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Apple Inc. Analysis

Apple Inc. Analysis

Summary of the Company

Apple Inc. is a company that specializes in the manufacturing and sale of consumer electronics, computer software, and other online services. The company is headquartered in California, United States. The company has become a leader in the industry, competing with other companies such as Samsung. Some of the products produced by the company include the iPhones, Mac, Apple Watch, and Apple Tv. Apple Inc. has become the largest IT company in the world by revenue. There are five hundred retail stores around the world with over 120,000 employees.

External Environment

Several factors influence Apple Inc. in the external environment. The political stability and tax regimes in different countries of operation influence the company’s performance. The reforms in tax regimes in other countries, such as the United Kingdom in the 1980s, resulted in investment encouragement. However, Brexit has affected the market and Apple’s sales in the UK. The increase in UK corporate tax to 20% and the inclusion of other taxes that should be paid, such as environmental and value-added taxes, reduces the company’s profitability (Ren et al., 2022). High taxes result in increased prices for Apple products, reducing sales.

The economic environment has a significant influence on company performance. The factors such as inflation, fiscal policies, and the reduction in consumer spending power results influence revenues and profits. Covid-19 resulted in a decline in consumer spending and purchasing power for luxury products. It also increased inflation, reducing the company’s trend of growth in profitability over the years (Zhao & Zhang, 2022). Social factors such as changes in lifestyle, demographics, and perceptions positively favor company sales. The changes in consumer taste and demand for high-quality products have increased sales for the company. Technological factors influence the innovation of the company. Through research and development, the company develops new products that meet and satisfy customer needs. The legal aspects such as intellectual property, property rights, and the other regulations put in place affect company operations.

Current Strategies and Objectives

Apple Inc.’s strategies include focusing on designing and functionality of the products. The company has adapted to developing advanced features and capabilities to enhance competitive advantage (Tian et al., 2022). The innovations coming from the company have earned a more significant market share. The second strategy and objective are to improve customer experience. The customers are the pillars of success in the organization. Apple Inc. creates efficient marketing through videos demonstrating the use of the products to develop customer knowledge.

Company Position in the Next Five Years

The current strategy is efficient in enhancing company performance. However, these strategies will stagnate company performance in the next five years. The technological advancements and changes happening are resulting in massive disruptions in the market. Therefore, with problems in the industry, the company will be overcome by others.

Recommended Strategies for Apple Inc.

Apple Inc. has different opportunities for enhancing performance in the future. The company relies on using cheap labor in China to improve its performance. However, with increasing technology, the company will face challenges in enhancing its performance. Technology is increasingly coming up with new methods of improving production activities. Therefore, the company must evaluate its manufacturing approaches and operating strategies to develop new and sustainable practices. Using cheap labor increases the probability of dealing with conflicts with labor regulations. Therefore, new techniques would improve company performance in the future. Apple Inc. has a few products that are performing well in the industry. These include the iPhone and Apple Watch (Lu et al., 2020). These are products that have high opportunities in the market. Thus, the company must invest in the differentiation of its products through research and development. This should be coupled with regional market increases to further sales. The company should also engage in new product developments depending on technological changes.

Competitive strategies used by Competitors

Samsung company is the biggest competitor for Apple Inc. The company produces several products, such as smartphones, tablets, laptops, and televisions, which all enjoy a high market share. Samsung customers are confident about the products because they know company processes. Samsung comes with new products which compete against Apple. The company is also known for its fast customer service for any of its products (Roozitalab, 2022). Thus, Samsung has a more robust product portfolio. Secondly, the company uses effective pricing strategies to attract more customers. Samsung uses skimming pricing to ensure it gets a high value before the competitors launch similar products. The company also uses competitive pricing to ensure increased sales. Competitive pricing helps the company to beat the others in the industry.

Apple Inc. needs to enhance its competitiveness through efficient pricing in different markets. The company uses premium pricing in most market segments, reducing its competitiveness. Therefore, the company should adopt skimming to enter some markets and improve performance. Apple Inc. needs to design competitive pricing to ensure its products are competitive and attractive to different market segments. The new products need to be created per the customers’ needs. Therefore, it is possible with the competition and increases performance through innovative products.

References

Lu, W. M., Kweh, Q. L., Ting, I. W. K., & Ren, C. (2020). 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. https://onlinelibrary.wiley.com/doi/abs/10.1002/bse.3162

Ren, C., Ting, I. W. K., Lu, W. M., & Kweh, Q. L. (2022). Nonlinear effects of ESG on energy‐adjusted firm efficiency: Evidence from the stakeholder engagement of apple incorporated.  Corporate Social Responsibility and Environmental Management. https://onlinelibrary.wiley.com/doi/abs/10.1002/csr.2266

Roozitalab, A. (2022). Employing strategic management to study the effect of brand awareness on customer's loyalty: Exploring the mediation effect of perceived brand quality and brand communication: A study of Samsung electronics company in Tehran branch.  SMART Journal of Business Management Studies,  18(1), 38-46. https://www.indianjournals.com/ijor.aspx?target=ijor:sjbms&volume=18&issue=1&article=006

Tian, X., Yang, L., Huang, Y., & Fang, Y. (2022, January). Research on Supply Chain Shortage of Electronic Technology Companies under the Pandemic Situation: A Case Study of Apple Inc. and Xiaomi Inc. In  2022 13th International Conference on E-Education, E-Business, E-Management, and E-Learning (IC4E) (pp. 605–610). https://dl.acm.org/doi/abs/10.1145/3514262.3514330

Zhao, Y., & Zhang, Z. (2022, April). Strategy Analysis of the COVID-19’s Influence on Apple. In  2022 7th International Conference on Social Sciences and Economic Development (ICSSED 2022) (pp. 9–13). Atlantis Press. https://www.atlantis-press.com/proceedings/icssed-22/125973703