Discuss and Analyse the internal and external factors influencing the strategical intent of Apple Inc. You should use SWOT and PESTLE analysis framework to present your arguments related to justification of the strategies and make recommendations for future operations.
Apple Inc is considered as the most remarkable and recognized brand in field of electronics across the globe. Its products contain distinct and innovative features for every variety of commodities. Such multinational organisation is famous for its supreme niche in sector. It has established a benchmark as well as revolutionised personal computing world since its foundation. Steve Wozniak and Steve Jobs are people that are dropped out from college and founded Apple together. In IT sector, Apple Inc engraved its name at apex level as largest IT organisation in the world. It is the biggest information technology corporation might that be at terms of revenue and total assets. Furthermore, it is 2nd biggest organisation in cell phone production industry possessing 115500 staff (as of 2016 July)
For Apple Inc case study, let’s discuss certain basic details about the organisation:
|Industry||Computer hardware, Consumer electronics, online services and computer software|
|Headquarters||Apple Campus, Cupertino, California, United States|
|Revenue||$215.6 Billion (2016)|
|Current CEO||Timothy Donald ‘Tim’ Cook|
|Rivals||Sony Corporations, Samsung Electronics Co. Ltd, Lenovo Group Ltd, Google Inc, Hewlett-Packard Company, Cisco Systems Inc|
|Products||Apple TV, iPad, iPod, iPhone, iOS portable digital music players, OS X operating system, iCloud and others. Applications such as iTunes stores, Mac-App store, App store, iBook store and others|
In Apple case study, identifying internal and external factors creating influence over overall business performance of Apple Inc is the aim. here the focus is on understanding the impact of these factors on strategy of the company and therefore our strategy assignment help providers conduct a detailed analysis to present an effective evalaution of Apple Inc. The study concludes that is it important for Apple Inc to consider micro and macro environment factors for continuing with business activities successfully. For determination of the aspects for the Apple Inc case study information is gathered through different range of sources such as journals, published papers and other case studies that the company conducted. For reviewing business process framework, of Apple Inc there exists two techniques applied for analysis such as PESTLE analysis for analysis of external factors and SWOT analysis for analysis of internal factors that influenced company’s performance.
It is famous analytical framework for identification of internal challenges and strengths along with threats and opportunities prevailing in external market. It enables managers towards proper environment scanning for organising things in an efficient manner. SWOT is an acronym of
For improving strengths, it is important for an organisation to eliminate weaknesses, grip the opportunities and foresee threats.
Apple Inc SWOT analysis
Leading innovator among electronic brands
Since the year 2005, Apple Inc has steadily ranked its position at top level in BDG's list containing fifty companies due to its unique quality electronic devices. It is considered as market leader for consistent product innovation in IT market such as Iwork (presentation program) as well as Itunes Media player. However, Apple Inc is presently the biggest online retailer for streaming software solutions, videos a music. Through enhanced customer approach, it has expanded its coverage.
Remarkable growth in sales each year
For 2016, Apple Inc has experienced massive growth in sales, which led to considerable improvement in financial performance. It is positioned in 2016 100 Most Worthy Brands as per Forbes. It possesses an aggregate capital $416.62 billion. In a year, Apple would have to wait for thirty-eight percent revenue development until end of 2017 March.
Apple Inc annual report
Fiscal Year September-October, amount in USD
|Sales Revenue||Costs of Sales (COS) incl. D&A||Gross Profit||Net Profit|
|2011||108.6 B||64.08 B||44.52 B||25.92 B|
|2012||155.97 B||87.92 B||68.06 B||41.73 B|
|2013||170.87 B||107.24 B||63.63 B||37.04 B|
|2014||183.24 B||112.55 B||70.69 B||39.51 B|
|2015||231.28 B||142.26 B||89.03 B||53.39 B|
|2016||214.23 B||131.51 B||82.72 B||45.68 B|
Strong brand recognition
Considering the Apple case study, it is evaluated that the company has invested $4.5 B at the year 2013 for carrying out R&D activities in comparison to $2.4 billion investments at the year 2011 for broad review of market. Having the aim of targeting towards direct sales, Apple Inc located the branches at heavily populated areas, which could contribute towards revenue growth as well as achievement of positive outcomes. The organisation started entire control of the supply chain and reported successfully about the code of conduct to its suppliers in order to brand recognition and goodwill. Efficient maintenance of the practice has helped the company to gain loyalty of customers waiting for purchasing new version of products of Apple.
