Analyze the business-level strategies for the corporation you chose to determine the business-level strategy you think is most important to the long-term success of the firm and whether or not you judge this to be a good choice.

(http://www.sec.gov/edgar.shtml

Strayer Writing Standards (SWS).

The External and Internal Environment of Apple

Clarice Torrence

BUS 499

Professor: Joseph Keller

August 12, 2019

Give your opinion on the corporation’s greatest strengths and most significant weaknesses. Choose the strategy or tactic the corporation should select to take maximum advantage of its strengths, and the strategy or tactic the corporation should select to fix its most significant weakness. Justify your choices.

Apple being one of the most valued technological companies has its strengths and weaknesses just like any other company or organization. Perhaps Apple’s greatest strength which has made it become a global powerhouse in manufacturing technologically advanced mobile phones and other electronic gadgets is their ability to create innovative products. For instance, one of the company’s most innovative product is the iPhone which has gone through massive technological upgrades since it was first introduced in the market by Steve Jobs a couple of decades ago. When it was first introduced, the iPhone was one of the most innovative smartphones in the market at that time compared to the other smartphones its competitors were offering consumers (Hitt et al., 2016). One of the reasons is that unlike other smart phones at that time that required a pointing device in the form of a pen to operate, Apple was able to develop a smartphone that allowed its user to interact with it through using their thumb and fingers as the primary pointing devices. The other reason was the ability of iPhone developers to incorporate an operating system and a Graphical User Interface (GUI) similar to the ones found in a desktop or laptop to their smartphones. Other smartphone manufacturers at that period in time used interfaces that similar to the one found in a calculator which was mostly black and white and never had any graphics or color on their displays (Lerner & Tirole, 2015).

Using this as an advantage over its companies, Apple should continue maximizing on these strengths by not only promoting innovation as a philosophy to its employees but also motivate its employee base in order to make them create newer ideas that sustains the company’s innovative productions. One weakness that Apple has exhibited over the years as a corporation is their product pricing which many people have always viewed as being expensive compared to other similar products from other mobile technological companies (Hitt et al., 2016). Fixing this problem of product cost will mean that Apple finds a way of reducing its production costs and later passing on to its consumers such savings that have been made, lowering the prices of its products.

Determine the company’s tangible and intangible resources, core capabilities, and core competencies.

Within the operations and organization of Apple lie many types of resources, capabilities, and core competencies that drive the corporation’s success. Apple’s brand name and reputation for creating innovative products are just but examples of resources the company can brag of unlike other companies whose resources translate only to physical assets. These resources that Apple enjoys unlike other resources can never be bought with cash or dug from the earth but are as a result of years of hard work, patience, and being committed to a course. Apart from that, the company’s other resource is having the ability to create its products on large scales to enjoy economies of scales along with its ability to raise huge sums of capital to spend on research when wanting to come up with new products. Apple has also proved time over time that it has the ability to create products outside its traditional computer industry oriented approach type of business (Hitt et al., 2016). Not only has the company achieved to expand its revenue bases by tapping extra revenues from the music industry, it continues to rake in massive revenues in the cell phone industry too with newer innovations. The core competencies of Apple lie in its research and development activities. Apple not only spends much time and money on researching and developing new products but also does that while maintaining high levels of knowledge and competency in areas of networking, computing, mobile devices among other forms technology.

Choose the two (2) segments of the general environment that would rank highest in their influence on the corporation you chose. Assess how these segments affect the corporation you chose and the industry in which it operates.

One segment of the general environment that highly influences the operations of Apple includes the legal/political segment. The legal and political segment governs the company’s relations not only with its competitors and consumers but also other players in the industry like employees, partners, and investors among other things like policies and operations of the company (Lerner & Tirole, 2015). This segment of the general environment mainly deals with legal issues and laws that a company may face naturally as a result of doing business. Some elements found in this segment that might affect the operations of a corporation like Apple include labor training laws, taxation laws, anti-trust laws, and educational philosophies and policies (Federal Trade Commission, 2016).

The second segment is the technological segment which is one of the highest ranking segments influencing the operations of electronic equipment industries like Apple. With main elements like product innovation, new communication technologies, focus of private and government supported R&D expenditures, and application of knowledge being found in this segment. For Apple, innovating new products is the most important element in this segment with many consumers willing to spend money on what the best technology has to offer. These two segments, political/legal and technological segments, are the biggest general environment factors that influence Apple as a corporation and its success (Federal Trade Commission, 2016). Thus, these two segments rightfully deserve Apple’s attention when it comes to how they are implemented as they positively or negatively impact vital resources of the company.

Choose two (2) forces of competition that you estimate are the most significant for the corporation you chose. Evaluate how well the company has addressed these) forces in the recent past, going back no further than five (5) fiscal years.

