expresses itself in several ways under
Steve Jobs' leadership. Last but not least, a catchy name for the business. Apple's product names are simple to
remember: iPhone, iPad, and Mac. As a result, they've placed themselves in the shoes of their customers to
determine whether or not they have any trouble remembering or logging on to the website URL and general forum
of their company.
Weaknesses:
First and foremost, the product's failure. A few bugs, both technical and non-technical, are included in the public
release of several Apple products. Apple users have a hard time dealing with the barking since it costs a lot of
money and effort. Customer wanting to replace their gadgets after three to four years is not really essential, which
impacts Apple sales, is another issue for the company, since products have a long life expectancy. On to cost.
Because of the high cost of Apple items on the market, A very tiny percentage of buyers can afford to buy the
goods at present prices. a well-respected CEO Under Steve Jobs, many new technologies were developed at a rapid
pace. At the moment, Tim Cook's ideas and innovations aren't as fruitful as Steven's were during the previous
administration.

11
P2.2.2: Carry out the strategic capability analysis by using VRIN/VRIO framework to assess
which strategic capabilities can be a basis to achieve sustainable competitive advantage
Conclude: Using Apple's SWOT and value chain, I was able to determine the strategic capabilities of the selected
firm, which included the following four elements: The power of a strong brand, the agility of the supply chain, the
stability of the corporate culture, and the global reach of product distribution that has been around for a while.
The well-known name: By 2018, Apple has topped the list of the world's most expensive brands for the sixth year
in a row. This is made feasible by Apple's strategic skills, which allow for the construction and attraction of
brands. In the Strength section, you'll find a reference to this problem. The 2018 stats from Statista (Statista)

12
The company's culture of stability: Through Apple's human resource management division, Steve Jobs and
Apple have shown that a strong corporate culture can assist a firm like Apple, which previously went bankrupt,
swiftly rise to the top technological company in the world. According to (Mongare, 2018),
International product distribution by a seasoned professional: Apple's worldwide distribution system and the
seven-channel product delivery in the Apple Marketing and Sales department are both well under way. In the battle
between Apple and its rivals to take over the global market, this is a crucial aspect. There are a number of ways to
say this: Consumption of items with a high-end brand is becoming more popular as commodity economics
progresses, resulting in a rise in consumer society. People who want to make it in the business world need to invest
in strong branding. This is a long-term aspect of Apple's brand, which can't be mistaken at this point and may be in
the future as well.
Supply chain management power: Apple seems to be able to force suppliers to meet their standards. Apples
benefit greatly from this association. However, their loyalty to Apple is dependent on the company's influence and
financial condition. That's why it's a modern element, right?
The company's culture of stability: One of Apple's greatest advantages is that it has a culture of innovation that
many of its rivals lack. A long-term factor, this should be maintained by Apple.
Experienced worldwide product distribution: The firm has long been competitive in multinational product
distribution. Apple's rivals, like as Samsung and Lg electronics, sell their goods in other countries, demonstrating
how fierce the battle is on the global stage (scale, strategy, tools). Because of this, Apple need more strategic skills
to remain competitive.
Conclusion:
In short, Apple has made thir decisions in how to operate their company in the way that no other coperations can
be their second version due to the unique in the SWOT and the direction of their products. However, I do
recommend Apple should get an update in their SWOT in order to keep up with the competitiors when Apple is
being seem as an old tech users.