Development of a Strategy for Apple Co

Introduction:

Purpose of the report:

The main purpose of this report, “Development of a Strategy for Apple Co, “is to write the strategy report of the Apple company for the board of directors of the firm. This strategic report critically analyzes the business environment of the organization and develops the strategies that are implemented by the company. For the consideration of the board of directors, this strategy report is submitted to them.

Read more: Operations Management of Apple

Introduction of the company’s operations:

The selected company for developing the proposed strategy report is Apple Inc. It is an American multinational company that served different types of advanced technologies. The headquarter of Apple company exist in California. Apple is one of the largest technology firms with a revenue of US dollars 394.3 billion in the year 2022. It is a public firm that was founded in the year 1976.

Size of the organization:

• Total number of employees: In the year 2022, the total number of employees of the Apple company is about 164,000.
• Total number of locations: The total number of locations as retail stores of Apple company is 526 in the year 2023.

The proposed strategy of the organization:

The differentiation strategy of Apple company is focused on innovative products and services that help to deliver higher value to the customers. Apple company develop strong brand recognition and enhance its market share of the company. In overseas marketing. Apple’s business can be characterized as developing the vertical integration strategy.

The financial situation of the company:

Apple announced the financial results for its fiscal year 2023 as posted a quantity revenue of 94.8 billion in dollars and down 3% year over year. The quarterly earnings per diluted share is about 1.52 dollars unchanged every year.

The general state of the sector or industry:

The operations of Apple Inc are related to the industry of consumer electronics, software services, and online services. All of these industries are growing for economic reputation and the growth of business decisions.

Key competitors:

There are different competitors of Apple company including Samsung Electronics, Xiaomi, and Google exist. Apple company develops different strategies to improve the business progress and get a competitive advantage.

Macro-environment analysis:

Apple company runs its operations all over the world so, it is a global multinational technological firm. Different factors that affecting the business growth and its reputation in the global market. To evaluate the global reputation and the analysis of factors that affect business growth, the PESTEL framework is used.

PESTEL framework:

It is the framework that consists of political, economic, social, technological, legal, and environmental factors that directly affect the external environment and reputation of the business. Apple Inc is a technological company that deals with the greater practices and ensures the external environmental forces. Tim Cook the CEO of Apple company faces different external environmental factors that affect the business values and update the most reliable plans as required to improve the business decisions.

Political:

The policies of the government play a vital role that affecting the expansion of the business organization in the country. Apple outsource the manufacturing to China and the conflict ensuing between the USA and China imposed restrictions on the import of renew the US businesses of manicuring. It develops unrest for the court as it makes them vulnerable to the political aspects.

Apple could become a strong target of growing nationalism as well as anti-Americanism in China which reduces its market share. The dominant position of the Apple in field of music also leads the anti-trust concerns.

Economical:

In the market of China, the labor cost becomes increased and could take away the benefits to the Apple company. Apple company’s performance is affected by the change in the level of income of the people because it targets the higher-level income people. The change in exchange rates made the expensive for Apple to do business in developed countries.

Social and cultural:

There are many areas where people are not familiar with the products and services of Apple company. For example, with the biggest growth in the spending of consumers in the future areas of the world like Africa, people are unaware of the products of Apple Inc. Among the social-conscious consumerism, there is an ethical concern that appears about the manufacturing of the products in China as its limits the products. Consumerpreferences and their change of trends, the perception of brand and loyalty, and the digitalization of society directly influence the Apple company.

Technological:

The success of Apple company is built on the ability to innovate as well as build groundbreaking products and services. It is a company that continuously invests the research and development to stay ahead of the competition. By adopting emerging technologies, it is needed to keep up with the artificial intelligence 5G connectivity, the virtual reality. Digital ecosystem, cybersecurity, and data privacy are also the technological factors that affect the performance of the Apple company.

Environmental:

The change of climate is the issue that affects the supply chain of Apple products and its overall operations as consumes significant amounts of energy. The company should focus on the improvement of emery efficiency by utilizing the renewable energy system. Apple company must periodize its responsible waste management like reducing the waste of packaging and designing recyclable and easily repairable products to protect the environment. Apple company’s products rely on rare earth metals that are supportive of the environment. So, the company focuses on sustainable sourcing activities. In finding alternatives to minimize the environmental impacts, Apple company complies with various environmental regulations as well as standards.

Legal:

As a technology firm, Apple company relies on its Intellectual Property including trademarks, patents, and copyrights to maintain its competitive advantage. The General Data Protection Regulation and the California Consumer Privacy Act direct impact the product design and the business practices of Apple company. Employment and labor laws, antitrust laws, environmental regulations, and tax rates also affect business capabilities. Changes in the corporate tax rates and incentives. The strategic decision-making of Apple and its profitability directly impacted.

