Strategic Analysis of Apple Inc.: Business Strategies and Performance

This project provides a comprehensive strategic analysis of Apple Inc., examining its background, business strategies, vision, mission, and values. The analysis delves into Apple's organizational performance, highlighting its competitive advantages and impact on market capitalization. It then applies Porter's Five Forces framework to assess the competitive environment, including competitive rivalry, bargaining power of buyers and suppliers, threat of substitution, and new entrants. The project further utilizes the Resource-Based Theory, employing the VRIO framework to evaluate Apple's resources and capabilities. A SWOT analysis is also conducted to identify the company's strengths, weaknesses, opportunities, and threats. The analysis references multiple academic sources, offering a well-rounded perspective on Apple's strategic position and future prospects.

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Strategic Planning
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Project Part A
Background
Apple Incorporation is an American-based technology company which was founded in 1976;
its headquarters is situated in Cupertino, California and it operates in different industries
including computing hardware, software, cloud computing, artificial intelligence, digital
distribution and others. The company currently holds third rank in the annual Fortune 500 list
by being one of the highest revenue generating enterprise that is situated in the United States.
Recently, the organisation became the first ever technology company to reach a market
capitalisation of $1 trillion which has provided it a competitive advantage in the market
(Ventura, 2019).
Business Strategies
The business strategies adopted by Apple are targeted towards generating and sustaining a
competitive advantage in the market which allows the company to continuously expand its
profitability even in diverse market conditions. The company has adopted differentiation
business strategy to manage its operations; particularly, the corporation uses product
differentiation strategy to create an edge over its competitors (Yang, et al., 2018). Through its
strategy, the company ensures that key features of its products are different from its
competitors. The company gives utmost importance of small details and design features of its
products while creating its products which are not the case with its competitors. For example,
the company make sure that its products are user friendly and they have elegant design
features which differentiate them from other products in the market (Desjardins, 2019). The
company also combined its strategy with high end branding that effectively differentiates it
from other technology businesses.

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Vision, Mission and Value
 Vision: The vision of the company is to bring the best personal computing experience
to its customers that include students, creative professions, educators and other
customers on a global scale while relying on innovative software, hardware and
internet offerings (Cuofano, 2020).
 Mission: The mission of the company is to design a diverse range of products
including Macs, OS X, iWork, professional software and others. It also focused on
leading the digital music revolution by offering services and products such as iTunes
and iPods respectively. It has also launched revolutionary App Store, iPhone and
iPads through which its focuses on defining the future of mobile media and
computing devices (Blodget, 2013).
 Value Statement: Apple operates on high standards and values which are also
followed by its executives while taking business decisions. These values include focus
on community development, environment protection, high standard of customer
services, innovation and others (Delery & Roumpi, 2017).
Organization Performance
The business strategies adopted by Apple links with its mission, vision and values and they
have a positive impact on overall organisational performance. Since the company focuses on
designing and manufacturing products which are different than compared to other products in
the market, it is able to charge high prices from its customers. The company also make sure
that its products seamlessly work with one another which increase their overall sales. For
example, the company recently launched Air pods which connect with iPhone when they are
close to them; this seamless connection and convenience are preferred by customers globally
making it one of the most successful products launched by Apple (Threlfall, 2017). Similarly,
other products offered by Apple are also designed to create an “ecosystem” in which devices
interact with each other to provide better services to customers that lead to increasing their
overall sales. This has resulted in making Apple the first even technology companies that
achieve the major milestone of $1 trillion market capitalisation (Leswing, 2019). It shows

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that the business strategies of Apple have a positive impact on organisational performance
which generates a competitive advantage for the enterprise.

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References
Blodget, H., 2013. Apple's New 'Mission Statement' Is Making People Worry That The
Company Has Gone To Hell. [Online]
Available at: https://www.businessinsider.in/latest/apples-new-mission-statement-is-making-
people-worry-that-the-company-has-gone-to-hell/articleshow/21581584.cms
[Accessed 14 March 2020].
Cuofano, G., 2020. Apple Mission Statement and Vision Statement In A Nutshell. [Online]
Available at: https://fourweekmba.com/apple-mission-statement-vision-statement/
[Accessed 14 March 2020].
Delery, J. E. & Roumpi, D., 2017. Strategic human resource management, human capital and
competitive advantage: is the field going in circles?. Human Resource Management Journal,
27(1), pp. 1-21.
Desjardins, J., 2019. A Visual History of the Largest Companies by Market Cap (1999-
Today). [Online]
Available at: https://www.visualcapitalist.com/a-visual-history-of-the-largest-companies-by-
market-cap-1999-today/
[Accessed 14 March 2020].
Leswing, K., 2019. Apple reaches $1 trillion market cap again after iPhone launch. [Online]
Available at: https://www.cnbc.com/2019/09/11/apple-touches-1-trillion-market-cap-again-
after-iphone-launch.html
[Accessed 14 March 2020].

