Apple Inc.’s Strategic, Macro and Micro Analyses

Subject: Company Analysis
Pages: 6
Words: 1522
Reading time:
6 min
Study level: Bachelor

Introduction

According to this SWOT analysis, Apple Inc. can leverage its internal and external strengths to overcome its organizational weaknesses. It is also possible to use these talents to develop its distribution network for consumer goods. New technology product lines have been developed thanks to their reputation and speedy invention processes. When it comes to consumer goods, computer hardware and software, and online content distribution, Apple is up against severe worldwide rivalry and imitation. Maintaining a rapid product development pace is critical to Apple’s long-term success. Copying can be reduced by using technology. To save money, Apple should automate contract manufacture. The company’s expansion into new markets will be aided by collaboration with more distributors.

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Organization Background

Apple’s organizational structure is best described as Spoke-and-Wheel. Steve Jobs had previously been the exclusive point of contact for all matters. Jobs made all strategic management decisions. Under Tim Cook, Apple has restructured its organizational structure. The software and hardware teams and other divisions inside the organization are now working together more closely. Apple’s divisional organization’s higher and lower tiers are based on products and contain product-related departments. Products or parts of products belonging to clients are taken care of here (Li, 2021). The phrase “collaboration” refers to the cooperative efforts of Apple Inc.’s several divisions. In a weak functional matrix, project managers have little authority and influence over a project overseen by top management. Thus, hardware and software development teams can work together. In this approach, the group helps to disseminate vital information to develop new ideas.

Internal Strengths

A company’s success is primarily reliant on internal resources. Its strengths come from the combined efforts of people, processes, and technology. Apple’s manufacturing skill allows it to manufacture its hardware, software, and other items. New digital streaming and payment technologies have enabled Apple to establish its platforms. Apple TV+, Apple Music, Apple Card, and Apple Arcade are new features. Apple’s product quality is mainly due to its company culture. Emphasizing new ideas, change, and creativity led to their best work and a strong business brand culture. Quality sacrifices cost a company market share. Apple’s concentration on high-quality products and cutting-edge technology encourages customers to stick with the brand. Innocence and trustworthiness have made Apple a household name. It is a well-known brand with goods in 25 countries.

Internal Weaknesses

Employees are responsible for most of a company’s flaws. Begin by viewing your company as inferior to your competitors. Apple has a small distribution network because it sells its products with only a few shops globally. Unlike other smartphones, Apple handsets are tough to purchase just by walking into a phone retailer. Apple products are noted for their interoperability. The absence of connectors, unique charger cords, and jack ports add to the cost of add-ons. Because third-party goods and software don’t work, they can’t target customers who want these features. Apple’s high costs worry many. Despite its broad appeal, the product’s massive profit margin has limited its reach. Apple tracking apps have been accused of revealing users’ actual locations. Apple’s commercial methods are also being scrutinized.

External Opportunities

A business opportunity is anything that can make a difference and become an asset for the company. The best opportunities should be taken advantage of following a SWOT analysis. Consumers’ increasing attachment to Apple products is a significant factor in the company’s increasing profitability. Most of the smartphone market isn’t covered by Apple’s narrow product line. Businesses should expand their product and service offerings to compete with other technology giants. The acquisition of AI, Machine Learning, and technology-focused companies and businesses is possible for Apple (Van De Vliert, 2021). Apple will be able to improve the quality of its products with the acquisition of this technology. In addition to the Apple Watch and AirPods. Apple has broadened the scope of its AI products as new technology, and Artificial Intelligence gives the company a competitive advantage.

External Threats

Some threats go beyond the scope of the company’s activities. Despite the risks, it is vital to construct strong areas for future attacks. The company can better prepare for potential dangers by recognizing and measuring the risks. In general, the smartphone industry and ecosystem are developing, permitting new entrants. Supply chains and production are heavily dependent on Chinese suppliers and manufacturers. Up to 20 percent of Apple’s yearly income is expected to be affected by the virus, primarily concentrated in China, Italy, and South Korea. Hundreds of lawsuits have been filed against Apple. It’s the most common reason for people to download and install them. Despite its well-known brand, Samsung, Dell, and other companies compete with Apple.