Sector analysis:

The operations of the Apple company are related to the industry of technology. The success of Apple company is attributed largely to its ability to innovate as well as bring unique products to market that have the substantial loyalty of the brand. the strategies of product development as well as marketing reveal a higher level of awareness of the need to deal with the marketplace forces. Here is an analysis of five forces on the position of Apple company in the sector of technology that refers to the competitors as well as the bargaining power of buyers as the 2 strongest marketplaces forces. These forces directly affect the profit of the Apple company. On the other hand, the threat of buying, the bargaining power of suppliers, and the threat of new entrants are the weaker elements for the Apple company’s success. Apple company is one of the most profitable and demanding companies because its products in the technological sector directly raise the broad processes and the central tendencies. The research and development areas and the marketing activities of the company will lead to the most specific change that will observe or sustain in the future.

Porter’s five forces model:

1.     Rivalry competition:

The competition level of the major companies with Apple Inc in the technological sector is considered as high. Apple company is in direct competition with the different companies in which Google, Amazon, and Samsung companies exist. All of these competitors of Apple company invest a lot of amount in the research and development area of the business. So, certain operations of Apple company are affected. there is a low attaching cost is the component that makes very high of this sector among the competitors. Apple company develops unique and innovative products or services to maintain its image and position in the areas where the competitor exists. It is the strategy of the company to reduce the entire plans of the competition.

2.     The bargaining power of buyers:

Two types of bargaining powers affect the performance of the Apple company. Individualbargaining power as well as collective bargaining power are these forces. Individualbargaining power is a weak force but the collective power of consumers for the bargaining is very high. Because it directly affects the revenue of the Apple company. Establishing the large consumer database, Apple company has strong success policies that can improve the business classification and generate the proper success records. Abounding the iPhone and the favor of clear practices, the company’s practices will be reliable and observable that can be transformed in the future.

Porter’s forces.	Impact.
Competitors.	Strong.
Buyer’s bargaining.	Strong.
Supplier bargaining.	Weak.
New entrants.	Weak.
Substitutes.	Low.

3.     The bargaining power of suppliers:

The number of suppliers of Apple company is higher that’s why the bargaining power of suppliers is a weak force that affects the business values and the performance of the company. The company is free to select from a large number of potential suppliers for the parts of its products. The cost of switching for Apple company from one supplier to another is relatively low because it is reluctant for losing the entire approach. Apple conversely weakens the core position that helps to boost the business values and certain areas of the business success. It is not a major level of consideration that affects the business performance and its overall plans.

4.     The threat of new entrants:

The threat of entering the technological sector is relatively low which affects the performance of Apple firms. There are two reasons for this relatively low force in which one is that there is a higher cost is required to establish the brand name recognition and the second reason is about there is a large amount of investment is required to build the brand and create the most referral points. There is a strong or massive amount of capital is required to initiate the smartphone as well as computer businesses just to spend on the Research and Development areas of the business. Apple and its major competitors have no worries about the threat of new entrants in the industry of technology as it is required to update the internal as well as the external policies that can be relevant to the business.

5.     The threat of substitutes:

The market force of the threat of substitutes is relatively low because subside products are not the same products but act like the needed item. In the case of Apple company, the landline phone is the substitute product for the iPhone. It has a low market force because most potential sub-state products have limited capabilities as compared to the core products of Apple company. Apple company has a strong brand name and image in the marketplace places that’s why the demand for Apple products is higher as compared to the other types of products or phones. To improve the business classifications and generate the best values, the firm’s decisions can be classified in the future. For getting the broad tool and updating the internal flow of the business threats, the business activities can be tackled in the future.

Strategic Position Analysis:

The strategic position analysis of the Apple company depends on the key performance indicators that make the higher success as well as profitability for the business growth. The comparison of the performance of Apple with its key competitors is also the process to generate the strategic position analysis.

KPIs of the business:

In the case of Apple company, the key performance indicators are customer satisfaction, employee alignment and commitment, and market share with the shareholder value exist. All of these key performance indicators directly improve the business classification and generate broad activities related to the given and valuable activities. Key performance indicators of Apple company are the essential elements that have to be taken into account when it analyzes the company’s performance as unique values. To remain resistant to the competition, the overall business performance values become strongly aligned.

1.     Customer satisfaction:

Apple company makes questionnaires as well as online surveys that allow its managers to learn about the needs, reviews, and condiments of the customers. Apple company gets feedback from its buyers to improve the level of satisfaction of the customers.

