Overview of Apple Inc
The report helps in the examination of the internal and external environmental study of the Apple Inc Company. Furthermore, the situation of the industry in which Apple Inc is existing along with the good and ugly part in the company has to be analysed effectively. The situation of the company is required to be analysed by performing the Porter’s Five Forces Analysis which will be providing a brief overview on the analysis whether the company will be staying relevant in the current year ore not.
Apple Inc is one of the American international technology Company is headquartered in Cupertino which is based in California (Apple., 2018). The organization was founded in the year 1976 and founders of the company are inclusive of Steve Jobs, Steve Wozniak and Ronald Wayne. The company is the world’s largest information technology organization in terms of the revenue. The revenue which has been earned by the organization is US$229.234 billion till the year 2017 and the number of employees working in the organization is 123000.
Strengths
- Innovative products are key strengths of Apple Inc as company has invented the different kinds of hit products such as iPad and iPod which will be helpful in meeting the different individual desires(Rothaermel, 2015)
- The distribution network of Appleis the other strength of the company in which Apple has more than 470 of the own stores with their presence in more than 17 countries. There are different online channels along with the premium retail stores wherein Apple tries to sell the different products through these channels and gain more productivity (Hill, Jones& Schilling, 2014).
Weaknesses
- Incompatibilityis the first weakness which is being faced by Apple wherein this can be noticed that many products are incompatible with the different software products along with accessories of the third party (Bettis et al., 2015).
- Dependency of the few products is the other aspect which can be seen that Apple has only seven to eight products in the portfolio in comparison to the other products which are the main competitors of Apple are Microsoft and Google. Therefore, the dependence of Apple on the different products is very high in nature and this is essential in nature in handling the dependency of Apple (Robson, 2015).
Opportunities
- The technological advancementsare one of the major opportunities of Apple wherein the company can come up with the more advanced versions of iPhone and iPad along with Iwatches in the coming years (Ginter, Duncan & Swayne, 2018).
- The growing marketis one of the other opportunities for Apple Inc and this will help Apple in increasing the consumption of the premium brands such as Apple. The Apple Cars is the other aspect which will be launching in the year 2020 and this can help in improving the overall efficiency of the business (Morschett,Schramm-Klein &Zentes, 2015)
Threats
- Laptop Competition is the threatwhich is being faced by Apple Inc Company and this affects the overall profitability of Apple Company. MacBook is best and there are different other competitors for example Dell along with Sony and Lenovo. The rivalry is ever increasing in nature and Apple is facing stiff competition in the market as well (Morden, 2016).
- The market penetration in the smartphones is the major threat which is being faced by Apple from the other smartphone companies. The android is eating the market share in a huge and rapid manner and more than 47.5% of the market share, on the other hand more than 42% of the market share is being adopted by Apple and Apple is required to be ready for the smartphone competition (Trigeorgis&Reuer, 2017).
With the overall analysis of gadgets industry, this can be analysed that external environment had created both opportunities and threats for the different organizations. The tablets and the different other gadgets have become an effective alternative to laptops and the global growth rate has increased to large extent. The growth rate has become steady in the global gadgets industry wherein the sales have increased by more than 5% in 2016 to more than $87.4 billion (Christopher, 2016). Furthermore, in the present scenario the different consumers are interested more towards the different sleek designs and more user-friendly model models which is essential in nature to attract the different customers.
The different key players of Apple in the entire competitive market are inclusive of Samsung and Microsoft, Huawei and Google. The below diagram helps in analysing the key players in the market and who are the major competitors of Apple as well (Ferlie et al., 2016).
Figure 1: Key Rivals of Apple Inc
(Source: Hill, 2017)
From the above diagram, this can be analysed that the different android phones along with the other mobile companies tried to gain a huge market share in the organization in an efficient manner. Apple has tried to gain a huge market share; however, the company has not been able to compete with the Android market and this has affected the sales of the company in a negative manner as well (Steinbach et al., 2017). Furthermore, Dell and HP are the major competitors and it appears that the company has good perceive of the market and implement of the market strategy and this has affected the brand image of Apple Inc Company.
Good- Apple Inc expects the growth in the revenue and leadership of Steve Jobs
Firstly, the guidance calls for the revenue in the range of more than $76 billion to the $78 billion and this has helped in gaining their solid achievement and this has helped Apple Inc in managing the growth and in the last moment, Apple Inc tried to gain the sales of more than $75.9 billion and the investors of Apple were grateful for such growth as well (Hill, 2017). Furthermore,the leadership style of Steve Jobs was not so formal and this has helped in the overall growth of the firm in a positive manner.
Analysis of the Gadgets Industry
Bad- The gross margin should be better and expectations from employees
The bad aspect in Apple Inc is that the higher officials of Apple are experiencing more level of gross margin which will be more 38% to 38.5%. Moreover, this can be seen that the company officials expect a lot from the employees and there is huge work pressure which is being created on the different employees in a negative manner (Hill, 2017).
Ugly- The units of iPhone can potentially decline and unethical behaviour
In Apple Inc Company, this can be seen that there is decline in the units of iPhone in the recent times wherein this can be seen that the behaviour of the officials of Apple is unethical in nature and this has affected the morale of the different employees in an ineffective manner. This has been seen that there is no such motivation which is being provided to the employees and this has decreased the overall productivity of the organization in a negative manner as well. Furthermore, the unit of the iPhone will fall short as the market tends to focus mainly on the unit sales of iPhone and this could be ugly if this will fall short and this will affect the overall sales of the organization as well (Bettis et al., 2015).