Strong marketing team
In Apple case study, CEB stated that for approaching customers of accurate information about customers is being furnished by them. It contains customer’s search for kinds of products rather than multifaceted and complicated websites. Apple Inc exactly does such activities since a long period during involvement of easy process for marketing of its products.
For having proper understanding about the Apple case study, Mac vs PC advertisement could be considered. The advertisements represents two boys standing along with white backdrop arguing that PC is not as good as MAC in all sense, instead of arguing over others matters such as its length, its price, professional background, ways to purchase MAC and others.
High quality of experience of customers
In Apple case study, it is observed how Apple manages to make effective solution for ensuring sustainability of long-term relationship with buyers for enhancing its products’ sale. For persuasion of unbeatable or undeniable trust of buyers, customer provision department of Apple Inc applied certain steps:
Premium price of the product of Apple Inc is its prime limitation. Certain customers comment the organisation for having premium pricing strategy; nevertheless, certain buyers authorise its conditions by providing label to the company as “Premium” gadget-maker. The fans of Apple products justify the label by saying that the brand is made for the people who have the affordability of taming a pony. In simple words, Apple tends to be labelled as BMW instead of Ford. However, since the buyers experience other alternatives applicable part from Apple Inc, it has negatively affected over sales performance of the organisation. Other brands such as Microsoft and Samsung provide similar features to Apple and that too at much lower price. In accordance with strategy analytics, Apple experienced a reduction in base of customers, in comparison to 2012 from 93 percent iPhone purchase reduced to 88 percent in 2013. Therefore, each year its rivals offer quality product to customers at affordable rate.
|Apple||iPhone 7 of 32GB|
|Samsung||Samsung Galaxy S7 along with a 32GB micro SD card|
Apple Inc founder, Steve Jobs forecasted that “No one” would use the big phones. Vividly, whatever he predicted was wrong. It predicted futures of certain brands such as Phablets ineffectively. Apple did not introduce mobiles with big screens even subsequent to promotion of tablets. The performance of Samsung in the IT market was better as compared to Apple through launch of Galaxy Note on 2011 instead of Phablets. There is a gradual increase in demand and craze of phones having big screens from the end of customers.
Dissimilarity of various OS
Customers using any different OS find difficulties in opting or comfortably using OSX or iOS. The simple cause behind issue is that customers do not find simple to switch completely towards different operating system after comfortably using any Os. For instance, switching from PC to MAC finding it difficult practically for using it initially is a limitation. For example, a person is familiar of using the “Start” menu in PC whereas at Apple devices “Finder” option is needed to use for finding out other files, documents and apps.
Reduction in Apple Iphone’s market share
As “Kanter Worldpanel ComTech” conducted survey for analysis of smartphones’ sale in 2015, it was analysed that Apple phones’ market share reduced. As per finding made in survey on February, it was evaluated that the reduction persisted for 2 months in Japan, US, Germany Spain, Italy and Great Britain leading to heavy losses of customers in the organisation. The organisation was unable to convince the buyers to shop for their iPhones. Let’s consider information distinguishing reducing market share associated with iPhones at various nations.
Excessive reliance over Iphone and Ipad
Income generated at Apple Inc was highly dependent over sales of iPhone and iPads. In 2013, 72.1 percent of sales was generated through the sales the two mentioned rage of commodities of the organisation. Finally, a decrease in the sales volume of the both the products created a negative impact t over the brand's feasibility and sustainability.