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Threlfall, D., 2017. Why is Apple's Marketing Just So Darn Good?. [Online]
Available at: https://www.crazyegg.com/blog/why-is-apples-marketing-good/
[Accessed 14 March 2020].
Ventura, L., 2019. World’s Largest Companies 2019. [Online]
Available at: https://www.gfmag.com/global-data/economic-data/largest-companies
[Accessed 14 March 2020].
Yang, S. H., Nam, C. & Kim, S., 2018. The effects of M&As within the mobile ecosystem on
the rival's shareholder value: The case of Google and Apple.. Telecommunications Policy,
42(1), pp. 15-23.

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Project Part B
Porter’s Fiver Forces Framework
 Competitive Rivalry (High)
The intensity of competition faced by Apple is high which creates challenges for the
organisation; major competitors of the company include Samsung, Google, LG, Motorola,
Sony, OnePlus and others. These companies use aggressive advertising, imitation, and rapid
innovation to launch products which capture the market (Moorman, 2018). The products of
these companies also target a diverse range of customer segments which is not the case with
Apple since its products are highly priced which created threats for the business.
 Bargaining power of buyers (Strong)
There is low switching cost for buyers in case they wanted to change Apple products since
similar products are easily available in the market. Furthermore, high buyer information is
available in the market as well based on which they can make informed decisions. Apple has
to make sure that its customer service is effective to retain its customers (Rasul, 2018).
Customers can conduct detailed comparisons before purchasing products which provides
them high bargaining power.
 Bargaining power of suppliers (Weak)
The number of Apple’s suppliers is moderate to high since the company develop most of its
components on its own to make sure that they work effectively with one another. The
company also create contracts with its suppliers making it difficult for them to change their
policies which provide an edge to Apple (Wilson & Daugherty, 2018).
 Threat of substitution (Weak)

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The availability of substitute products is low in the market since Apple makes sure that other
companies are not able to develop similar products and services in the same industry through
patents. The “ecosystem” created by the company gives it an advantage as it lowers buyer
propensity to substitutes which benefits the company (Johnson, et al., 2012).
 Threat of new entrants (Moderate)
Although Apple is one of the leading brand in its industry and it has created a positive brand
reputation which is difficult to exploit by new entrants; however, other companies are
entering the marketing while relying on innovation which could create challenges for Apple
in the future (Chen & Ann, 2016). Due to high capital requirements and high cost of brand
development, the number of new entrants is low; however, the capacity of potential new
entrants is still moderate for the company.
Competitors Analysis
Apple have a great base across the globe being a universal technology giant where the
company face challenges through competitors such as Samsung, Motorola, Google and others
with a market share of 22.09 per cent globally. In the US, the company is a leader with 54.35
per cent of market share compared to other rivals. The company manufactures products with
extraordinary features within the overall network (O'Dea, 2020). There are exit barriers
created by Apple due to the availability of software solutions for some customers only which
develops a bigger competitive advantage for the company. Also, the company has its own
brand loyalty which itself is a competitive advantage for Apple compare to other competitors.
Resource Based Theory
Apple uses the resource based theory for analysing the sources of its competitive advantage
which is possible with the help of VRIO Framework termed as valuable, rare, imitable, and
organisation exploitation. The company consists of having the first mover advantage,
maintaining its brand reputation and customer loyalty (Nwankpa & Datta, 2017). To attain
the competitive advantage, it is essential for Apple to combine hardware and software design