Threats such as rivalry among competing firms and substitute products are the most significant for Apple. Unlike new entrants in the industry, competitors of Apple like Samsung, Techno, and Huawei have the resources, capital, and facilities to compete with Apple by producing in large scales hence can provide strong competition. According to a text from the course “Common dimensions on which rivalry is based include price, service after the sale and innovation” (Federal Trade Commission, 2016) Microsoft continues to be the strongest rival of Apple as both companies offer similar products and services to global consumers that include web browsers, handheld computers, and operating systems common in gadgets in the market today. A good example is in the range of similar products these two gadget giants offer their consumers. Just like Microsoft offer its consumer’s tablets that are handheld computers, Apple offers the same range of product in the name of an iPad that serves the same purpose as a tablet. Even though both devices perform the same tasks, they offer a number of different services to their users that may not be included in opposing rivalry products. Thus, the main rivalry between Microsoft and Apple is in the pricing of products with Microsoft providing its customers with relatively cheaper gadgets compared to Apple. On average, a computer with a Microsoft operating systems retails for around $700-$800 while on the other hand, Apple computers with an iOS operating system ranges in the regions of $1,200-$2,000 for a gadget with the same size (Hitt et al., 2016).

Similarly, the rivalry of offering substitute products can give Apple unwanted competition in this diverse market where consumers can opt to get cheaper substitute products which might be sharing similar features to those of an Apple product. For instance, one would opt to buy a touch screen phone similar to the iPhone at a Wal-Mart outlet for as little as $100 and the same can be said for a similar product like Apple’s iPad which can be substituted by getting a tablet with the list going on and on (Hoofnagle, 2016). To address these forces, Apple in the past have engaged their competitors in continued court battles in order to recoup its lost revenues and damages they have continued to incur due to increased competition. Hoofnagle in his journal states a case in point where a California jury awarded Apple with $119 million out of a $2.2 billion lawsuit against Samsung. In another separate ruling, Samsung was ordered to pay $1 billion in 2012.” (Hoofnagle, 2016).However, in its attempts to reverse these rulings, Samsung has continued to relentlessly appeal for some of these rulings.

With the same two (2) forces in mind, predict what the company might do to improve its ability to address these forces in the near future.

Some of the predictions of what Apple might be forced to do in the future in order to improve its ability to address these forces named above is simply to lower the prices of some of its expensive products in the market. Apple is able to produce better products and services while lowering the prices of these products in order to limit rivalry effect even if it means making losses for the short term. In relation to its challenge of substitute products, Apple can form partnership with other smaller firms to create substitute products before its major competitors have the chance of coming up with these substitutes (Lerner & Tirole, 2015). The other approach would be for the firm to come up with cheaper innovative products from the start, a move that can force their competitors to run out of business if they sell their substitute products at cheaper prices. In short, there are a number of measures Apple can implement to deal with rivalry and substitute products.

Identify what you consider to be the greatest external threat to this corporation. Discuss how the corporation should address this threat. Justify your explanation.

The greatest external threat to Apple would be in the unlikely event that all its competitor merging or acquiring other smaller firms. In the event that its competitors make such a move, Apple can counter it through legally blocking such companies from merging with others. If this move proves futile, and this can be because of so many legal factors including whether it is really applicable, Apple can seek alternative routes to counter such moves by its competitors. For instance, Apple Inc. can decide to offset or interrupt certain acquisitions by placing higher bids than their competitors (Federal Trade Commission, 2016). By doing this, Apple can come out with better deals and working terms deemed beneficial to its operations. Such terms can include retention of shares of ownership for original founders of such acquired firms.

Identify what you consider to be the greatest opportunity presented to the corporation, and discuss how the corporation should take advantage of this opportunity. Justify your explanation

Assessing the firm’s opportunities, Apple’s greatest opportunity lies within the cell phone production. Not only does everyone need a cell phone to communicate, it is also one of the fastest growing industries in Africa, Middle East, and Asia apart from other readily available markets like America and Europe. And being a world leader in the manufacturing of cell phones which include smart phones and pads, Apple should continue pursuing this line of product innovation in order to make huge gains from their most proven and tested area of profession which is the production of mobile phones and gadgets. s

References

Federal Trade Commission, (2016). Guide to Antitrust laws/The Antitrust Laws. Washington, D.C. Retrieved from https://www.ftc.gov/tips-advice/competition-guidance/guide-antitrust-laws/antitrust-laws

Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2016). Strategic management: Concepts and cases: Competitiveness and globalization. Cengage Learning.

Hoofnagle, C. J. (2016). Federal Trade Commission privacy law and policy. Cambridge University Press.

Lerner, J., & Tirole, J. (2015). Standard-essential patents. Journal of Political Economy, 123(3), 547-586.