Defect in latest products
Through statement to the media of New York Times, Apple gave a confirmation that iPhone 5s products was defective due to which the customers of the products face certain issues such as low battery life and others. Certain issues in iPhone 6 were observed subsequent to its launch. However, there has been an immediate resolution of the issues by Apple engineers.
Enhancing demand for products of Apple
According to recent studies, products of Apple are achieving elevated demand, especially for new launch of the Power Mac and PowerBook commodities with latest upgrade to the Mac OS X. Apple’s CEO, Tim Cook stated that demand for latest Apple Watch has surpassed its supply. Because of it, they pressing back the pre-order deliveries to May or after. The loyal customers of Apple are keenly waiting for latest iDVD and iMac line products.
Gradual development in communication devices’ market
In an interview, Apple Inc’s CEO stated that its products are not designed for sale at lower prices. Always it aimed at sale of products of high-end nature. In Smartphones’ field, it celebrates the rising market demand with every passing period even subsequent to possession of difference in price from the rivals.
Apple Inc’s global share in the Smartphones
|Period||2012 Q2||2013 Q2||2014 Q2||2015 Q2||2016 Q2|
A broad untouched future market in commonwealth nations
Yet, there is no realisation of hope of development in electronic industry by Apple. High probability of income in is expected in middle-class section of commonwealth nations. Apple is required to consider the fact that Britain is closely working with commonwealth nations. Hence, Apple possesses great opportunity of gaining advantage through its allocation in the market of these member-countries.
Development in cloud-based services
Ability of iCloud innovation in increase of company’s earnings in upcoming period is expected. In Apple case study, it is observed that Apple possess vision of services’ expansion along or opportunities of adoption of latest strategies for engagements of new audience in its services for meeting high demands for services of the iCloud.
Development in surroundings for electronic communication
There is a consistent innovation in world of the electronic communication along with the devised in complicated structure. The organisation is required of maintaining pace; else, the rivals would beat it in a short time period. According to apple case study, it is regarded as intense challenge before Apple along with its position in the market in near future. Communication industry possesses tough rivalry and the organisation is forced for introduction of innovative designs or modifications in products for meeting customers’ expectations.
Tax scams and damage of repute
Apple’s involvement in tax scam lead to huge repute damage. The news about the scam has spread in short time period. $44 billion was reserved by Apple as substantial amount room its earnings for approaching the taxmen. The tax perspectives of the organisation are nothing and minimum amount as tax are reimbursed by it. For analysis of income’s source from the foreign business operations carried out by Apple, tax official were required of making a guess.
Breach of IP (intellectual property) rights
There has been observed a fault in the policy associated with IP rights in Apple. I case of infringement of Apple’s patent rights it used to be informed about the breach sometime later instead of being notified immediately. Consumption of much time in getting to know about the infringement has resulted into tolerance of intense damage to the services and brands.
Development of the Android OS
Information related to sales made in 2015 of the smart phones to the buyers according to Operating System (Thousand of Units)
|Units in 2015||271,010||48,086||8,198||1,229.0|
|Market share in the year 2015 in %||68.5||20.2||9.9||1.4|
As represented in the information, it is apparent that the organisation possesses intense threat of losing its consumers to the Android OS.
In the case study of Apple Inc, PESTLE analysis has been done in a critical manner. PESTLE framework is considered with external factors’ analysis, which play vital role in executive of critical research prior to the initiation of fresh project. The managers assess the risk posed by identified factors along with the application of knowledge is made sure of forming constructive decisions for an organisation. PESTLE is an acronym of six considerable and interrelated factors that are mentioned below:
As compared to the SWOT analysis, it primarily emphasises over eternal factors of macro environment that is likely to influence the current or potential situation and position of business.
Apple Inc PESTLE analysis
It is important to identify that Apple obtains a prime part of the sales through places situated outside America. The contribution of sale of Apple’s product outside US is greater than $113.8 billion. On the other hand, revenue generated from sale of Apple’s products within US is $68.8 b. It case study of Apple it is vital to evaluate the extent of adverse impact, if any, of political revolution or disturbance over the organisation in operating nations.