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in a single device, mix the intellectual resources within a complex way along with making it
simpler to use and providing unique customer experience. Lastly, it is necessary to have
activities or resources specifically through partnerships. Hence, the Apple’s core
competencies exploited are to achieve the competitive advantages in long-terms opposing
aggressive rivals. The company has the valuable and rare human resource capabilities for
innovation (Greer, et al., 2017). Also, Apple is globally popular premium brand which
maintain its customer loyalty base as the company’s resources and capabilities having value,
rarity, organisation exploitation and imitability. Thus, the business of Apple is at large
maintaining competitiveness along with challenges faced in the industry and internal issues
within the company. It makes sure to have future attaining profitability while working on
addressing current problems along with strategic changes as possible and business
diversification among technological innovation enhancement for long-term competitive
advantage (Lennerts, et al., 2020).
SWOT Analysis
Apple is one of the largest companies across the globe within the technology industry
growing rapidly. It is essential to analyse the company’s strengths, weaknesses, opportunities,
and threats for making strategies and further exploitation to attain success.
Strengths
Apple is one of the most valued brands having approximate value of $234 billion being an
iconic brand globally due to its reliability and advancing personalised computers and devices
with smart technology. The company provides one of the top technology having millions of
loyal customers with on-going increase in steadiness and innovative products (Lovejoy,
2019). Apple use proficient technology devices to provide quality technology solutions for
making the brand of choice for its loyal customers by understanding and fulfilling their
needs. The company use “Liam” as its recycling robot for maintaining sustainability as
possible in its manufacturing along with services expansion being a second biggest
contributor across the globe (Murphy, 2016).

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Source: (Richter, 2020).
Weaknesses
Apple is expanded at large global pace but having a drawback of high-priced products as it is
not easy for every individual to purchase them. The company lacks in limiting its promotions
and advertisement as it relies on its flagship and iconic retail stores with heavy and solidified
position in the market. The expansion of new services within the market rapidly creates an
entering of the company in area of non-competency (Montgomerie & Roscoe, 2013). Lastly,
there are some features of Apple different from other devices which generate a problem of
incompatibility with other softwares for customers while and after purchasing its product.
Opportunities

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There is a constant growth of the company within the technology sector having dominance
through its large and loyal customer base. Apple implies the role of qualified professionals
within its business for providing the best experience of the company’s products and services
to customers. The company has the opportunity of expanding its distribution network to
generate higher sales and revenue along with getting benefited from diligent promotions and
marketing (Nickas, 2019). There are rivals where it is hard to compete with Apple if the
company develops or creates a green technology to use having eco-friendly environment.
Threats
Nowadays, there is a threat of “coronavirus outbreak” for businesses where there is a
slowdown in supply chain and manufacturing in various countries which affected the Apple’s
disruption continuously by 32 per cent based on the annual revenue as well (Cohen, 2018).
The wrong use of social media can affect the company’s image or reputation due to bad
publicity due to some reasons is also a threat for Apple along with increasing competition
with companies such as Google, Dell, and Samsung which requires new technologies and
revising pricing policy.

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References
Chen, C.-M. & Ann, B.-Y., 2016. Efficiencies vs. importance-performance analysis for the
leading smartphone brands of Apple, Samsung and HTC.. Total Quality Management &
Business Excellence, 27(3-4), pp. 227-249.
Cohen, J. K., 2018. Apple's revenue surpasses $260B in 2018, up 16% from last year: 4
things to know. [Online]
Available at: https://www.beckershospitalreview.com/healthcare-information-technology/
apple-s-revenue-surpasses-260b-in-2018-up-16-from-last-year-4-things-to-know.html
[Accessed 14 March 2020].
Greer, C. R., Lusch, R. F. & Hitt, M. A., 2017. A service perspective for human capital
resources: A critical base for strategy implementation.. Academy of Management
Perspectives, 31(2), pp. 137-158.
Johnson, K. et al., 2012. The Innovative Success that is Apple, Inc.. [Online]
Available at: https://mds.marshall.edu/cgi/viewcontent.cgi?article=1420&context=etd
[Accessed 14 March 2020].
Lennerts, S., Schulze, A. & Tomczak, T., 2020. The asymmetric effects of exploitation and
exploration on radical and incremental innovation performance: An uneven affair.. European
Management Journal, 38(1), pp. 121-134.
Lovejoy, B., 2019. Apple still the most valuable brand in the world, name now worth 9%
more. [Online]
Available at: https://9to5mac.com/2019/10/18/most-valuable-brand/
[Accessed 14 March 2020].