Business-Level and Corporate-Level Strategies

Running head: EXTERNAL AND INTERNAL ENVIRONMENT

INTERNAL AND EXTERNAL ENVIRONMENT 8

Internal and External environment

Heather Daniels

Strayer University

BUS499 Business Administration Capstone

Dr. Brian C. Grizzell

February 14, 2021

Apple Inc is among the leading multinational corporations in the United States. The company is among the five largest companies in the information technology industry in the United States. Like in many other companies in the United States, there are various segments of the general environment that impacts Apple Inc.’s operations.

The political segment comprises one of the segments of the general environment that has a significant impact on the operations of Apple Inc. the political environment encompasses the intervention of politics and the role of government in shaping businesses. Government executes various operations such as tax policies and changes in the trade tariffs and restrictions (Gürel & Tat, 2017). The stability of the government has significant impacts on the operations of Apple Inc. the increase in the federal corporate income taxes tend to significantly raise the levels of unemployment and the capacity of multinational corporations to employ more people.

Statistics indicate that the rate of unemployment when the federal corporate income taxes are highest. When the federal government raises taxes, multinational corporation's operations are deterred. The stability of the United States federal and state governments has played a significant role in the success of Apple Inc. multinational corporations in countries with unstable governments are less likely to achieve their mission and vision. Multinational corporations also carry out business across the borders in the contemporary world dominated by globalization (Kuznetsova et al., 2017). Multinational corporations favor carrying out operations in countries with high levels of government stability compared to those countries with unstable governments.

Politics has a significant impact on immigration. Apple Inc embraces diversity and a multicultural workforce. The immigration policies influence the availability of diverse workforce, skills, and competencies. Immigration policies determine the availability of legal and illegal immigrants in the United States. The tightening of immigration policies reduces the supply of multicultural and diverse workforce in many multinational corporations (Kuznetsova et al., 2017). Apple Inc and other multinational corporations employ legal immigrants. The government plays a significant role in availing legal immigrants in the United States. To increase multicultural diversity, immigrants need to possess sufficient immigration documents to access employment.

The second segment of the general environment is the economic segment. The economic segment encompasses the environmental condition in which Apple Inc operates. The essential economic segment factors in this segment include the rate of interest, rate of inflation, rate of unemployment, the gross domestic product, and general decline or growth of the economy. The economic crisis experienced in the year 2002 had detrimental impacts on Apple Inc and many other multinational corporations in the United States (Gürel & Tat, 2017). The declining levels of unemployment discouraged many consumers from purchasing Apple products and other nonessential goods such as television and automobiles. The trade markets were tightened by the bank failures during the economic crisis.

An increase in the interest rates implies that Apple Inc existing and potential customers have limited income. The impact of changes in interest rates varies from one multinational corporation to another. A rise in the rate of interest has a tremendous negative impact on multinational companies selling luxury goods such as Apple Inc. consumers tend to cut back their consumption of their nonessential as their disposable income declines (Pearson et al., 2018). High-interest rates imply that financial institutions reduce their lending capacity as the banks mitigate the risk of financial losses.

The general decline or growth in the rate of the economy has a significant impact on the operations of multinational corporations. The growth of the economy facilitates the operations of Apple Inc by increasing access to essential resources and the market for Apple Inc products. As the rate of the economy grows, consumers have the financial capacity to purchase luxury products produced by Apple Inc.

There are five forces of competition that operate in Apple Inc, as outlined by Porter. The five forces play a critical role in analyzing competition in the technology industry. Porters 5 forces include the threat of new entrants, supplier's bargaining power, bargaining power of buyers, rivalry in the industry, and the threat of substitute products. One of the major forces is the threat of new entrants. In the modern world, the recent advancements in technology have resulted in increased innovation and creativity in the technology industry. New entrants tend to introduce new capacity with an increased desire to expand their market share. The threat of new entrants is determined by the barriers to entry that exist in the industry (Kuznetsova et al., 2017). The threat is minimal where the barriers to entry are higher. Apple Inc solves this threat by utilizing economies of scale. Apple is able to produce products on a large scale, which save significant production costs. The costs saved in the production are utilized to ensure that the prices of Apple products remain significantly low and affordable. The other approach that Apple Inc utilizes to curb this force is high consumer loyalty. Apple Inc has engaged in the production of high-quality products that have gained increased customer loyalty. Apple Inc can sustain this through engaging in research and innovation to determine the changes in consumer needs and preferences.

The second force is the bargaining power of suppliers. The supplier power in Apple Inc changes regularly. Suppliers have the ability to significantly raise the prices to reduce the quality of the goods and services they deliver. The reduction in the quality of supplied materials and a rise in the price of supplies influence profitability at Apple Inc. some of the factors that influence supplier power is the availability of substitute suppliers and supplier concentration. Apple Inc benefits from a high number of suppliers.