Suicide suit against the largest Apple supplier in Taiwan
Certain cases associated with suicide were registered against the largest Apple supplier in Taiwan named Foxconn. Because of the unexpected condition, Apple was forced to undergo huge political pressure. Suicide cases got registered against Foxconn on May 2010, where the plaintiff claimed that Foxconn is held liable of suicide attempts of certain employees of its company. It held liable for forcing its employees to work for long hours, because of which two employees of its organisation attempted suicide helplessly. Furthermore, another supplier of Apple was also reported to have been responsible for injury of sixteen employees.
Political issues at China
As China is regarded as a nation where the labour is available at low cost, Apple’s production activities is hugely relied over the nation. Nevertheless, the disrupted political situation of China creates difficulties and negatively affects the manufacturing operations of Apple significantly. Due to the issue, products expenses of the organisation are rapidly growing. Furthermore, for promotion of maturing activities in US, imports of China have made certain restrictions. In the Apple case study, details about influence over Apple being an American-based organisation of political bonds made by American government with the Government of China are considered as well. The biggest concerns of the organisation are that its attempt of attiring ad alternative of production at China would enhance products cost leading to increase of Apple products’ price. Additionally, Apple might experience considerable loss in Chinese market share, because of rising nationalism in people living in China. At such cases, it might be a target for representation of protest in China against the anti-Americanism practices.
Although government of UK tends to be stable government, threats associated with terrorism prevails always. It could create a negative influence over the organisation. Apple is presently facing political issues of enhancing tensions amongst coalition of the ruling as well as sagging the popularity of the government.
Tim Cook Prohibition at Russia
Apple’s CEO, Tim Cook publicly accepted that he is a homosexual individual on October month. It resulted in suggestion of Ban or prohibition of his visit towards Russia through a Russian lawmaker. He is famous for possessing harsh and strict approach towards propaganda of gay.
Because of conditions such as recession along with other crisis, the company’s income is getting affected negatively. Moreover, as compared to other businesses, the Apple Inc would be negatively affected due to premium pricing strategy and high-class products.
Influence of the global recession
Apple Inc witnessed sluggish economic development in 2013 along with 2014 due to occurrence of the 2013 global recession. Many other companies along with Apple Inc were mostly influenced while the global recession occurred.
Reduction in sales due to global recession
|2011 - 2012||50%||31%||78%|
|2012 - 2013||9%||4%||13%|
Economic issues at Europe
In the Apple case study, it has been discussed that variation in Europe’s economy has influenced Apple directly. It is resulted into a decline in its revenue to 16 percent during 3rd quarter of the year 2012 in comparison to the revenue in similar prior at previous year
Enhanced rate of inflation at US
The organisation kept substantial cash amount, which influenced its business at time of enhanced rates of inflation in USA. Nevertheless, a careful fund billionaire named David Einhorn, sued Apple for payment of dividend amounting to $137 b. It assisted the organisation towards usage of substantial cash in dividend payment.
Rise in labour cost at China
China being the hub for production of the products of Apple became a common fact. Nevertheless, the Chinese government presently, decided minimum wages in the nation, which resulted into development of cost of labour at China though, it is relied over different area and other factors such as overtime, pay, food, house and others. During consideration of official figures through Trading Economies at the Apple case study, rise in wages was observed in few areas such as Northern Hebei Province that witnessed a 22 percent increase in wages on last year. On the other hand, a city named Southern Guangdong reported 5 percent to 17 percent rise in wages. It is observed that, wage increase is significantly affecting rise of Apple products’ price. Additionally, it would enhance total cost even if Apple would look forward to other alternatives.
