External and Internal Business Environments-Apple Inc

External and Internal Business Environments-Apple Inc

Business environment factors affect a business company and its environment. These factors shape the environment in which a business operates and influence the organization’s plans and performance. Environmental factors may be beneficial or detrimental to a business, depending on which factor the business interacts with. This paper will explore Apple’s environmental factors and their impact on its operations. Also, the paper will investigate how the company leverages internal factors to compete in the global environment and what the future holds. Being one of the largest technology companies globally, Apple Inc. is exposed to diverse environmental factors characteristic of a global business environment.

General Environment

The business environment comprises dimensions of the larger society that impact the industry and its firms. These dimensions include demographic, legal, political, socio-cultural, technological, and sustainable physical (Hitt, 1). For this project, technological and demographic factors have influenced Apple Company most.

Demographic Factors

The demographic segment concerns a population’s geographic distribution, age structure, ethnic mix, and income level (Hitt, 1). The segment is mostly analyzed globally since demographic characteristics differ across countries. Regarding Apple company, population size is a major consideration as it formulates its strategy. Since the American market has saturated, Apple has made inroads in countries with higher growth potential. For instance, China has a population of almost 2 billion people. As a result, Apple Company undertakes primary production in China to benefit from the huge market base.

Technological Segment

Technological and innovative changes change how players in any industry operate. Some notable technological changes in the technological field include the introduction of electronic publishing (e-books) and the transition by businesses from brick-and-mortar business structures to internet selling (Hitt, 1). Apple is one such company that has explored emerging technologies to develop innovative products. One innovative product from technological advancement is iTunes, which distributes music on digital platforms. The company has made significant revenue from digital music distribution.

Five Forces of Competition

Apple Company has attained success as one of the most valuable companies globally. Porter’s five forces give an insight into which competitive forces influence a company’s competitive position (Hitt,1). The analysis of Apple company shows that the company leverages competitive disruption and buyers’ bargaining power to sustain its competitive position.

Bargaining Power Of Apple’s Customers

Buyers’ bargaining power is a strong force at Apple Company. That means that the company’s customers have more sway over purchasing decisions. One of the three factors contributing to the high bargaining power is the low switching costs (Choo, 3). Apple customers can easily switch brands without experiencing functionality issues. For instance, the Samsung brand manufactures phones with features identical to an iPhone. iPhone users also access the information they use to compare rival products, making it easy to switch to better brands. Such a force puts external pressure on Apple and other technology companies to keep innovating.

Industry Competition

Another influential outside force on Apple company is industrial competition. Apple faces strong competition from industry players like Samsung and LG (Choo, 3). The two companies’ continued innovation, intuitive thinking, and aggressive marketing pressured industry players to innovate. Another strong Porter’s force that aggravates competition is the low product differentiation. Most products throughout the industry serve similar purposes, such that consumers cannot feel any pain switching from one product to the other. For instance, most products on Android and iOS are almost identical; hence, customers can easily switch brands. Finally, the low switching cost to other brands means consumers can buy rival products with the same network capabilities, usability, and functionality.

Future Improvements

Based on Porter’s five forces analysis, Apple must make some internal improvements to stay competitive globally. For instance, since customers’ bargaining power is strong, they are likely to use products offered by competitors. There is a chance of massive walkout by customers from the company. To avoid that, the company should invest in external research and development. One of the technological changes the company can leverage to stay competitive is developing innovative payment systems. The company should take advantage of the growing e-commerce transactions and develop a one-stop payment system from which customers can pay multiple bills (Hitt, 1). Apple must also counter industry competition by manufacturing unique and differentiated products. The fact that an Apple customer can ditch an Apple iPad for any other brand calls for the need to implement differentiation for Apple products.

Greatest External Threat

The single-largest threat facing Apple company is the aggressive industrial competition by Apple’s rivals. Companies like LG and Samsung have given Apple solid competition, especially in the consumer devices segment (Zeng, 2). Competition in any industry forces companies to engage in aggressive marketing, research, and development to gain a competitive advantage (Hitt, 1). As a company engages in overt activities to gain a competitive edge, it will likely incur more production costs or risk losing its traditional market share.

Greatest Opportunity

Apple’s greatest opportunity is to diversify its product offerings and expand its market share (Zeng, 2). The company should use existing technological advancements to expand its product portfolio. For instance, there are currently few online booksellers of Amazon’s status. Therefore, Apple can leverage its wide coverage to distribute online books and other consumer services.

