Business Environment for Apple Incorporated - Case Study Example

Apple Incorporated Introduction Apple Incorporated started to race with IBM in the field or area of personal computing which paved way to its Mac (Macintosh) computer product line. Today, Apple Incorporated is known not only for its computer product lines but iPods, iPhones, and iTunes. Apple Incorporated has become renown in the world by its iPod together with its cutting-edge technology and design. This serves as important turning point for Apple Incorporated and which allows trust and loyalty among its target and prospective market segments. Part 1. External Analysis The business environment for Apple Incorporated has become so challenging considering that there are important components in it that needs to be understood in detail. PESTEL Analysis In every business environment, government is an essential component for a successful business implementation. Porter believed that the government has important role to play when it comes to the establishment of a harmonious business environment for every business or industry. Thus, there is no wonder why political consideration has always been an important concern in every business situation. In the case of Apple Incorporated, it is crucial with its business to maintain its identity and this is done through intellectual property management for the designs of its product offerings. In line with this, the government always has political power to include in its policy and procedure for handling business situations. It is also in line with this that there is a higher level of association involved with legal concerns. The legality is necessary because it is through this that a business or organisation can successfully implement the right strategy and procedure. The economic recession in the United States which has affected the entire world economy has also created a chain impact on Apple Incorporated’s financial performance. Porter argued that economic advantage is an essential factor or component for a successful business. Prospective customers must have buying capacity. Apple Incorporated needs customers for its product offerings. Unfortunately, the economic recession has reduced the target revenue of Apple Incorporated. Customers nowadays are bombarded with different information. This means that everyone has the chance to be influenced by one person and another. In the case of marketing activity, people are socially aware that it is a matter of idea that can substantially influence their buying power. In line with this, Apple Incorporated considers the most important idea that can create social impacts. The cutting-edge technology of Apple Incorporated can substantially compete with the ongoing trend. This is due to the fact that advancement of technology has become tantamount to the level of progress in everywhere. The corporate social responsibility is one of the latest trends in business. This is due to the fact that there is a need to consider the environment. In fact, businesses are highly influenced by the fact that there is a need to be environmentally concerned and not just purely on making profits. Porter’s Five Forces Porter’s five forces model can substantially explain how competitive rivalry between Apple Incorporated and other manufacturing companies in its industry is formed. Samsung, Nokia and other rivals of Apple Incorporated have substantially created specific strategic moves in the market. Considering that these companies are also good at creating demand for their product offerings. Apple Incorporated has been faced by issues concerning the design of its offerings. These companies have essentially copied in detail what Apple has viewed to be remarkably important for its customers. These companies have learned the information that customers are looking forward not only on brand quality but reliability issues and utility issues. Thus, customers have strong market power because of increasing models of product offerings. Competition has become so intense which resulted to Apple’s highly differentiated strategy of stimulating needs for its product offerings. Illustration 1. Porter’s five forces model (Porter, 1990). Porter’s five forces model is showing rivalry as the fifth force prevailing in the industry where Apple Incorporated belongs. This competitive rivalry is beneficial for the consumers, but very challenging for Apple Incorporated. Thus, competitive advantage is needed to be achieved because it ensures sustainability of business and attainment of corporate objectives. Part 2. Internal Analysis Strength One of the strengths of Apple brands is its cutting-edge technology. Because of this, its iPod has remarkably created significant market share. Not only that, Apple is good at benchmarking its individual product performance and thus this has created chain effects of acceptance to its other lines of product offerings. On the other hand, Apple is a leading company in its industry for innovation. Its strategy for differentiation is leading in its industry because of its ability to stimulate needs for its product offerings. Other designs in the market are actually inspired by its innovative designs. Thus, consumers are looking forward to put their trust on brands created by Apple Incorporated because of its first-hand idea on innovative product lines. Weaknesses Apple’s one weakness is its management issue. The part time role of Tim Crook, acting