Rise in US dollar value
Increase in value of US dollar lead to increase in the exchange rates, which has created a significant impact of the price of the products of Apple. The potential and presents market of Apple are the nations such as China and Europe, however, increasing differences of US dollar with other currencies such as Yuan and Euro leading to enhancing cost and framing the products of Apple more expensive. In usual situations, Apple’s revenue is used to enhance by eight hundred points. It implies that Apple would have generated $52.8 b as revenue in spite of $49.6 as revenue recorded in 2015 in case US dollar worth would have not enhanced
Because of globalisation, certain factors have provided positive contribution and created a significant impact over Apple Inc’s business such as gradual development in reputation and use of virtual world, current lifestyle and others.
High-profile life of customers
Everyone is aware of the fact that Apple Inc is a premium and leading brand across the globe. It provides definition of its personal brand; which helps the customers to purchase the products effectively. It is not concerned with procurement of iMac or iPhone. The buyers due to its USP, innovative designs, straight and simple marketing strategies, demand it as well as premium pricing of products. Finally, it became status symbol within the society because of its exceptional high price, enhancing affordability for high-class people in the society.
Future market share at 3rd world nation
The case study of Apple Inc states, in upcoming years the organisation would have high scope of identification of potential market reach in 3rd world nations such as Africa. The people belonging to the nations mentioned are not aware of Apple’s products. The organisation should form strategies for exploring and penetrating the products in the unexplored market for understanding latest probabilities of revenues generation.
Moral aspects of determination of production procedure in China
Certain customers might think that the organisation is lacking social awareness and responsibility since it performs manufacturing activities at China while it could be a creator of job for home nation. Yet, it is interrelated to China for getting labour at low-cost for production. The factor might restrict its appeal towards few people.
Brand achievement in many nations
The brand has undertaken certain acquisitions such as “Embark Prime Sense and Topsy” along with other alliances such as Sony, AT&T, Philips and Motorola for attainment of satisfaction of customers and fulfilment customers needs in most effective way. The organisation considers various brands’ social background.
As far as earning revenues are concerned, IT stakes prove to be higher in comparison to other industries. Apple is regarded as one of the enhancing sector that has developed gradually as time passed. It is proved that an organisation that desires of earning well should have bring innovation in business at regular intervals.
The benefits associated with 760 subscribers of China Mobile
In 2013, Apple reflected that it made cracked a deal with the China Mobile for attracting the customers towards iPhone produced by it that previously was controlled by other android smartphones that are low-budgeted. By the deal, Apple would get considerable entry in China market and 760 subscribers of China Mobile at a large level. In accordance with contract, product of Apple Inc such as iPhone 5S and iPhone 5 are available at China on the retail outlets of Apple along with China Mobile.
Assessment of minds of customers
I accordance with 2015 report, Apple invested $8.7 b in R&D activities, which cost the company for probably 3 percent of net sales. The researcher purpose was understanding customers’ approach through having short lifecycle of the product of industry.
Preference towards screen-size
The USP of Apple is its attractive design. It is committed towards improved concepts and designs. The attractive and edgy designs of the organisation is quite complex for its rivals to match. Nevertheless, as time passed, people have started preferring larger sizes of screens.
|Screen selection||Sub – 4”||4.0” to 4.3”||4.5” to 5.0”||5.0” to 5.5”||5.5” to 5.7”|
|Comments / Description||Regarded as adequately big||Smartphones such as “Samsung Galaxy Thunderbolt and S II” enhanced size to the 4.3 inches.||5.0” + electronic products got famous enormously||Samsung galaxy G4 and S6 were highly demanded due to bigger size.||Latest windows phone that Microsoft launched was highly demanded in few days.|
Nevertheless, the last product of Apple iPhone 6 possessed a mere screen-size of 4.7” and the iPhone 6plus possessed 5.5” display.
Similar products offered by competitors
Google and Samsung considered as the strongest and prime rivals of Apple, who is focusing over improvement of its services that once was its prime characteristics. Google didn’t consume one year for development of payment app unlike Apple. Within a short period, Apple pay had to face tough competition with Google Pay. Google represented its capability of developing exact commodity, applications, or other service, which could be a risk for Apple.
Market limitation for latest products
Apple possess small base of customers as it promotes limited commodities for the customers. Along with the products such as Apple TV, really have selective customers.
