Analysis of Apple's Management Using Porter's Diamond Model (MBA 520)

This report provides an in-depth analysis of Apple's management, focusing on the impact of Michael Porter's Diamond Model. The report begins with an article review and a PESTLE analysis, examining the political, economic, social, technological, legal, and environmental factors affecting Apple. It then delves into each component of Porter's Diamond Model: factor endowments, demand conditions, related and supporting industries, strategy, structure, and rivalry, and the influence of government and chance. The analysis explores how these factors contribute to Apple's competitive advantage in the market, highlighting the company's strengths, such as its brand appeal, strategic alliances, and product differentiation. The report also discusses the challenges Apple faces, including high corporate taxation, competition from rivals like Samsung, and the impact of governmental regulations. The conclusion synthesizes the findings, offering a comprehensive overview of how Porter's Diamond Model shapes Apple's management and strategic decisions.

Running head: MANAGEMENT
Impact of Porter’s Diamond Model on the management of Apple
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Table of contents
Article review.............................................................................................................................2
Impact of the Porter’s diamond model on the management of Apple.......................................2
Porter’s diamond model.............................................................................................................3
Factory endowments..............................................................................................................3
Demand Conditions................................................................................................................3
Related and Supporting Industries.........................................................................................4
Strategy, Structure, and Rivalry.............................................................................................4
Government and Chance........................................................................................................4
References..................................................................................................................................5

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Article review
According to Porter, (2011), national prosperity is created on the basis of the efforts
put in by the economists. However, the phrase, “not inherited” can be contradicted, as if the
qualities are not inherited from the ancestors, the economists cannot exercise their talents in
the process of executing the activities according to the rules and regulations. Porter, (2011)
highlights the issue of competitiveness, which is dependent on the capacity of the industries
to bring innovation into the business dynamics, enhancing the standards and quality of the
products and services. Analysing the external environment helps companies like Apple to
assess their position in the competitive ambience of the market. Adhering to an integrated
process is assistance for Apple in terms of maintaining fairness in the competition with the
contemporary brands.
As per the arguments of Porter, (2011), implementing different strategies enable the
companies and industries like Apple to achieve higher competitive advantage. This is
according to the preservation of the traditionalism, which attains consistency. Within this,
main focus is on the approach towards innovation, which helps companies like Apple to gain
large scale customer satisfaction. Taking governmental assistance in innovating the products
and services is the keystone towards taking the standards of the business towards national
competitiveness.
Impact of the Porter’s diamond model on the
management of Apple
Political  High corporate taxation
 Political instabilities (hostility wuth
China)
Economic  Low manufacturing cost
 Increased labor costs
 High exchange rates
Social  Change in the consumer spending
style
 Preference for stylish gadgets

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 Ethical concerns
 Brand image
Technological  Introduction of the payment app,
Android pay
 Apple TV
 Smartphones and tablets
Legal  Regulated financial services via
Google Pay
 Ligitation issues
 Intellectual property laws
Environment  Disposal of non-working electronic
devices
 Environmental pollution
 Expenses behind greenhouse gases
 Global warming
Table 1: PESTLE analysis of APPLE
(Source: Apple.com, 2019)
Porter’s diamond model
Factory endowments
In the past five years, the market shares of Apple mounted up to 255%, superseding
NASDAQ. The major drive behind this is the popularity of iPhone and iPad. However,
protected ecosystem and strong brand appeal are the milestones, helping apple to gain large
competitive advantage. Strategic alliances with the research and development team is
assistance for Apple in terms of appropriate installation of the raw materials in the electrical
devices (Dowling, 2016). Typical example of this are sapphire glass for the mobile
screenguards. The packaging of the iPads and iPhones are such, which attracts the customers.
Infusing the resources into advertising proves beneficial in terms of expanding the scope and
arena of the business.
Demand Conditions
Apple and Samsung, both are technology giants in the smartphone world. iPhone is
one of the major reasons for which Apple emerged as a market leader in the era of 2007.
Conducting market research assisted Apple in gaining an awareness into the specific needs,
demands and requirements of the customers. According to Dowling, (2016), making explicit

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investments in the building large modern plants for reaping large economies of scale,
expanding the capital. The immediate result of this was the seeking an insight into the ways
and means through which innovation can be infused in the smartphones and other electronic
gadgets. In this case, mention can be made of the Samsung Galaxy production, increasing the
competition with Apple.
Related and Supporting Industries
Apple gets assistance from the telecommunications and electrical industries in terms
of providing efficient quality electrical and communication facilities to the customers along
with the gadgets. On the contrary, Gehani, (2016) is of the view that close proximity of the
industries is a support for Apple in terms of gaining an insight into the latest tax obligations
and legislative requirements within marketing.
Strategy, Structure, and Rivalry
Product differentiation is the cornerstone for apple in terms of attracting the
customers. Strategic approach towards hiring skilled labours is fruitful for achieving
competitive advantage over the contemporary brands like LG, Samsung and Blackberry.
Reduction in the cost structure has enhanced the market presence, expanding the scope and
arena of the business. This situation has resulted in the acquiring higher margins and market
share, taking the standards of the business towards national competitiveness.
Government and Chance
Governmental intervention can be considered at the macro level in terms of strategic
management. According to the arguments of Porter, (2011), government cannot directly
intervene into the business of companies like Apple for assisting in achieving competitive
advantage. Agencies like Ministry of Law, Ministry of Finance, Ministry of Cultural Affairs
and others, who support Apple in unleashing their competencies and capabilities for
achieving large scale customer satisfaction. Along with this, governmental support is

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assistance in terms of developing the policies for standardizing the business activities
according to the benchmark.
References
Apple.com (2019). About us. Retrieved 26th April 2019 from
https://www.apple.com/us_kiosk_5000012/shop
Dowling, G. R. (2016). Winning the Reputation Game: Creating Stakeholder Value and
Competitive Advantage. MIT Press.
Gehani, R. R. (2016). Corporate brand value shifting from identity to innovation capability:
From Coca-Cola to Apple. Journal of technology management & innovation, 11(3),
11-20.
Porter, M. E. (2011). Competitive advantage of nations: creating and sustaining superior
performance. Simon and Schuster.