CEO and current chief operating officer is considered by experts to create important implications in the company’s performance. On the other hand, there is also a great concern on Apple Incorporated’s great reliance on the third parties, which has a great impact on its value chain management in the event that they are not entirely controlled. This means that Apple Incorporated needs to substantially rely heavily on the capacity of the third parties prior to the production of high quality standard offerings. Balanced Scorecard Financially speaking, Apple was able to hit its corporate objectives in 2009 despite global economic recession. The revenue in 2009 exceeded the previous year. The bottom line of this is the fact that Apple Incorporated was able to consider clear priority for its customers, internal business process and learning and growth. When it comes to its customers, Apple Incorporated has important strategies not just to stimulate needs for its offerings, but to satisfy customers with highly innovative products and excellent design and functionality. This is a case of relationship marketing and Apple Incorporated cannot just afford to lose its ability to influence customers’ buying decision. The case of learning and growth strategy is another measure of performance for Apple Incorporated. The issue of quality control is not just in line with customer satisfaction, but it is also an integral part of the ability of each department to be highly adept with the latest technological trend and customer’s needs. Thus, Apple Incorporated substantially regarded learning and growth as effective means of quality control, and eventually good company performance. Finally, the internal business process of Apple Incorporated is very promising considering that its management of the entire operation are ensured to follow high level of excellence as integrated with satisfying customers. Value Chain In order for Apple Incorporated to substantially compete in its industry, its value chain management needs careful consideration. This is the necessary case that needs to be applied especially that it tries to rely on the third party. At the same time, the company activities that try to provide the best quality product with excellent customer service are all aimed to provide satisfaction among stakeholders and customers. BCG Matrix At this point, Apple Incorporated is trying to maximise its advantage in iPhones due to the fact that the units sold for this item reached up to 626 percent increase compared from the record in the third quarter of 2008. Based on the BCG Matrix Apple significantly tries to invest higher on this line of offering and at the same time create higher priority as well. The decline of sales in iPod brings the company the possibility to remain in its investment in it and still higher priority. In the same way, the other line of products had the same level of treatment for investment even if the market share remains constant or declining at some point. Part 3. Current Problem Diagnosis Porter’s Generic Strategies Based on Porter’s generic strategy, Apple Incorporated is good at differentiation strategy. This is the reason why it has become the leading company in its industry when it comes to stimulating needs. It is in line with this that Apple Incorporated is continuously challenged by its competitors when it comes to the latest trending in the mobile communication industry. For instance, its iPhones or smartphones line of offerings are challenged by existing competitors due to the latest trending and prevailing demand in the market. The whole thing about it was started by Apple Incorporated. It is an integral part of the company to stimulate needs for its offerings. What is the good thing about Apple Incorporated is its capacity to lead based on quality, design and cutting-edge technology for its product offerings. However, it is not only Apple Incorporated which has the essential capacity to do all of these. Other existing companies in its industry are highly motivated to satisfy customer needs by providing them product offerings that are substantially excellent in their performance and quality. The competition is everywhere and it seems challenging for Apple Incorporated to think of every new possibility. This therefore has become a way of life for Apple Incorporated and there is a need for higher level of consistency required. Apple Incorporated therefore needs to undergo focus differentiation, but along the way, there is always a point of comparison of price which has always become one the reasons it has been so tough for Apple Incorporated to compete. Strategy Clock Illustration 2. The Strategy Clock: Bowman’s Strategic Options In detail, it seems clear that Apple Incorporated has become so much attached to focused differentiation. It is in line with this that it has substantially added high value and price for its product offerings. This is the reason why Apple Incorporated is renowned for its highly priced offerings compared to those from other existing competitors in the industry. This is the reason why Apple Incorporated is highly expected to create product offerings that are of substantial quality. However, many companies in its industry are more willing to provide high quality line of products with almost the same performance in line with cutting-edge technology. It is in this reason that Apple Incorporated has remarkably being challenged from