Strengths and Weaknesses

Apple’s most significant strength is that the company is the world’s strongest brand (Aljafari, 4). The brand reputation enables the company to sell since it is trusted. By the brand image, the company regularly introduces new successful products. On the other hand, the company’s major weakness is the exclusive distribution strategy. With an exclusive distribution strategy, Apple can only rely on a few trusted distributors to distribute its products. The strategy has significantly limited the company’s market reach.

Strategy Or Tactic

Apple should collaborate with emerging digital partners to distribute its products to remedy the limited distribution network. Online retail platforms like Amazon have wide global coverage and can reach the company’s customers in any part of the world. On the other hand, Apple should utilize its strong brand to penetrate emerging markets in South Asia and Latin America.

Resources, Capabilities, and Core Competencies

According to Choo (3), Apple’s primary core competencies are in the computer technology and consumer electronics market. Leveraging these core competencies, the company makes products that complement each other. For instance, a MacBook owner will likely buy an iPhone due to compatibility and accessibility issues. Besides, iPhone and MacBook users are likely to download products from iTunes. Such compatibility forces Apple customers to only use Apple products across the spectrum.

Sources

Aljafari, A. (2016). Apple Inc. Industry Analysis Business Policy and Strategy. International Journal of Scientific & Engineering Research, 7(3), 406–441. https://www.ijser.org/researchpaper/Apple-Inc-Industry-Analysis-Business-Policy-and-Strategy.pdf

Choo, (2021). A Critical Analysis of Internal and External Environment: Case Study of Apple Inc. Journal of International Business and Management. https://doi.org/10.37227/jibm-2021-08-149

Michael A. Hitt. 2020. Strategic Management: Concepts and Cases: Competitiveness and Globalization. 13th ed. Cengage Learning.

Zeng, L. (2021). An Analysis of Apple’s Internationalization Strategy. International Journal of Frontiers in Sociology, 3(17).

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External and Internal Business Environments-Apple Inc

Overview
In this assignment, you are to use the same corporation you selected for the Week 3 assignment and examine the industry in which the entity operates.
Use any or all of the following resources to research the corporation:
1. The corporation’s website.
2. Public filings from the Securities and Exchange Commission’s Filings & Forms page.
3. Strayer University’s online databases.
4. The Lexis Advance database.
5. Other credible sources. (The corporation’s annual report often provides insights that other resources may not include.)
(Note: It is expected that you will also use your course textbook to complete the assignment.)” Strategic Management: Concepts and Cases: Competitiveness and Globalization”
Instructions:
Use the External and Internal Environments Template [DOCX] to write a 4-6 page academic research paper in which you include the following:
*Note: The title page and source list are in addition to the 4-6 page requirement
1. Choose the two segments of the general environment that would rank highest in their influence on the corporation you chose:
-Assess how the two high-ranking segments in the general environment influence the corporation and the industry in which it operates.
2. Considering the Five Forces of Competition, choose the two you estimate to be the most significant for the corporation you chose:
-Evaluate how well the corporation addressed two of the Five Forces of Competition in the last five years.
3. With the same two forces in mind, predict how the corporation could improve its ability to address these forces in the next 5-10 years. Support your response with relevant, specific evidence.
4. Consider the external threats affecting this corporation and the opportunities available to the corporation:
-Assess how the corporation should deal with its most serious external threat and greatest opportunity. Support your position with two pieces of specific evidence.
5. Consider the selected corporation’s greatest strengths and most significant weaknesses:
-Determine the strategy or tactic, as explained in the textbook, the corporation should use to maximize its strengths and the strategy or tactic the corporation should use to minimize its greatest weakness. Support your choices with specific evidence.
6. Assess the corporation’s resources, capabilities, and core competencies.
7. Use three or more quality sources, including your textbook, to support your writing. Choose sources that are credible, relevant, and appropriate. Cite each source listed on your source page at least once within your assignment. (Note: Wikipedia and similar websites do not qualify as academic resources)
Access the library or review library guides for help with research, writing, and citation.
8. Produce clear, well-organized writing that applies the appropriate Strayer Writing Standards (SWS) style. Writing contains accurate grammar, mechanics, and spelling.
This course requires the use of Strayer Writing Standards. For assistance and information, please refer to the Strayer Writing Standards link in the left-hand menu of your course. Check with your professor for any additional instructions.
The specific course learning outcome associated with this assignment is as follows:
Analyze the effects of the general environment, competition, threats, opportunities, strengths, and weaknesses relative to a corporation.