Week 6 External and Internal Environments
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Strayer University
BUS499 Business Administration Capstone
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Introduction
The industry that has been selected for this given analysis happens to be information technology, in addition, the chosen firm is Apple, Inc. Basically, it is known to be a multinational corporation leading in the manufacturing as well as the selling of computers, consumer electronics, software plus online services. In addition, Apple is also the second largest firm within the IT industry courtesy of their revenue. In the year 2013, their brand was identified to be the most valuable brand globally. The main of this paper is analyzing internal as well as external environment of Apple, Inc. alongside generating recommendations that pertain to the future strategy of the firm.
General Environment
Basically, the overall environment in which the firm operates in tends to be shaped through various dimensions of the society. Normally, there happens to be seven major segments of the firm’s general environment. These include; economic, socio-cultural, demographic, physical, global, technological in addition to political/legal. It is very challenging for the general environment to get influenced by enterprises, nevertheless, it has an impact that is quite powerful on industries as well as the firms that operate within them. When it comes to the Apple firm, the general environment segment that is known for having the largest impact on its operations as well as strategy is the technological segment.
Naturally, this particular technological segment has quite an extensive impact on the Apple’s business in addition to its IT sphere. This is a segment pertaining to the activities in addition to institutions that are linked to technology, innovations, new discoveries as well as technological changes in general (Paam, et.al, 2019). Typically, the IT industry is one that emerged as a result of technological segment advancement. In addition, it continuously has a rapid expansion because of the creation of the technologies that are new. At the moment, fast technological growth plus replacement of the old technologies are jointly driving the growth of the Apple firm alongside intensifying competition within the industry. Advanced technologies of developing hardware and software, emergence of new technologies that are wireless and the growth of cloud services – all are changes that are utilized by Apple in developing as well as marketing their new products.
Five Forces of Competition
With the external environment, the second component to get analyzed happens to be the industry environment as well as competition within the industry. The environment may get evaluated utilizing the five forces of competition model. These particular forces include: suppliers bargaining power, threat of new entrants, rivalry amidst competing companies, buyers bargaining power and threat of substitute products. In relation to the information technology industry and the Apple firm, the most crucial force happens to be rivalry among the competing firms.
Apple was able to successfully overcome other competitors through use of innovations in addition to a brand management that was effective (Cheng, et.al, 2021).The firm decided to position it’s brands as products that are exceptional which helped to outperform competition regarding product design plus performance. In addition, the firm ended up introducing novel features which were not available in the competing products. Actually, the capacity of the Apple firm to have itself distinguished amidst competitors is among its major competencies.
Future Improvements
Competitive rivalry within the IT sphere is one that is greatly increasing as more hardware leaders begin to manufacture their laptops, tablets, players as well as smartphones among others. Apple is capable of addressing this particular competition force through further driving innovation as well as having their products differentiated (Lu, et.al, 2023). Apple is considered to be a high-quality brand offering technology that is cutting-edge at a premium price. As a result, it would be of great benefit to the company if it adds features that are new into their products, have new versions of their commodities introduced as well as have innovation fostered so as to retain the industry leadership.
Greatest External Threat
There tends to be different external threats that influence Apple, Inc. The key threat is rapid technological growth plus change, this means there is a possibility of the firm being set aside by a competitor known to invent a novel technology. In case strong competitors such as Samsung end up inventing technologies and have them marketed, the market position of Apple may get affected to a significant extent (Tien, 2019). In an attempt to retain market leadership, Apple firm is supposed to introduce new products as well as acquire or develop their new technologies. Due to this, Apple is supposed to pursue its own innovations, in addition, it is supposed to monitor the latest advancements then acquire technologies that are promising.
Greatest Opportunity
The most promising opportunity for Apple is basically the iTV launch. Though the company provides TV services, the general TV infrastructure is one known for lacking sophistication as well as alignment with the general Apple ecosystem (Tien, 2019).The TV audience is basically huge plus the launching of advanced interactive TV gadget that is compatible with different Apple devices will end up increasing the popularity and the revenue of the company.
Strengths
For purposes that are strategic, it is of great importance to take into account the manner in which Apple may take advantage of its major strengths as well as how it is able to tackle its most crucial weaknesses. First and foremost, the firm is able to combine various strengths like the top innovator status plus its self-reinforcing ecosystem into attracting additional clients and having them attached to the firm’s ecosystem (Hiremath & Gupta, 2022). Expanding the firm into different niches, like television plus smart gadgets enables the company to enjoy the attention of new clients. After purchasing the Apple gadgets, they get to enjoy the value associated with the ecosystem. Through this strategy, Apple is able to tackle its weaknesses like declining market share alongside the declining gross margin. Additionally, Apple may create new software products plus online services to improve consumer loyalty plus appreciation as well as integrate present clients further into their ecosystem.
Weaknesses
Apple is supposed to take into consideration tackling its high prices weakness. While its known that premium prices are basically a part of their brand image, it is also obvious that having these prices lowered might as well impact the brand value as well as the profits. However, these high prices may end up preventing the consumers from purchasing the Apple commodities (Hiremath & Gupta, 2022). It is recommendable that Apple gets to adjust its own marketing strategy so as to offer two methods of getting products at prices that are discounted. These include; loyalty programs for the clients already existing plus different drawings and contests for the clients who are new. Through this, Apple will continue fueling the interest to its devices then have the existing clients rewarded for their own loyalty. Adapting this strategy, will enable Apple to address its high prices weakness.
Sources
1. Cheng, L. C., Chen, K., Lee, M. C., & Li, K. M. (2021). User-Defined SWOT analysis–A change mining perspective on user-generated content. Information Processing & Management, 58(5), 102613. https://www.sciencedirect.com/science/article/pii/S0306457321001096
2. Hiremath, N., & Gupta, N. (2022). Marketing Strategies used by Apple to Increase Customer Base. International Journal of Innovative Science and Research Technology, 7(7). https://ijisrt.com/assets/upload/files/IJISRT22JUL940.pdf
3. Lu, W. M., Kweh, Q. L., Ting, I. W. K., & Ren, C. (2023). How does stakeholder engagement through environmental, social, and governance affect eco‐efficiency and profitability efficiency? Zooming into Apple Inc.’s counterparts. Business Strategy and the Environment, 32(1), 587-601. https://onlinelibrary.wiley.com/doi/abs/10.1002/bse.3162
4. Paam, P., Berretta, R., Heydar, M., & García-Flores, R. (2019). The impact of inventory management on economic and environmental sustainability in the apple industry. Computers and Electronics in Agriculture, 163, 104848. https://www.sciencedirect.com/science/article/pii/S0168169918315060
5. Tien, N. H. (2019). International distribution policy comparative analysis between samsung and apple. International journal of research in marketing management and sales, 2020(1), 2. https://www.researchgate.net/profile/Nguyen-Tien-32/publication/338719419_International_distribution_policy_comparative_analysis_between_samsung_and_apple/links/63b014d1c3c99660ebbad865/International-distribution-policy-comparative-analysis-between-samsung-and-apple.pdf
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