Strategic Analysis of Apple Inc. Using Development Tools

This essay provides a comprehensive analysis of Apple Inc.'s competitive strategy using several key strategic development tools. The essay begins with an introduction to strategic management and the importance of tools for building and forming critical plans. The analysis then delves into the application of PESTEL analysis, evaluating the political, economic, social, technological, environmental, and legal factors impacting Apple's business. Following this, Porter's Five Forces analysis is utilized to assess the competitive landscape, including threats from new entrants, bargaining power of buyers and suppliers, and rivalry within the industry. A SWOT analysis examines Apple's strengths, weaknesses, opportunities, and threats. Finally, the essay discusses Apple's generic strategy, highlighting its use of differentiation to gain a competitive advantage. The analysis is supported by academic references and practical examples, providing a detailed understanding of Apple's strategic approach. The essay concludes with a reference list in Harvard style.

Institutional Affiliation(S)
Competitive Strategy
Apple Inc.
Student Name
[Date]

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Introduction
In strategic management of business firms, many development tools are
incorporated by business managers that assist them while building and forming
critical plans that can align business practices with strategic decisions. These tools
not only help in gaining competitive edge, but also aids organisations while entering
new marketplaces or implementing strategic choices for sustainable business
development (Grant, 2016). There are many development tools present in literature
and management books out of which this essay proposes to discuss PESTEL,
SWOT, five forces and generic strategy to analyse the frameworks as well as utilise
it to study Apple Inc. business strategies.
PESTEL analysis
PESTEL analysis is an effective and unpretentious development tool which
are used by strategic management for making situation analysis to identifying key
external or macro-environment factors that might potentially affect organisations.
Factors includes political, economic, social, technological, environmental and legal
environment that can create opportunities along with threats in business
environment. The primary aim behind making PESTEL analysis is to find current
position of external affairs that can affect organisations along with identifying factors
that needs to be changed within organisations. Overall, the outcome of PESTEL
analysis is to comprehend complete picture that surrounds the company (Kolios &
Read , 2013).
PESTEL analysis of Apple identifies external factors that impacts
organisation’s business practices. Political factors that affects company businesses
includes improvement in free trade policies due to strong brand recognition along
with political stability and development seen in most of the country Apple Inc. deals
in. Economic factors also remain favourable for the company due to rapid growth
seen among developed and developing nations and increase in customers buying
standards. Social factors though influence Apple products a lot for which the
company has to keep modifying its products and services to meet current demands
of its customers. However, since past few years have seen tremendous growth
among mobile users, social factors seem favourable for the company, only that
Apple has to consider more on its cost related matters and include products that can
be purchased by low income groups also. Technology and innovation have always
been top priority for Apple. The cloud computing trend along with technological
integration in every business level makes technological factor too a favourable
situation. Environmental factors that influences Apple’s business strategies include
business stability trend, labour rights trend along with efficiency in products trend
faced by the firm. Legal factors though impact Apple business due to increase seen
in privacy and telecommunication related regulations (Lombardo, 2017).

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Five forces analysis
Five forces analysis of Porter examines business competitiveness and firms
position in marketplace. As today’s organisations faces intense competition due to
highly dynamic nature of businesses, five forces analysis tool helps managers in
comprehending forces that can impact business practices in favourable or
unfavourable way. The forces analysed under five forces tool include threats from
substitute and new entrants, bargaining power of suppliers and customers and lastly,
rivalry within competing industry. This tool provides businesses with in-depth
knowledge about forces that drives competition within firms and thus are utilised by
almost every contemporary organisation’s extensively (Indiatsy, et al., 2014).
Five forces analysis of Apple reveals that the firm faces a low force
concerning threats from new entrants. Since mobile and computer market requires
exclusiveness in companies as seen in Apple Inc along with huge amount of capital
investment, it becomes difficult for new companies to enter in such a dynamic
industry. Bargaining power of buyers also shows weak to some extent for Apple
since the company deals with latest designs and technology that attracts customers
to buy Apple products more than often. However, threats from supplier can somehow
prove a strong force for the company since Apple has to depend largely upon
suppliers which provides the company with high quality raw materials and finished
products. Since fixed telephone have been seen reducing from marketplace, there is
a good scope for voice-over internet products to flourish and no other substitute as
compared to mobile has been seen gaining consumers interest in past few years
which makes threat of substitutes a weak force for Apple (Dudovskiy, 2018). Threats
from rival companies though has a strong force on Apple due to availability of many
competitive brands dealing in computer and mobile industry like Samsung, Lenovo
and Nokia (Jurevicius, 2017).
SWOT analysis
SWOT analysis is also known as SWOT matrix and is considered by
organisations while evaluating strengths, weaknesses, threats and opportunities that
are involved in businesses or within any given situation that requires undertaking
strategic decisions. Theoretically, strengths act as internal attributes of firms and
proves useful for achieving business objectives whereas weaknesses are those
factors that are harmful for organisations and create obstructions in business course.
Opportunities are external factors that can help organisations in achieving strong
position and lastly, threats are the harmful forces which are predicted by managers
that can potentially hamper firm’s performance in future (Arslandere & Ocal, 2016).
The strength analysis of Apple shows those aspects of the company that
strengthen its business internal and external environment. Apple’s strong brand

