The Success Factors for Apple Inc - Assignment Example

Business Environment of Apple Inc. AFFILIATION: Task A) Goals, mission and objectives of Apple Inc. Apple Inc. is the top-ranked company in the technology sector that has been offering an extensive range of personal computers and consumer electronic devices. Since its inception, it has diversified into designing, manufacturing and marketing of the communication and mobile devices along with portable digital music players and personal computing products worldwide. The mission of Apple is to be the leading service provider for all kinds of technological needs of the customers in environmentally friendly way, maintaining integrity within the business operations to ensure commitment to all stakeholders and fulfilling the corporate responsibilities as well. According to Mishra (2011), it had market capitalization of about $220 billion as of spring 2010. It has implemented a multi-million dollar marketing campaign by slogan “Think Different” so that it can fulfil its objective of being the number one alternative for the customers of mobile device and computer industries. It has been stated by Schipanova (2008) that the main goal of the corporation is to differentiate its products from the competitors such as Dell, Microsoft, HP, Toshiba and others by offering its customers highly innovative and unique options. It aims to capture the leading position both in mobile device and PC industries by developing products with latest technology. In order to make sure that it is able to compete effectively, it has heavily invested in its Research and Development department and facilities so all offerings are free from any defects. One of the top-ranked companies in the technology sector is Elektron Technology UK Limited that is a subsidiary of Elektron Technology PLC that has been present in the market for many years. It has been offering top quality solutions to its customers by offering them instant solutions for monitoring and control, instrumentation and connectivity. The leading brands of the company are Sifam, Arcolectric, Carnation Designs, Bulgin, Queensgate and Digitron. The mission of the company is to provide superior quality components for electromechanical along with instrumentation products that have been developed with the latest technology without causing any damage to the environment. In order to achieve its desired mission, the main objective of the company is to constantly introduce new and innovative solutions to the customers so that they are able to meet the technological needs in the best possible way (Elektron Technology, 2012). From the analysis of mission and goals of both companies, it is evident that the goals should be properly aligned with the core purpose of the organisation so that the company’s stakeholders such as employees, suppliers, distributors and workers can ensure that they make valuable contribution in the company’s enhanced performance. (B) Stakeholders of Apple Inc. The key stakeholders of Apple Inc. are customers, employees, distributors, suppliers, environment and government. The basic foundation of its strategy is to offer highly differentiated products to the customers by incorporating the latest technological innovations in them. Since the market demands change on a continuous basis, it has ensured that it conducts market research frequently so that it can monitor its performance in the market effectively. Apple has the responsibility of offering genuine and authentic products to the customers that have been developed in accordance with the environmental regulatory framework. Even in its advertisements, it provides the information about its products with accuracy so that they are able to make the final decision effectively. The customers are also offered highly differentiated products that have the most up-to-date features so that they are able to use the top ranked technological gadgets and protect the environment by following the environmental policies with accuracy. It has different policies for its suppliers and distributors; they are not allowed to work with the competitors of Apple so that they are offering their services exclusively to the organisation. Most of the outsourcing work is done from Asian countries and it ensures that there are various suppliers so that it can mitigate the risk of price fluctuations. The customers of the company are mainly the consumers, education, government, enterprise and SMB markets. It uses a blend of both indirect and direct distribution channels like online stores, direct sales force, value-added services, third-party mobile network carriers, retail stores and wholesalers. The distributors have to enter into contracts that will allow them to offer their exclusive services to the company (Apple Inc., 2012). It makes valuable contribution to the country’s economy by contributing more than 2% in UK’s GDP and is also a major contributor in the country’s economy. Task 2 (A) UK Economic System UK is considered to be the leading industrialised nation of the world and the focus of the country has shifted to the services sector from the manufacturing in the last few years. Among all the industries in UK, the two industries that have been able to create distinctive positions in the market are mobile devices and construction industries. Its economy is ranked as the sixth largest national economy of the world when measured in terms of nominal GDP which is about $2,480 trillion and eighth largest when measured by PPP i.e. Purchasing Power Parity which is approximately $2,253 trillion (OECD iLibrary, 2012). In third quarter of 2012, the GDP grew by 1% and GDP by sector is divided as agriculture (0.7%), services (77.8%) and industry (18.2%) as of 2011. The unemployment rate in the country is still high, which is about 7.8% (2.51 million) in September 2012. As of October 2012, the CPI rate was 2.7% and RPI rate was 3.2%. The