2.     Employee alignment and commitment:

Apple is a technological firm that recognizer the strong value of having employee alignment as well as investing in keeping satisfied. Apple conducts surveys for random employees or workers to understand the mission statement.

3.     Market share:

In the smartphone industry, the market share of Apple Inc is very huge but in the personal computer sector, the market share of the company is less. It is due to the significant resources of the company.

4.     Shareholder value:

The 4^th key performance indicator of Apple company is shareholder value. The company puts it into the operations of global manufacturing as well as product design to improve the sales vision. In creating the investors for the future of Apple, the development of broad areas is successful as recorded in the plans.

Comparing the performance with its main competitors:

Samsung and Google company are the main competitor of Apple Inc that improve the business values and generate broad insights. Based on the revenue, net profit, and market share, the Apple company’s market and strategic position can be analyzed with its key competitors. Apple company generate higher revenue as compared to Samsung as well as Google company in the first quarter of 2023. The net profit of 1^st quarter of 2023 of Apple company is also increased as compared to the key competitors. So, the strategic position of the firm is high and it provides the broad areas of the business success that refers the sustainable approaches in the future.

Competitors analysis:	Apple Inc.	Samsung.	Google.
Revenue.	$81.8 billion	$47.21 billion.	$74.6 billion.
Net profit.	$19.9 billion.	$527 million.	$18.368 billion.
Market share.	$30.44	$27.14	$93.12

In the global market, the market position of Apple company is strong because it provides the most effective plans and resources to the businesses that are directly ensured with the business objectives. To enervator the organizational practices and update the most specific eras the firm values become strongly held. There is a collaborative decision made by the management of Apple firm and raises the internal policies as related to the current progress in the future. To build the strong market position of Apple company, the firm made clear and accurate decisions that proceed with valuable changes. With the help of business decisions and generating possible trends, the firm’s growth values can be expressed. Apple served millions of dollars to fulfill the satisfaction of the customers that increase the market position and the generational terms in the future. All the activities and functions of the business to improve the greater services. Certain activities and collaboration in the given resources organized the valuable terms.

Internal business environment:

With the analysis of the external environment, the internal environment of the Apple company is also affected. The company invests valuable resources to proceed with the changes and organize the trendiest terms. The management, employees, and the internal associated parties are responsible to improve the strong culture and generate better practices for the company. It shows that the company is stable to get advanced practices and estimate the most valuable plans that can be suffered in the future. In the internal environment of Apple company, employee satisfaction, the strong whelming beaver, and the opportunities that are given by the business to its employees exist.

VRIO framework:

According to the VRIO framework of the Apple company, its internal operations, and the environment can be analyzed. The valuable, rare, imitable, and organized resources are used to get the competitive advantage of the business. As the strategic position er of the company, the evaluation of the internal environment of the company must be held that can transform the operations and build the fundamental practices related to the most valuable activities. The implementation of the VRIO framework helps to create the strongest activities and transform certain abilities. through the activities and generation of competitive advantage, the resources of the business must be evaluated.

Resources.	Valuable.	Rare.	Imitable.	Organized.	Competitive advantage.
The brand.	Yes.	Yes.	Yes.	Yes.	Strong.
Supply chain management.	Yes.	Yes.	Yes.	Yes.	Sustained.
Top executives.	Yes.	Yes.	Yes.	Yes.	Strong.
International product distribution.	Yes.	Yes.	Yes.	Yes.	Parity.
Customer services.	Yes.	Yes.	Yes.	Yes.	Strong.

After evaluating the VRIO framework of the Apple company, it is clear that the management of the business develops the core practices and boosts certain trends related to the convenient goals. The brand, supply chain management, top executive, positive customer services, and the international distribution of the products are the main competitive advantage resources of the businesses that increase the business capabilities and generate the most preferred terms. To reach the valuable networks and operate the functional stages, the business classification can be strongly held in the future. Apple company is the top multinational technological firm that improves business growth and provides the best quality services to customers. Customers and employees are the stakeholders of Apple company that generate higher market share and transform certain activities related to convenient terms. As the internal environment of the business becomes increases then it relies to get the most valuable activities in the future. VRIO is the framework that represents the internal environmental abilities of the Apple company.

Organization’s strategic direction analysis:

Ansoff’s matrix:

According to the Matrix, four different strategies help Apple company to be internationalized. Marketpenetration, market development, diversification, and product development are the key strategies that organize the size of the entire operations of the Apple company in a given or particular area so that success. Apple Inc’s strategic performance can be sustained to get the possible and valuable actions.