Apple has tried in focusing mainly on different kinds of different activities which is inclusive of the different primary and secondary activities of Apple which will be helpful in managing the effectiveness.
Figure 2: Value Chain Analysis of Apple Inc
(Source: Ethiraj, Gambardella &Helfat, 2016)
Primary Activities
Inbound Logistics: Apple has large supply chain while obtaining the different raw materials and most of the suppliers of Apple is located at Asia which is China and Japan. The major raw materials include 3M and Foxconn and Apple tries enjoying high power of bargaining with respect to the suppliers.
Operations: Apple manufacturing is basically based in various locations and nations and Apple has engaged Indian government in talks and labour costs have been lower in Asian Nations. Furthermore, the labour costs have been lowered in Asian nations and they have tried to reduce the manufacturing costs for Apple as well ((Ethiraj, Gambardella&Helfat, 2016).
Outbound Logistics: Apple has tried to manage large distribution network which is consists of bot direct and indirect channels. There are different retail stores along with other online stores wherein the company has tried in to manage a large channel for distribution.
Products and Services: Apple tries to provide complete after sales service and sustain to the different clients. There are different products from Apple within 90 days complementary support and one-year warranty (Christopher, 2016).
Marketing and Sales: Apple is one of the main famous brands which is known for quality, design and technological kind of innovations. There are different kinds of websites which help Apple in showcasing their products and they can check their order online as well.
Support Activities
Research and Development: The Company spends a great deal on the different kinds of research and development wherein the designs of the products are unique in nature. The company has spent more than $10 billion on R&D and this will be helpful in increasing their focus on the different development of products (Christopher, 2016).
Human Resource Management: Apple tries to focus mainly on the different kinds of hiring and paying well to the different employees.
Infrastructure of Firm: Apple’s infrastructure has played a vital role in success and the different financial resources and culture plays vital role in betterment of the firms.
Procurement: Apple has tried in managing excellent kind of relationship with the different suppliers and the suppliers try to provide the workers with safe kind of conditions of working.
Apple has a particular kind of status and there is always a struggle in Apple Company in order to launch the new products. There are different recommendations which can be provided to Apple in order to become more innovative and include the ethical value and culture in their organization which will be beneficial for the overall success of the firm which are as follows:
- To be the king of high-tech of Wall-Street by innovating their new technology and introduction of new version such as 64 or more gigs memory which will be smarter and powerful camera lens technology in order to increase the share in the market effectively
- Furthermore, the market share will be increased till 2020 after the launch of Apple car and this will help in gaining more competitive advantage by introducing the innovative culture at Apple stores all over the world which will be providing huge opportunity to build band reputation and loyalty.
- There should be introduction of proper ethical culture in the organization which will be beneficial for the overall success of the firm in an effective manner. The ethics should be taken into consideration the health and safety of the employees working in the organization which will be helpful in improving the overall organizational culture of the organization effectively
Conclusion
Therefore, this can be concluded that Apple Inc has different internal and external threats along with different kinds of opportunities which will be beneficial for the success for the firm. Furthermore, the bad and ugly are required to be analysed effectively and remove the different issues which will be beneficial for the growth of the firm. The value chain of Apple has assisted in managing the various primary along with secondary activities in an efficient manner.
References
Apple. (2018). Retrieved from https://www.apple.com/
Bettis, R. A., Gambardella, A., Helfat, C., & Mitchell, W. (2015). Qualitative empirical research in strategic management. Strategic Management Journal, 36(5), 637-639.
Christopher, M. (2016). Logistics & supply chain management. Pearson UK.
Ethiraj, S. K., Gambardella, A., &Helfat, C. E. (2016). Replication in strategic management. Strategic Management Journal, 37(11), 2191-2192.
Ferlie, E., Crilly, T., Jashapara, A., Trenholm, S., Peckham, A., & Currie, G. (2016). Strategic management in the healthcare sector: the debate about the resource-based view flourishes in response to recent commentaries. International journal of health policy and management, 5(2), 145.
Ginter, P. M., Duncan, W. J., & Swayne, L. E. (2018). The strategic management of health care organizations. John Wiley & Sons.
Hill, C. W., Jones, G. R., & Schilling, M. A. (2014). Strategic management: theory: an integrated approach. Cengage Learning.
Hill, T. (2017). Manufacturing strategy: the strategic management of the manufacturing function. Macmillan International Higher Education.
Höglund, L., Holmgren Caicedo, M., &Mårtensson, M. (2018). A balance of strategic management and entrepreneurship practices—The renewal journey of the Swedish Public Employment Service. Financial Accountability & Management.
Lasserre, P. (2017). Global strategic management. Macmillan International Higher Education.
Morden, T. (2016). Principles of strategic management. Routledge.
Morschett, D., Schramm-Klein, H., &Zentes, J. (2015). Strategic international management (pp. 978-3658078836). Springer.
Robson, W. (2015). Strategic management and information systems. Pearson Higher Ed.
Rothaermel, F. T. (2015). Strategic management. McGraw-Hill Education.
Steinbach, A. L., Holcomb, T. R., Holmes Jr, R. M., Devers, C. E., & Cannella Jr, A. A. (2017). Top management team incentive heterogeneity, strategic investment behavior, and performance: A contingency theory of incentive alignment. Strategic Management Journal, 38(8), 1701-1720.
Trigeorgis, L., &Reuer, J. J. (2017). Real options theory in strategic management. Strategic Management Journal, 38(1), 42-63.
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