public debt of the economy is £977 billion which is about 63% of total GDP and budget deficit of about £120 billion (Trading Economics, 2012). After 1979, the government privatised most of the state-owned corporations so that the competition among companies was intensified and they were listed in the financial market of UK for augmenting demand and supply of the UK economy. At the same time, the government introduced direct and indirect taxes for the public. In order to boost UK’s economy, certain financial bodies were developed such as HM Treasury, Bank of England, Office of Fair Trading and Competition Commission. For enhancing its performance in UK market, Apple will have to develop a strategy compatible with the customer demands so that it can exploit all accessible opportunities. Since recession is impacting the country’s economy, the people are saving huge amount of money and there will be less demand for the expensive products. The products of Apple have high prices so it will have to ensure that it offers selling price within the affordable range of customers. (B) UK government Policies The government policies mainly comprise of fiscal and monetary policies. The Bank of England is responsible for the development and implementation of these policies so that there is both financial and monetary stability within the country. The prime reasons for setting an effective monetary policy in UK is to have stable prices, low inflation and maintenance of currency value. The Monetary Policy Committee has the main role of setting inflation target that will ensure stability in prices along with low inflation (Nnadi, 2011). The fiscal and monetary policies of UK are usually derived from three main drivers to boost the economic performance of the country i.e. reduction in the interest rates, provisioning of £200 billion for quantitative easing and stimulation of the fiscal policy of the economy. In order to ease the quantitative technique for combating the economic recession, bank lending rate was decreased, VAT was reduced to 15% from 17.5% along with shrinking of LIBOR rate; all of these policies were in compliance with recommendations of EMU (European Monetary Union) for facilitation of fiscal stimulus (Bank of England, 2013). Apple will have to consider the tax policies along with interest rates so that it can avail the opportunities for financing its operations within the country. Since VAT amount has been reduced and bank lending rate is decreasing as well, it can take advantage of these options by developing cordial relations with its suppliers and distributors. However, the management will have to remain alert about the changes in the policies so that it can ensure compliance with the business environment of UK. (C) Competition Policy In order to boost healthy competition within the country, UK and European Union have developed Competition Commission that regulates the competition within each industry and ensures everything is properly controlled. According to European Commission (2012), the four pillars of the competition policy within the region are market liberalisation (appropriate competition in previous monopoly sectors), aid control by state (no distortion in single market of EU member states), anti-trust and cartels (no dominance in the market by using price-fixing agreements along with cartels) and control on mergers. Apple has to make sure that its business operations are conducted in accordance with the commission policies so that it does not create monopoly within its market and does not conduct any unethical activities within the state. In case of any issues, Apple will have to pay penalty amount if found guilty of some crime. (D) Regulatory Policies Since 2010, UK has imposed stricter regulatory policies regarding the company regulations so that the organisations avoid misusing their rights and work towards the common goal of the country i.e. offering superior quality services to the community and boosting the economy. In 2010, the UK regulatory framework was reformed by the government that included development of Financial Policy Committee (FPC) which is an independent body of Bank of England along with fresh Prudential Regulation Authority (PRA) which is a also the Bank’s subsidiary. Hence, Apple’s business has been affected to a large extent by the changes in these regulation policies as it has to follow the new rules related to its business operations within the region. Some restrictions about the product offerings have been imposed for providing opportunities to the local firms for improving their performance in the respective sector (Regulatory Policy Committee, 2012). Task 3 (A) Impact of market structure on pricing decisions With the advent of globalisation and open trading policies, many organisations have availed various benefits available for them in their respective industries. Since Apple operates in the technology sector of UK and the technological developments take place at a fast pace, it is vital for the employees and management team to keep on making valuable contributions in the market. Since price of the products is the main driving force of purchasing decision of most of the customers, Apple is following a competitive pricing strategy by charging high prices on its products. Apple is basically targeting niche market and the products have been developed with the latest technology so that it can compete in the business environment by making pricing decisions on the basis of UK market structure. (B) Impact of market forces on Apple’s responses As the customers are demanding new features and applications in the technological gadgets at an ever increasing pace, it is vital for the company to keep track of the demands of the customers along with key competitor moves and incorporate those requirements immediately in their existing and new product offerings. The UK technology market is characterised by intense