Macro Environment Analysis: PESTEL

Technology giants like Apple, Google, and Microsoft are well-capitalized. Most of Apple’s employees are of Chinese descent. Despite China’s political and social turmoil, this could negatively impact the country’s manufacturing sector. It may need a lot of money to find an alternative to manufacturing in China. It is possible that Apple’s cost advantages could be lost if China’s labor costs keep rising. The potential market for high-end consumer goods like Apple could shrink in several industrialized countries if middle-class earnings stagnate. Over the next few decades, demand will rise fastest in areas where Apple products are less well-known. As a result, consumers in emerging markets and younger generations in more established markets like the United States find Apple products less emotionally appealing. Some customers in the United States and Europe turn their backs on expensive products. Apple’s products may lose their appeal to eco-conscious consumers if they address ethical concerns about Chinese manufacturing.

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Competitors Google and Samsung have demonstrated their ability to produce similar products and services. Not only will Apple lose these services and products. Apple Pay has recently entered the highly regulated world of financial services. As a result, it may be subject to more government regulation. Less legal action if Apple decides to offer financial services. It could lead to higher regulatory, insurance, and litigation costs. Apple’s revenue comes from IP-protected products like software and music. As a result, piracy and lawsuits are possible (Shtal et al., 2018). Apple’s most prominent environmental challenge is how to dispose of obsolete electronics properly. Electronic device disposal, especially with lithium batteries, can be costly. What may force Apple to bear this cost due to environmental concerns regarding discarded mobile devices? China’s factories are increasingly being criticized for polluting the environment. It may lead to new regulations and higher manufacturing costs.

Micro Industry Analysis: Porter’s Five Forces

Apple needs to focus on the competition and the bargaining power of customers when analyzing the five forces. This external analysis also supports the company’s current stance of constant innovation.” Even though most of Apple’s efforts are devoted to defending its position against competitors and retaining customers drawn to Apple products, the company can successfully address the five external forces through rapid and continuous innovation. Research and development should be prioritized if new products to complement the iPhone, iPad, and other current offerings are developed.

Generic Strategy Recommendations

Apple Inc. should invest more in the differentiation strategy approach. Focusing on the company’s and its IT products’ unique selling points as its common strategy sets Apple apart from other competitors in the marketplace. Product design and user-friendliness are powerful differentiators in the technology industry. To fit Apple’s generic strategy, the company’s products should always be designed to stand out from the competition rather than compete on price. It also should include cutting-edge aesthetics and improvement in seamless device connectivity (Nielsen, 2018). Though Apple’s generic approach distinguishes the company, it should still cater to a large market due to the company’s products being made to fit everyone. Individuals and businesses alike can benefit from Apple’s MacBook product line. A competitive advantage is maintained, and the company’s leadership and position as a high-end and high-value technology company.

Organization Design Recommendations

Apple’s organizational structure facilitates management control. However, CEOs like Tim Cook could theoretically control all aspects of the company. ‘ Effective management of businesses and product-based groups is possible for CEOs and other high-level executives. As a result of the organizational structure of Apple Inc., strategic management initiatives can be implemented quickly and effectively, enhancing corporate cohesion. The immobility of Apple’s corporate structure is a drawback. Many employees cannot respond quickly and effectively when business conditions and market expectations change. To address market trends, the company’s product divisions must first consult the CEO or other senior executives.

Ethical Considerations

Numerous campaigns have been launched against Apple due to labor rights violations at its supplier factories. Ethical issues have been raised about global climate change, environmental reporting, habitat and resource conservation, pollution and toxins, weapons and military supplies, human rights, worker rights, supply chain management, and anti-social finance. Apple is being sued by several families whose children died or were severely injured while working in cobalt mines that are part of the company’s supply chain. To obtain the minerals needed, Apple engaged in practices that degraded the environment. An investigation conducted by Ethical Consumer found that Apple violated laws in jurisdictions Ethical Consumer considered tax havens, which put the company at risk of being used for tax avoidance.

References

Li, Y. (2021). Apple Inc. Analysis and Forecast Evaluation. Proceedings of Business and Economic Studies, 4(4), 71-78. Web.

Nielsen, R. P. (2018). Ethical and legal First Amendment implications of FBI v. Apple: A commentary on Etzioni’s ‘Apple: Good business, poor citizen?’. Journal of Business Ethics, 151(1), 17-28. Web.

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Shtal, T. V., Buriak, M., Ukubassova, G., Amirbekuly, Y., Toiboldinova, Z., & Tlegen, T. (2018). Methods of analysis of the external environment of business activities. Web.

Van De Vliert, D. (2021). Apple iPhone: A Market Case Study. MacEwan University Student eJournal, 5(1). Web.