Another critical aspect is the buyer's bargaining power. This market force evaluates the ability of customers to put Apple Inc under pressure to keep the price of their products low. Consumers are highly sensitive to price changes. The rise in the price of apple products implies that some price sensitive consumers will switch to alternative companies (Pearson et al., 2018). Apple Inc solves this force by increasing customer experience and offering high-quality products that meet the needs and preferences of the consumers. Another strategy deployed by Apple Inc is the implementation of customer loyalty programs and product differentiation.

In the near future, Apple Inc needs to invest more in research and development. Research and development are critical in the modern world, where globalization has made the world a global village. The needs and the preferences of the consumers are changing rapidly. The research will enable the company to evaluate the supplier base and ways of building customer loyalty.

Apple Inc faces several external threats, just like many other multinational corporations in the world. One of the major external threats is aggressive competition. Other multinational corporations such as Amazon, Samsung, and Microsoft pose huge competition to Apple Inc. the other external threats is the increased costs of labor. There has been a rise in the costs of labor in the United States and in the world. The increasing labor costs reduce the revenue and profits at Apple Inc. the increasing costs of labor results in a high rate of employee turnover as employees move on to high-paying corporations. On the other hand, Apple Inc has several business opportunities. One of the major opportunities is consistency in customer growth (Wu, 2020). Apple has had a large customer base in many parts of the world and the United States. The corporation has a diversity of qualified personnel. The company personnel possesses skills and competencies in the management of apple products. Apple Inc has an expansive distribution network. Customers in various parts of the world have access to apple products through the well-established network of product distributors. Apple Inc can utilize the greatest opportunity by investing in further expansion of the distribution network.

Apple Inc faces various strengths as well as weaknesses. One of the most significant strengths is the highly valuable brand. Apple Inc's brands are popular in the United States and in the world. The brand value is approximately $322 billion (Gürel & Tat, 2017). The other greatest strength is top technology. Apple was among the leading corporations to introduce innovative products such as iPads and iPhones. On the other hand, Apple Inc is not without weaknesses. The price of Apple products is one of the weaknesses at Apple Inc. Apple products are considered luxuries due to premium prices. The prices associated with apple products are ideal for middle income to high-income people. People in the low-income bracket in the economy are less likely to afford apple products. The other weakness has been the limitation of promotions and advertisements. Many multinational corporations emphasize advertisement and promotions to increase brand awareness. Apple Inc, however, tends to use the established customer loyalty and retail stores.

Apple Inc can deploy several tactics and strategies to maximize on strengths while minimizing the weaknesses. Apple should continue to increase the brand value and quality. To remain competitive, Apple Inc should maintain a high brand value. Constant investment in technology is another tactic that apple can deploy to maintain innovation and creativity in product design.

The expansion of Sino-U.S. resulted in the expansion of the cost implication and production capacity in apple. The strategic management insight outline innovation in mobile technology, strong marketing teams, and excellent customer service as the major core competencies in apple inc. The other core competency at apple inc is the strong reputation of its brands such as Apple TV, iPad, iPhone, and other hardware and software.

From the discussion above, Apple Inc is affected by both internal and external environment just like other corporations in the world. Some of the external challenges facing apple inc result from the operations of the multinational corporation across the border. However, Apple has deployed several strategies to maximize the available opportunities as well as minimizing on the corporation's weaknesses. Apple Inc has well-structured core competencies that enable the corporation to achieve its mission and vision. The satisfaction of consumers through the provision of quality goods is a major point of focus at Apple Inc.

References

Gürel, E., & Tat, M. (2017). SWOT analysis: a theoretical review. Journal of International Social Research, 10(51).

Kuznetsova, N. V., Rahimova, L. M., Gafurova, V. M., Simakov, D. B., Zinovyeva, E. G., & Ivanova, L. A. (2017). External environment as a factor of ensuring the competitiveness of organizations in the regional market of medical services.

Pearson, A. R., Schuldt, J. P., Romero-Canyas, R., Ballew, M. T., & Larson-Konar, D. (2018). Diverse segments of the US public underestimate the environmental concerns of minority and low-income Americans. Proceedings of the National Academy of Sciences, 115(49), 12429-12434.

Wu, Y. (2020, February). The Marketing Strategies of IKEA in China Using Tools of PESTEL, Five Forces Model and SWOT Analysis. In International Academic Conference on Frontiers in Social Sciences and Management Innovation (IAFSM 2019) (pp. 348-355). Atlantis Press.