Rising cyber crime threats
In practical era, Apple is unable to position its brand when cyber crimes are considered. Apple has been less protected and quite vulnerable for the customers when considering cyber crimes. As far as security is concerned, Apple gains a competitive edge over its rivals.
As far as legal aspects are considered, Apple is quite weak because it deals in global market, which involves different legal policies and legal problems.
National legal issue
Although USA, being is Apple’s native soil is creating legal issues for the company. In previous year, Apple had to reinstate imports of certain past applied in the iPhone. The American government banned those parts.
Financial facilities through Apple Pay
Apple provided monetary services through Apply to its customers. It has recently entered into high-regulated financial or banking sector that could take the organisation to enhanced level of regulation. To render such financial facilities, it might lead the organisation to certain legislations
Breach of the IP laws
Apple possesses a range of the intellectual property such as music,, software, which are manufactured by their brands. The important portion of Apple’s revenue is generated from the production of software. It enhances its susceptibility towards litigation along with piracy.
Entering automobile industry
Apple is effectively prepared for entering to industry of automobiles. It is motivating its team for beginning with manufacturing of the electric transport by the year 2020. In previous year, Apple invested $6.04b towards carrying out R&D activities. Tim Cook being Apple’s CEO is facing huge pressure from shareholders’ end for reimbursement of money invested. In accordance with the legal suit filed against Apple, it is stated that it is aiming towards initiation from scratch and therefore, in basic phenomena for launching such a commodity at the stage. An organisation needs period of a minimum of ten years. Apple is moving forward for launching it by the year 2020.
The revenue of the organisation could be influenced negatively due to fluctuating environmental factors for example disposal.
Disposal of used or non-working electronic devices
Apple is experiencing immense issues during disposal of unwanted electronic junk. Because of batteries containing lithium in electronic devices, the organisation is facing massive hurdles, during discarding them. This might cost company’s bright future. Apple is having to incur much cost as it includes environmental factors.
Pollution issue in China
The production procedures as well as other facilities offered by Apple are its biggest concerns as it leads to the rise in environmental issues and pollution along its different side effects. For ensuring a decrease in the environmental problems caused by facilities and products procedures of Apple, it is required to spend much capital over future procedures. It would result in massive increase in costs.
Attempt to cut greenhouse effect increases cost of production in China
In current environment, the detrimental greenhouse gases surround people. For reduction of the gases along with usage of the fossil fuels, China has taken an initiative. Possibly, the initiative could enhance the electricity rates at China. Leading production expenses may also enhance for Apple.
As the global warming is developing gradually, Apple might experience issued related to transoceanic shipping. As it is an important aspect of the company’s supply chain, it is important to mentioned.
Increase in costs of electricity
Apple’s reliance over data centres along with internet infrastructure enhances susceptibility to the rates of the electricity. The organisation is required to incur more cost in the production processes.
Subsequent to the execution of a detailed evaluation of internal factors within SWOT analysis in Apple case study, our adept paper writers concludes that Apple Inc possesses an edge on strengths and opportunities over weaknesses and threats. As far as leading position in IT industry is concerned, Apple Inc is enjoying available opportunities and would continue enjoying it in near future. Nevertheless, revision of past strategies for effectively responding towards present and potential threats or weaknesses would be useful for it, as it would help the organisation to improve its sustainability in the market.
Considering PESTLE analysis, it is concluded that Apple Inc could prosper within IT industry in upcoming five years despite facing considerable challenges. The biggest cause behind assured success of the company is its exclusive capability to adapt with the challenging environment. The distinct features of the Apple’s product help it to achieve competitive advantage. It could be represented in considerable development in revenues and sales volume. Therefore, it is suitable of stating that Apple Inc is a leader in electronics industry and would continue its position in upcoming years. This case study solution is written by our experts offering reliable case study assignment help services to help you understand the proper way of analyzing a case in relation to various theories and concepts and present effective solutions for the future operations and profitability of the business.