time to time. External factors in its industry have become its motivating move, but at the same time great challenges. Part 4. Generation of Strategic Options Porter’s Generic Strategies Apple Incorporated is good at stimulating market needs and by this it has created a specific strategy that will make it a cut above the other, differentiation. There are generally two types of differentiation and one of them is focused differentiation strategy. What is the good thing about focused differentiation strategy has something to do with stimulating specific needs in the market. For instance, Apple Incorporated is renowned for its cutting-edge technology and innovation. It has become the leading company in its industry that tries to differentiate its product offerings with remarkably enticing features that at some point creates significant awareness to its specific customers in the market. Its latest innovation on design of its product offerings with the involvement of technological advancement makes Apple Incorporated the leading company that especially applies focused differentiation strategy. The Strategy Clock Value proposition of Apple Incorporated is highly associated with how it creates the specific strategy when it comes to its differentiation strategy and final price of its product offerings. In line with this, there is a strong association between quality, performance and reliability of produced product offerings. Thus, there is also a need to consider market segmentation in order to carefully study the specific needs of customers. It is a fact that Apple Incorporated has substantially considered this considering that it is always looking forward to stimulate needs for its product offerings. Part 5. Evaluation of Strategic Options Balanced Scorecard Financially speaking, Apple Incorporated has satisfied this specific organisational objective. Its revenue compared to the past years was strongly increased and there is considerable level of growth observed. This is therefore an indication that its financial consideration has been clearly satisfied even though in the midst of existing external factors in the process. Its customers matter most to Apple Incorporated. The continuing trust placed by its target customers on its line of product offerings is the result of providing the best value proposition that can be trusted all throughout the entire working life of the products. This is an issue of creating customer relationship. In most cases, this type of issue is highly focused on relationship marketing. The internal business process at Apple Incorporated is properly monitored considering that it has substantial consideration on its supply chain management. It is not only important to consider this, but it is crucial to maintain a healthy and strong communication process that exists in the entire operation especially with the third parties. Finally, the focused differentiation strategy of Apple Incorporated leads to the continuing need for learning and growth. This is clearly manifested by how it continues to create more new features for its offerings. In line with this, there is a need to continuously study the market. It is in this way there can be a continuous effort to understand the competition in detail and enhance meaningful understanding of customer needs. It is also in this reason Apple Incorporated was able to continuously stimulate needs for its existing product offerings. Part 6. Description of Selected Strategy The selected strategy of Apple Incorporated is a specific step for its competitive advantage. Competitive advantage is necessary in the midst of intense competition (Porter, 1990). Focused differentiation is not an easy strategy because this requires understanding more basic inputs from the customers instead of purely coming all from the organisation. This is a way of eliminating personal biases and the entire move should be based entirely on what is happening in the external environment. It is in this reason why Apple incorporated has substantially considered pursuing focused differentiation amidst the continuing effort of competitors to create counterparts for it. There is no turning back for Apple Incorporated because what it does so far is a matter of consistency. It is a need for Apple Incorporated to consider consistent strategic moves because this is how the customers perceived its market performance and value creation of its product offerings. Thus, focused strategy has proven to be effective strategy for Apple Incorporated over a long span of time it faces tough competition in its industry. Part 7. Conclusion (75) The case of Apple Incorporated is a common issue in the global business and economy. The intense competition between competitors in the industry where Apple Incorporated belongs is a stepping stone why there is a need for each organisation to go for competitive advantage. This is an ultimate way how an organisation can meet its corporate goals in the process. In line with this, there is a necessity to evaluate corporate performance. Mostly, financial performance has become the common and central measure of corporate success. However, there is a strong consideration of customers, internal business process and learning and growth. These are all essential components in order to create balance and substantially obtain goals in the business operation. References Porter, M. E. (1990) Competitive Strategy. New York: Free Press Read More