BUS 499_Assignment 4

Week 6 Assignment 2

Phabian Smith

Strayer University

BUS 499: Business Administration Capstone

Dr. Keller

Dr. Gardner

August 7, 2019

Week 6 Assignment 2

This paper focuses on the industry in which Apple operates. It pays attention to both the external as well as the internal environment of the company. The paper goes ahead to narrow down to various factors in both environments that have an impact on the operation of the company. Among the items focused on by the paper are the strengths, weaknesses, opportunities and threats of Apple. It also talks about how the company uses different tactics and strategies to capitalize on its strengths and to minimize the impact of its weaknesses. Businesses need to learn how to survive in the industry as well as their internal environment.

General Environment

The six segments of the general environment are demographic, sociocultural, political/ legal, technological, economic and global (Craig & Campbell, 2012). All these segments affect businesses in different ways. In the case of Apple, the true that rank highest in terms of influencing the corporation are the technological segment and the economic segment.

i. Technological segment

Apple operates in the technology industry and this makes the technological segment one of the most influential segments of the general environment. Technology changes quickly and frequently and companies in the industry must keep up with the changes to remain relevant. This has a direct impact on the operation of Apple because the company must always keep up with the technological trends in the industry.

ii. Economic segment

The economic segment is also highly ranked in terms of influencing Apple's operations because the company must pay attention to the financial sector of all its processes. This segment affects the general environment and the industry because businesses must always be keen on maximizing profits and minimizing expenses (Craig & Campbell, 2012). Their operations are guided by the economic conditions of the industry.

Five Forces of Competition

Businesses operate in a competitive environment that is affected by various forces. The way a company such as Apple addresses the forces has a direct impact on its competitiveness in the industry. The five forces of competition are; competitive rivalry, bargaining power of suppliers, bargaining power of customers, threat of new entrants, threat of substitute products. These forces of competition affect Apple significantly, but the following are the two most significant ones (Fernando, 2011).

i. Competitive Rivalry

Competitive rivalry refers to the competition that exists between companies that are already in the industry. In the case of Apple, one of the greatest competitors is Samsung. The two companies operate in the same industry and the also target the same customers. They also offer identical products and services such as smartphones and personal computers. Apple deals with this force by focusing on customer satisfaction to create strong relationships with these customers to attract and retain more of them. The strategy has enabled the company to remain competitive if the industry.

ii. Threat of Substitutes

Substitute products and services are also significant in terms of affecting Apple’s competition because they give customers alternative options that they can select from (Fernando, 2011). The substitutes are usually low-quality and unreliable and Apple juice with this course by focusing on the high quality of its products and services. This makes them incomparable and almost impossible for customers to consider the substitutes.

Evaluation

Apple has effectively dealt with the force of competitive rivalry as well as the threat of substitute products and services. With respect to competitive rivalry, Apple has understood that the best way to complete is to attract and retain customers. The company focused on customer relationship management and this inability to attract and retain many customers. It is unlikely for Apple to lose customers to its competitors. This indicates that the concept of competitive rivalry has been effectively addressed. As far as the threat of substitute products is concerned, Apple address to this by maintaining the quality of its products and services so that they are superior in the market (Fernando, 2011). Given the fact that most consumers in the market are more concerned about the quality then the price of a product, Apple has managed to address this force by ensuring that substitute products do not really threaten the company's competitiveness.

Future Improvements

In future, should improve its ability to address the force of competitive rivalry and the threat of substitutes by focusing on the quality of its products and services. This will enable the company to maintain competitiveness amid stiff competition and substitutes.

External Threats and Opportunities

One of the external threats faced by Apple is economic downturn (Apple, 2019). The economy is generally worsening making it difficult for businesses to operate. This has a negative impact on profitability due to the high costs. The company is also threatened by product piracy. This threatens its economic power because the products are being used if the company is not paying for the same. One of the opportunities that Apple has used to diversify its products and services. This will enable it to meet the needs of more customers and satisfy them. The company also has the opportunity of entering new markets and increasing its reach.

Threats and Opportunities Strategies

Apple should deal with the threat of economic downturn by engaging in processes that minimize costs for the interest of maximizing profits and boosting the company's economic condition. The opportunity of diversifying its products and services should be handled by studying the market to understand what is really required and engaging in that product area. This would significantly boost the company's market share.

Strengths and Weaknesses

The greatest strength of Apple is the high quality of its products. The company's products stand out in the market due to the incomparable quality. The company also enjoys a strong brand equity. Anything associated with Apple is believed to be the best. The name alone is competitive. One of the weaknesses suffered by Apple is the small product range (Apple, 2019). This greatly limits the company's market penetration. Apple also faces the weakness of high prices for its products in relation to competitors. This puts the products out of reach of many potential customers.

Strategy

Apple needs to maintain or even increase the quality of its products and services to take full advantage of its strengths. This strategy will also help the company in strengthening its brand equity (Apple, 2019). Apple can address its weaknesses by diversifying its product Range and reducing the prices to make them affordable. Such a strategy enables a company to offer many products and services at a price that is affordable to many. It increases market penetration as well as boosting the customer share.

Resources, capabilities and core competencies

Apple has relevant human as well as material resources that enable it to meet its objectives. It has a competitive workforce made up of creative and highly motivated professionals that are specialized in different fields. The company also has sufficient financial resources as well as tools and equipment that are necessary for its processes and operations. Apple is capable of in investing in any project it pleases due to its financial muscle. In 2018, the company realized more than $100 billion in gross profit. This financial condition indicates that it can engage in any activity for the interest of boosting its competitiveness in the market. One of Apple's core competencies is strong customer service (Apple, 2019). The company understands it was established to serve customers and it does whatever it takes to make them satisfied. Focusing on customer satisfaction is all of them best strategies a business can use to stay relevant in the market.

Sources

Apple Inc. (2019). Company Profile https://www.reuters.com/finance/stocks/company-profile/AAPL.O

Craig, T. & Campbell, D. (2012). Organizations and the Business Environment. London: Routledge.

Fernando, A. (2011). Business Environment. Delhi: Pearson.