The Macro Environment Analysis of Apple Inc - Case Study Example

Case study on Apple Inc Contents Contents 2 Question 3 Introduction 3 Discussion 3 Conclusion 4 References 5 Question 2 6 Introduction 6 Discussion6 Conclusion 7 References 8 Question 3 8 Introduction 8 Discussion 9 Conclusion 10 References 11 Question 1 Introduction Apple Inc having it’s headquarter in United States are involved in manufacturing, designing, and marketing of portable digitalized music players, computers, mobile phones, media devices, etc. The macro environment analysis of Apple Inc can be executed with the help of framework of PEST analysis. The major portion of revenue is contributed by the US for Apple Inc. The company operates in the technology and software industry. Wars, terrorism and bad global relations greatly affect a company operating in this sector. Discussion There was a major turmoil in the technology and software sectors in US when the country has engaged into war to fight terrorism (Peng, 2009, pp. 94-95). Apple also faced the same challenge and it had no control over the relationships with other countries. Most of the products are manufactured by the company outside US such as in Ireland, Czech Republic, China, Korea etc and any kind of conflicts with these countries would directly have an impact on the business operations of Apple Inc. The economic factor comprises of global recession that influences companies operating in this sector (Kahneman and Tversky, 1986, pp. 251-278). To meet such challenges the company has designs unique products, adopts financial instruments such as option contracts and foreign currency forward, and the company even spreads across currencies its financial assets. The social factor in today’s world is more aligned towards new technologies and in this case the company is regarded as a king of technology in terms of its quality and design. The others social impact is in the form of music industry which has occupied a market in cyberspace and taking this into consideration Apple Inc has developed the biggest virtual music store known as iTunes. The growth of technological factor has influenced the business growth of companies in this sector (Cole, 2003, pp. 113-114). Conclusion The macro environmental factors comprise of various forces that affects the performance of an organization. The major factor that affects the growth of Apple Inc is the purchasing and spending pattern of people. The economic factors of the financial year 2010 were less in comparison to that of 2011. The revenue growth of the company has increased in the present scenario due to sale of iPods and iPhones but the same is not true for the personal computer section of the company. The political factors prevailing in various regions in which Apple operates has enforced the company to contribute lump sum money towards political activities. The company has contributed $580,000 approximately in the recent years for the political activities. Apple Inc in order to tackle various cultural factors has targeted all the market segments and launched affordable iPod to Macbook and even has designed luxurious iPhones and iPods. References Peng, M. 2009. Global Strategy. Cengage Learning: USA. Kahneman, D., and Tversky, A.1986. Rational Choice and the Framing of Decisions, Journal of Business. Vol. 59, pp. 251 -278. Cole, G.A. 2003. Strategic Management. Singapore: Cengage Learning EMEA. Question 2 Introduction The capabilities that Apple Inc contains are design and creativity as the focus is more of product design and high end marketing, engineering excellence and innovation, and the HRM policy where the employees contribute greatly towards the success of the company. The Ansoff matrix helps in identification of various strategies that can be adopted by a company so as to gain competitive advantage in terms of product or market growth. Discussion The Ansoff matrix comprises of four strategies on the basis of product and market combinations such as market penetration, market development, product development and diversification. (Luo, 1999, p. 67) The market penetration strategy is a method of increasing sales without deviating from the original product strategy. This strategy encompasses two main parts firstly is to increase sales to the existing customer base and to acquire new set of customers for the existing customer base. The way through which this strategy can be incorporated by Apple Inc is through endorsements which would attract more of customers to purchase Apple’s products as this kind of endorsements would build a perception of the customers that the products are really good. Another way can be through bundling of its software’s and programs (De and Tonchia, 2003, pp. 947-976). The company can even implement more of applications based on iCloud, Face time, etc so that their products are the most unique amongst its competitors. Apple Inc can even divide its product range into different pricing labels so that it can cover more amounts of market share and not just the premium segment customers. The company sets new missions with this strategy and the similar strategy can be adopted by Apple Inc by expanding into regions of European markets, Japan, Latin America and some of the untapped markets which has a great scope for the technological sector industry. The third strategy is of product development which encompasses selling new products with completely new features to its existing market of business operations (Lasserre, 2012, pp. 104-105). The product development strategy has always been adopted by Apple Inc so as to gain a competitive advantage and sustain in the highly competitive business environment. The lateral diversification strategy is best suited for Apple Inc as it comprises of developing a completely a new product range that do not have any relation with the current business and would be appealing to a different market segment. Conclusion On the basis of the Ansoff matrix structure there are major strategic options that can be adopted by Apple Inc. The first strategy is of product development through which the company can incorporate certain additional features such as bigger screen and better resolution, and even can change the outlook of the products they sell. The second strategy would be of market development and this would comprise of two sections, firstly it would be capturing markets of Latin America and Japan, and secondly would be analysing the consumer demand of various segments and then position their products according to that so that the products are not only designed and launched for the higher section of the society. References Luo, Y. 1999. Entry and Cooperative Strategies in International Business Expansion. USA: Greenwood Publishing Group. De, T. A., and Tonchia, S. 2003. Strategic planning and firms’ competencies: Traditional approaches and new perspectives, International Journal of Operations & Production Management. Vol. 23(9), pp.947-976. Lasserre, P. 2012. Global Strategic Management. Singapore: Palgrave Macmillan. Question 3 Introduction Value chain can be defined as the internal activities within an organization that is used in transforming inputs into outputs. Value chain analysis is a method through which an organization identifies the support and primary activities that is required to add value to the finished product of a company and then evaluate the different measures that can be adopted so as to increase differentiation and reduce the overall cost. Discussion The value chain analysis helps in determining where the competitive advantage of a company lies and what are the weaknesses of the company by analyzing the various internal activities. The industry value chain is well described in the diagram below- (Slack, Chambers and Johnston, 2001, p. 96) The various units contribute towards developing value for the customers and as a result generating revenues for the firm. Apple Inc is known for its quality and innovative technology. The company takes full control of its design part and this is very essential as this forms the greatest asset and USP for Apple Inc. To provide a great experience to its customers and to manufacture high quality products forms the customer value proposition of Apple Inc. The hardware designing is done in two sections by the company comprising of 100 employees one is in America and the other is in North Carolina. The company believes that the most integral part of the product mix is customer’s sales experience in the stores and also when the products are purchased online. It even facilitates them to be closer to the frontline so analyze the changing market trends and to better analyze the customer sentiments (Deming, 1982, pp. 76-77). Apple is ranked as number one in terms of being a technological company holding the largest cash position. The company has internal flexibility in the terms of multifunctional structure. To promote faster decision making and effectiveness it also encompasses casual dress codes. The company has adopted the lean management style and even aligns with the strategy that is having less is more. Apple Inc keeps the organization understaffed so as to be more innovative and productive. The company even implements some of the generous programs for its employees so as to retain the talented employees who would take the initiative to promote the company (Caulcutt, 1995, pp. 110-111). Conclusion The company has its own manufacturing operations and its starts with the acquisition of raw materials. The company follows the principle of ‘doing it on their own’. This has even affected the operations of Apple Inc through not delivering the market offerings on time and even seizing the market. The company in the recent years has realized that outsourcing of raw material would form its competitive advantage as this would cut down the cost associate with technology, manpower and research, but has a negative impact as it would increase the cost of procurement in the supply chain. The company however focuses on improving its technology as that would be more advantageous for long run and even can help in achieving ROI in shorter time span. The supplies even comprises of high risk and the company would be dependent on the suppliers and so has designed Suppliers code of standards in order to have a control on various manufacturing standards, raw material sourcing, and labour issues so that the demand is met on time. The expertise of the suppliers is also an added advantage as they would be more concerned about the quality of the raw materials that would be a part of the hardware manufactured by Apple Inc. References Slack, N., Chambers, S., and Johnston, R. 2001. Operations Management. Harlow: Prentice Hall Deming, E., 1982. Quality, Productivity and Competitive Position. Massachusetts Institute of Technology: Cambridge. Caulcutt, R., 1995. Achieving Quality Improvement: A Practical Guide. London: Chapman & Hall CRC. Read More