1.     Market penetration:

It is the strategy in which Apple company promotes the existing products in the existing markets or countries. There are more than 518 retail stores that exist in the 25 regions. So, the operations of the company to expand the business resources can be raised.

2.     Product development:

Each product develop by the Apple company directly fits in the ecosystem and served the global market. So, the product development strategy of Apple company is reliable to reach particular strengths. The investment of the Apple company in the process of new product development increased to 25.3 billion in the year 2023.

3.     Market development:

 It is the strategy of selling the existing products into the new market of the business. The company’s reliable operations that can be served to get the possible actions will be obtained in the future. North and South America are the major sources of revenue for Apple in the year 2022 which generate more than 43% revenue as American segments.

4.     Diversification:

It is the strategy for selling the new product into the new market and products are updated. Apple company launched a series of iPhones every year which is the greater example of diversification. As gaining short-to-medium-term diversification, the existence of new products in the new market is reliable.

BCG matrix:

BCG matrix or Boston Consulting Growth Matrix is the process that depends on the market share as well as relative market growth of the products. When evaluating the market growth and the portfolio of the products, this metric is reliable. Apple company is a large techno0logicla base product that improves business values and transforms the greater practices. Apple company top products have existed in the cash cow as well as star categories like iPhones and iPad. iPods are the products of Apple company that generate less profit due to the lower demand.

1.     Dogs:

Dogs are the products that have higher partial growth but low market share. Apple company iPods are the products that exist in the Dog category due to the lower demand of the customer and the loss of the potential in the competitor’s market.

2.     Star:

It is the category that relies on higher growth potential as well as higher market share. In the Apple BCG matrix, iPhones are the products of Apple company that break the sales record for seven years. The demand for iPhones becomes increased in the global market that’s why the global market share of the company becomes raise.

3.     Cash cows:

Apple iTunes and Apple MacBook or iMac are the products of Apple products that fall in the category of a cash cow. Over the year, all of these products maintain the market share and improve the cash flow of the business. Apple has a strong image of the brand and a loyal customer base.

4.     Question mark:

Apple smart TV and smartphones are the two products that exist in this category because they give profit and make changes in the future. By fixing the ecosystem issues, the smart TV also exists in the Star categories.

Strategic expansion:

With the higher growth rate, Apple company expands its products all over the world. Africa is the region where the awareness of Apple products is too low. So, the strategic expansion of the company is to motivate the specific operations in the African region.

Entry mode:

To enter the market of Africa, exporting is one of the best strategies that I recommend to the Apple company. Because Apple company has a strong brand name and image that’s why the people of Africa have little awareness of the Apple company due to its brand name and recognition. By exporting products from Apple company from America to the African regions, the awareness of the customers, sales of the company, and the overall behavior of the business becomes increase. So, I suggest the company utilize the best resources to gain the exporting strategy.

Benefits of suggested expansion:

• Apple can generate more revenue after expanding the business into new regions.
• Apple company can generate a higher level of awareness in customers of Africa about the products and services of the firm.
• To access the global talent and boost the overall innovation in the given marketplace of the business through the potential terms.

SAF framework:

SAA Matrix:	Option 01: Reducing the cost of products.	Option 02: Opening of more retail shops.	Option 03: Customization of the products:
Suitability.	5	8	4
Acceptability.	4	1	3
Feasibility.	2	3	2
Total.	11	12	9

According to the suitability, feasibility, and acceptability, the second option, or opening more retail shops is better for the expansion of the business and evaluating certain strengths in the future that can be expressed or maintain valuable growth.

Recommendations:

Here are some recommendations for the Apple company to improve its business environment analysis.

• The company should develop the appropriate global market entry strategy as exporting, franchising, and joint venture to enter the new market with the strong name of the brand. For example, Africa is the new market as it gains less awareness of the Apple company’s information.
• The company should develop the proper training for the employees and workers as the ethical responsibility of the CSR with the educational campaigns that raise the awareness programs of ethical corporate social responsibilities.
• Apple company should open more retail shops as the Suitability, Feasibility, and Acceptability criteria because with more locations the company will improve its market share and the overall business progress.

Conclusion:

This report aims to develop a strategic purpose report for the Apple company that represents the environmental analysis for the board of directors of the company. Apple is an Americana international company that deals with a variety of technologies. So, the overall operations and activities of the businesses that help to generate the proper plans will raise the business capabilities and organize the most valuable plans in the given terms. The PESTEL analysis and VRIO model with the strategic formulation of Ansoff’s and BCG matrix are also defined in this report. Apple’s performance depends on the resources to improve its business strengths in the future.