Assignment

Redo.doc

Week 3 Assignment 1

Clarice Torrence

Strayer University

BUS499 Business Administration Capstone

Dr. Keller

Dr. Gardner

July 23, 2019

Week 3 Assignment 1

This assignment examines Apple Corporations and how internal and external factors directly impact the organization since its establishment by Steve Jobs, Steve Wozniak, and Ronald Wayne back in 1976. The assignment also strives to address the issue of how Apple uses the resource-based model and the industrial-organization model and how these models can be used by the company to improve its annual returns. The paper also determines the mission and vision of the company and how they contribute to the success of the firm. Finally, the stakeholder’s section examines how stakeholders of the company have contributed to the success of Apple Inc. with the recommendations made helping the organization in increasing its annual returns while reducing the costs it incurs in production.

Globalization

Globalization is the interaction and the subsequent integration both of firms, people, and governments worldwide with the need of interaction driven by international investment and trade, aided by information technology. Globalization has always had a significant influence on the way ideas are not only conceived but also on how they are created and delivered in the form of new technology ending up impacting operational models of most multinationals (Thompson, 2017). Apple Corporation is one such multinational company that has increased its market niche to international levels, even with the fact that the company started as a California based organization in the US. Being one of the Fortune 500 organizations that have capitalized inventively on globalization alongside keen product considering, Apple today derives almost up to 60% of its total revenues from markets outside America (Noe et al., 2017).

Using the tools and knowledge of globalization has helped the company increase its revenue returns in nations such as Asia which would not have been possible without the embracing of globalization by the management at Apple Corporation.

Secondly, Apple’s benefitting from globalization can be seen in terms of the company’s increased production at low costs as has been experienced in recent times. Not only has the company been able to discover countries and continents such as China and the Middle-East where they source for readily available resources and in effect helps it to lower the costs of production. By decreasing the costs of production, Apple has been able to significantly increase its production and sell their products at relatively lower prices, increasing its market niche in the process in the international markets. In addition to that, Apple’s effective supply chain management that has enabled it to reach out to more suppliers and to make its production processes more reliable can be attributed to it embracing globalization (Noe et al., 2017). With this type of supply chain management, Apple has been able to wade into markets like Africa, markets that were previously ruled by its competitors like Microsoft and Android.

Technology

Apple has always been known for being the leader in smart thinking, and this can be partly attributed to how the company has embraced and incorporated technology in the running of its entire systems from production to its elaborate supply chain. Thus, technology continues to play an essential role in the company’s operations, ensuring that the firm excels at all times. By technology, we mean the collection of skills, techniques, processes, and methods to produce goods and services (Wu et al., 2015). One of the ways the company has benefitted from the use of technology in their production processes is in the lowering of production cost. Advancement in technology has meant that the firm has significantly reduced the number of employees, replacing them with machines that have been able to do better work and for an extended period. Technology, as a tool, has also played an essential role in ensuring that Apple comes up with high-end quality products. Not only have these high-quality products attracted a broad base of loyal customers across the globe; it has also ensured that the company reaps big in terms of revenue growth. Use of advanced technological know-how has seen the annual revenue of Apple grow by almost 400% in Indian markets alone, according to Apple India (Wu et al., 2015). Because of technology and the advancement of it, Apple has been able to stand out from the other traditional mobile phone manufacturers through features in their range of iPhone devices. For example, create a phone with no menu button or main button or even a keyboard as was always done by other phone manufacturer players e.g. BlackBerry, Samsung, and Nokia. Additionally, technology has also helped the firm increase the number of products it can produce meeting customers high demands for its products globally. Thus, technology and globalization have been credited for the fast growth Apple Corporation has enjoyed in the software and hardware industry.

Industrial Organization Model

Industrial Organization model refers to an economic model majorly put in place by big firms to secure their perceived market niche in highly segmented markets. Different stages of the industrial organization model can be used by firms to achieve specific goals like reducing competition through policy-making, strategic studies of the behavior of firms, and coming up with anti-trust policies to keep external threats in check (Wu et al., 2015). Apple can also take advantage of the industrial organization model to not only reduce levels of competition from its competitors but also increase their revenues above the annual average income of its industry. One of the strategies Apple can use to keep in check competition is by mounting barriers to entry and significantly reducing the chances of other firms joining the industry. The other approach could be to lower the prices of all Apple products to wade off competition. For instance, in 2018, Apple dropped the prices of iPhone below the average prices in the industry increasing the sales of iPhone and subsequently experienced increased revenues at the end of that fiscal year (Thompson, 2017). The industrial-organizational model has proved a success for many companies as it has allowed firms to predict trends in the markets and effectively react to those changes in trends. Apple, like any other organization, has been able to anticipate future customer needs by developing new products such as the new iMacs, iPad mini, iPod, Airpod that have all met customers’ expectations (Wu et al., 2015).