competition among the rivalry companies, medium barriers of entry, low threat of substitutes, moderate bargaining power of suppliers and medium to low bargaining power of buyers (EconomyWatch, 2010). In order to gain competitive edge in the market, Apple has invested huge amount of money in its Research and Development so that it can offer the latest products and services quickly. The corporation has even developed an effective logistics system by taking advantage of single market in EU and harmonisation of various trading policies; Apple has successfully created a well-integrated supply chain system that allows it to respond to the changing demands of the customers in the shortest possible time. (C) Impact of business and culture environment on Apple Since UK is a member of EU, the country has strengthened its economy by employing its resources effectively in those areas that lack expertise and need significant attention for development. Apple’s market is tough and competitive and the technological innovations are taking place every second. As the environment of UK is favourable for Apple’s products and service offerings, it has to ensure that it uses the right mix of marketing and management activities that will assist it in capturing more market share in the sector. Now-a-days, people have become too much concerned about safety of environment and want to be assured that a company conducts its business activities within the ethical, legal and governance boundaries. The UK market comprises of technologically savvy people who are waiting aggressively for new and innovative products in the market; Apple can take advantage of this opportunity by offering them the products that will fulfil the desire of owning the latest and highly innovative technological instruments (Ashcroft, 2011). Task 4 (A) Significance of International Trade on Apple As a result of globalisation and ease of trading among nations, the international trade has become convenient and easily accessible by various Multinational Corporations. Some of the countries have eased their trading rules and regulations so that they can attract Foreign Direct Investments and enhance their economic performance on a global level. On the other hand, few countries such as EU have offered their member countries the opportunity of availing single market benefits and develop cordial trade relationships by forming the strategic alliances. Similarly, Apple has availed advantages of the open trading policy among EU countries as it has eased its operational flow among the member states. UK businesses are even allowed to expand conveniently in member countries and exploit the business opportunities offered in these regions (European Commission, 2012). Apple is now offering all of its products in the UK market and has ensured that it meets the demands of every market by altering the strategy in each destination to meet the market requirements. (B) Impact of global factors on Apple The global factors that have impacted the operations of Apple worldwide especially in UK are intense competition, free and easy trade policies, wide range of options for the customers, cheap products easily accessible in market, growing trend of online business, fast developments in the technological boundaries, stringent environmental rules and regulations and increasing pace of globalisation (Geirsbech, 2010). Since global barriers are diminishing, majority of the companies are outsourcing their business activities in economical areas such as China, India, Malaysia and etc. so that they can compete with their rivals in a cost-effective manner. Apple has shifted its manufacturing facilities in Asian countries so that it can offer similar quality products within existing price range; the customers have become price conscious and they are looking for alternatives that can give them value for money within their affordable range. (C) Impact of EU policies With the help of latest EU policies especially intermodality and transportation policies, majority of UK companies have been benefited from them. The principal role of these policies is evident in the logistics and supply chain of the companies as the transportation and inventory costs have been reduced at a great level. The biggest advantage for EU members is the Open Trade Policy along with harmonisation of rules and regulations for business operations within the countries that has eradicated the operational barriers for the organisations (EconomyWatch, 2010). EU has even set up a Commission Committee along with a Regulatory Body that provides assistance to the companies in developing stringent rules and regulations for the corporate governance and fair competition among rivals. Likewise, Apple has gained popularity in the region by developing friendly relations with the suppliers and distributors for offering them the most compatible business offers. It has even ensured that it offers superior quality with consistency everywhere in EU so that the customers are provided access to excellent product options with utmost ease on the international level. Conclusion Apple Inc. is truly a market leader in its sector that has successfully set a benchmark level for its competitors. In order to mitigate the risks in international market, the corporation has undertaken necessary steps that will assist it in achieving its mission and objectives successfully. The critical success factors for the organisation are its innovative work culture, freedom of exploiting new ideas, keeping track of the customer’s demands, ensuring compliance with the legal authorities of each country and taking advantage of all available options in the market strategically. References Apple Inc., 2012. 2012 Annual Report of Apple Inc. [Online] Available at: [Accessed 12 January 2013] Ashcroft, J., 2011. Apple in the digital age from the iPod to the iPad: Apple Inc. 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