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image adds to its biggest strength due to rapid adaptation of new and innovative
products. Companies higher profit margin due to exclusive growth and development
strategy also adds to its strength that allow it to enter fresh markets easily.
Weakness can be seen in its distribution network related strategy as the company
follows very strict guidelines for selecting its suppliers and sellers. Higher costs of
products also show weakness in the company for which most of the competitors are
able to attract customers who prefer buying cost effective products. Since Apple is a
company with global recognition, various opportunities lay in front of it especially
enhanced scope for expanding its distribution networks along with developing new
products line. Threat analysis of Apple identifies aggressive competition in mobile
and computer manufacturing industry along with various imitation and legal laws that
may disrupt company affairs in future (Smithson, 2019).
Generic Strategy
Porter suggested generic strategies that can be adopted by businesses to
gain competitive advantage. Framework created by Porter is considered the most
effective in which cost leadership strategy implies upon competitive advantage
gaining through low cot of product or services. The low cost can be the result of
removing costs from operational levels like supply chain, wastages, production, etc.
Differentiation strategy, on the other hand involves creation of products in
differentiated manner for segmenting markets differently. This means, to introduce
variety of products or services and promote differently within every business function
level, thereby allowing companies to desensitize the prices to be different than
competitors or bringing change in standard prices (Tanwar, 2013).
The generic strategy analysis of Apple reveals that the firm utilises
differentiation strategy that helps the company provide services or products in a
unique or different style as compared to its competitors. In fact, Apple’s
differentiation strategy along with its problem-solving management authorise few
specific software applications rather than adopting existing ones. However, this
monopolistic strategy has grown concern in internal management regarding law suits
for which they keep on striving to offer best of the software that are safe and reliable.
Since cost leadership strategies are rarely considered by the company, it needs to
develop and innovate new products that can keep its existing customer stand against
competitor brands. Additionally, the company can ensure entering into new markets
by expanding its product portfolio other than mobile and computer related products
like its other competitor Samsung does (Seidel, 2018).

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References
Arslandere, M. & Ocal, Y., 2016. SWOT Analysis as a Tool for Strategic
Management and an Implementation in a firm in Machine Industry. [Online]
Available at:
https://www.researchgate.net/publication/328916531_SWOT_ANALYSIS_AS_A_TO
OL_FOR_STRATEGIC_MANAGEMENT_AND_AN_IMPLEMANTATION_IN_A_FIR
M_IN_MACHINE_INDUSTRY/download
[Accessed 26 04 2019].
Dudovskiy, J., 2018. Apple Porter’s Five Forces Analysis. [Online]
Available at: https://research-methodology.net/apple-porters-five-forces-analysis-3/
[Accessed 27 04 2019].
Grant, R. M., 2016. Contemporary Strategy Analysis. 9 ed. UK: Wiley.
Indiatsy, C. M., Mwangi, M. S., Mandere, E. N., Bichanga, J. M., George, G. E.,
2014. The Application of Porter’s Five Forces Model on Organization Performance: A
Case of Cooperative Bank of Kenya Ltd. European Journal of Business and
Management , 6(16), pp. 75-85.
Jurevicius, O., 2017. Full Analysis of Apple Inc. Competitors. [Online]
Available at: http://appleknowledge.xyz/apple-competitors.html
[Accessed 27 04 2019].
Kolios , A. & Read , G., 2013. A Political, Economic, Social, Technology, Legal and
Environmental (PESTLE) Approach for Risk Identification of the Tidal Industry in the
United Kingdom. Energies, 6(10), pp. 5023-5045.
Lombardo, J., 2017. Apple Inc. PESTEL/PESTLE Analysis & Recommendations.
[Online]
Available at: http://panmore.com/apple-inc-pestel-pestle-analysis-recommendations
[Accessed 27 04 2019].
Seidel, M., 2018. Apple Differentiation Strategy. [Online]
Available at: https://bizfluent.com/way-5815745-apple-differentiation-strategy.html
[Accessed 27 04 2019].
Smithson, N., 2019. Apple Inc. SWOT Analysis & Recommendations. [Online]
Available at: http://panmore.com/apple-inc-swot-analysis-recommendations
[Accessed 27 04 2019].
Tanwar, R., 2013. Porter’s Generic Competitive Strategies. IOSR Journal of
Business and Management, 15(01), pp. 11-17.

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