Resource-Based Model

The second strategy is the resource-based model that Apple can apply to increase its revenues above its projected annual average earnings. A resource-based model refers to a model that sees a company’s collection of internal resources and capabilities prove superior to its performance. By this, it means that the resources that a company or an organization has can enable it to gain and sustain a competitive advantage over its competitors. The first benefit of a resource-based model is that it can help a firm to maximize the use of locally available resources (Noe et al., 2017). Just like in the case of Apple with moving its production facilities to China and the Middle-East, they have been able to effectively use the knowledge on resource-based models to increase production at relatively lower costs. This has been due to the availability of these resources needed to come up with their products being readily available in countries like Taiwan, China, Korea, Taiwan, and Singapore. Using locally available resources helps reduce the costs incurred on additional expenses like transportation when raw materials need to be imported from another country. The resource-based model also encourages the use of internal resources of the firm by managers instead of outsourcing for the same. Apple can additionally benefit from this type of model by helping it decide where to locate its operations in areas of abundant resources to increase its production capacity but at relatively lower costs which then helps the firm to generate more revenue (Noe et al., 2017).

Vision

Apple’s vision is always to make great products which will then translate into meeting the needs of all its customers. This vision was set during the reigns of its first CEO, the late Steve Jobs and which has up to date has kept the company much stronger year after year. To fulfill Job’s vision for the company, the current CEO Tim Cook has encouraged the use of technology is not only producing excellent products for its customers but also putting in place processes to ensure that customers get these products in time and good condition, by developing an efficient supply chain management for the company. Apple’s products are very simple to use and what makes their products even more amazing is that in all that simplicity, quality has not been compromised as their products are of high quality with very high levels of technology incorporation. The firm has achieved to produce excellent products that are above the average industrial standards available in the market today (Noe et al., 2017).

Mission

The mission statement of Apple is “Bringing the best products to the customers so that they can have the pleasure of using quality products.” And true to its mission statement, the firm has been able to enjoy success throughout their customer base by delivering just that, quality products. Production of high-quality products has seen the company enjoy successes around the globe with high-quality products that satisfy the needs of all its customers helping it retain its old customers while attracting new ones (Noe et al., 2017). This attraction and retention of customers have seen the company’s revenue experienced a massive boost as the innovative software and hardware of the firm acting as an attraction to more clients who need the latest mobile phones and computers.

Stakeholders

Since the start of 2013, Apple, as a company has been involved heavily in trying to address all the issues raised by its stakeholders. This journey started when the company became the first technology company to join the Fair Labor Association after a public outcry over allegations of widespread working environment conditions at one of China’s largest private employer, Foxconn (Thompson, 2017).

Apple’s stakeholders comprise of its customers, suppliers, employees, and lastly the shareholders. Having one of the largest numbers of loyal customers globally that contributes to almost 90% of the company’s total revenues; Apple is perhaps the only company that heavily relies on its customer base to efficiently run thus its customer-oriented approach business model. Apple also has more than 130,000 employees who ensure that the organization’s goals and objectives are met at all times (Thompson, 2017). Given different duties in different stores ranging from sales to marketing, the employees play a vital role in the success of the company and are treated as part and parcel of the organization thus are involved in its day to day running. With policies that protect workers exploitation, the company worked hard to ensure workers are not overworked and that they are exposed to better working conditions by prioritizing their safety.

The other categories of stakeholders are investors. Investors are the significant financiers of Apple Corporation. Investors’ equity amounted to 107.147 billion US dollars by the end of 2018 (Thompson, 2017). Some of these investors contribute generously to the leadership of the organization, ensuring that the firm remains profitable always. Investors like Arthur Levisohn, chairman, Tim Cook, CEO and Jeffrey Williamson, chief operating officer are also leaders to the firm. The last stakeholders are the suppliers who ensure that the firm gets the raw materials at the right time and this helps the firm to always continue with its production processes and not to experience any down breaks in the process of production or its supply chain. All the stakeholders have essential roles to play to ensure that the firm is successful (Thompson, 2017).

References

Noe, R. A., Hollenbeck, J. R., Gerhart, B., & Wright, P. M. (2017). Human resource management: Gaining a competitive advantage. New York, NY: McGraw-Hill Education.

Thompson, A. (2017). Apple Inc. Stakeholders: A CSR Analysis. Retrieved from http://panmore.com/apple-inc-stakeholders-csr-analysis

Wu, S. P. J., Straub, D. W., & Liang, T. P. (2015). How information technology governance mechanisms and strategic alignment influence organizational performance: Insights from a matched survey of business and IT managers. Mis Quarterly, 39(2), 497-518.

Assignment Week

6.doc