Internal and External Factors Impacting Apple's Business Strategy

Executive summary

The aims of this report are to demonstrate the key internal and external factors of Apple Inc. that could affect the firm’s ability to develop company strategic to the market. The finding in this report included many information which is high possibility that these factors may affect with Apple’s strategy.

Background of Apple

Apple Company (hereinafter referred to as “Apple”) is an American company which is the head office is located in Cupertino, California. According to the Consumer News and Business Channel (CNBC) revealed that Apple comes on the second place of the most valuable company in the world. Apple designs, manufactures and markets which are included mobile communication, media devices, personal computer and also sell a related software. The Apple established in 1977 by Steve Jobs and Steve Wozniak. After the resignation of Steve Jobs from Apple, Tim Cook is now a CEO who running Apple Inc since August 2011.

Internal Factors

In strategic management, internal factors can be defined an internal environment that could be affected the company strategy. It associated with the human resources of the business or organisation that people or employee are follow the mission of the company.

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Organisational Culture

Business strategy for Apple is committed to bring out the best experience of the innovation through not only from the service but also from the software and hardware to Apple’s customers (Apple.com, 2018). The fundamental of the organisation is based on the team motivation, working together, employee responsibilities, innovation and excellence. Moreover, Apple’s organisation under Tim Cook who previous former employee before a director of Apple stated that “embedded values in the company made it perform extremely well” There are some unique criteria in Apple’s organisation that can be identified as the key components of its organisation which are innovation, accountability and secrecy (Mayesha, 2018). As can be seen that in WWCD that held on every March and September of each year, there is just only the rumor from the unreliable sources about Apple’s innovation which are not official come out from the current employee of Apple.

Chief Executive Officer (CEO) of Apple Inc.

Tim cook become to be CEO of Apple since August 2012 after the resigned of Stave Jobs – the founder. Tim Cook advocated an autocratic leadership style to make Apple culture over common and this is not the key of success for Apple which is can be defined as a creative company (Muhammad Abdul Rauf, 2014). Cook’s communication style is reflecting his desire that he wish to see the company grow and success. Moreover, he motivates and communicate with his employee in the way that calmly and precisely about the all the issues, nevertheless, Cook still maintain the direction that he wants it to be. In addition, Tim Cook bring many successful products to Apple. Tim developed first Apple Watch to help people to track fitness and health and also another product that make Apple become the second of the most valuable company in the world.

External factors

External factors can be defined as a business owner, managers or organisation have no power to control the factors. The external factors also included political, technology or economic. In this part, will be discuss about the political and technology that may affect with the firm.

Political

The political issue is raised recently according from the political issue between United State of American and China. It becomes more risk for Apple because of revenue is generated nearly 20 percent from Greater China which around to $44.7 billion. Moreover, Apple relies on third party supplier which is Foxconn a big Asian supplier who assembly the product as iPhone (Kharpal, 2018). As mentioned above, most of production of Apple is relies on Foxconn which still have issue regarding long working hours bring stress to the worker. This issue leads a political pressure to Apple (Usman Ali Khan, Mohammd Noor Alam & Shabbir Alam, 2015). Recently, FAA announced to banned Apple 15-inch MacBook from the customer due to the fire hazard. After that, Apple.com announced to recall all the product that sold between September 2015 and February 2017, where products contained the battery that may overheat and pose a safety risk.

Technology

Apple is the top leading technology company in the world. Apple’s products focus to provide the best experience to their customer according to Apple’s business strategy.  Apple create their own products by using the disruptive innovation theory. Then Apple maintain the sustainable competitive advantage by took out the uncertainty of the technology by sustaining innovation. Apple giving the edge of improve their product rather than looking for the big changes.  (Insung Son, Jinsu Kim, Gwijeong Park and Sihyun Kim, 2018). Nevertheless, the technology is rapidly change in the last 50 years and the innovation of technology will become more faster, better and cheaper in every technological products in every year which can allow a new market player or new technology innovation come in the market (Johnson, K; Li, Yang; Phan, Hang; Singer, Jason; and Hoang T., 2012). In 2019Q1, the smartphone market of Apple reduced 29.5% from last year as shipments dropped to 36.8 million units. The main reason is most competitors will launch 5G phones and new foldable devices (Melissa C. & Ryan R., IDC.com, 2019).

Major challenge facing for Apple

As mentioned, the technology changes so fast, accuracy and all the devices become cheaper. Apple needs to develop their company to be more consider about the price strategy more seriously. If compare with the competitors, Apple’s products are expensive more if compare in a same category. Apple try to maintain their quality and create the company value through expanded education program and provided skill-building opportunities for Apple supply chain employee. Not only the creative products that Apple brought out to their customer but also the excellent service that Apple needs to be considers as well. In the end, the most important too. As can be seen, Apple just announced the new repair program that provided to customer additional options for the most common out-of-warranty iPhone repairs. This could be the benefit to customer and create a brand loyalty on the other hand this could be affect with the sale of the new products.

Proposed approach to taking the challenge

To be more successful and competitive advantage in the business, Apple should consider in many criteria. First is provide and improve service or application to be more efficiency to try to gain back their customer. According to Leonid, apple’s reported plan to cut the production of iPhone 10 percent in the first quarter which is reflect the customer loyalty which mean that Apple need to compete more in another market but without affects another products or services (Lenoid Bershidsky, 2019). Last but not least, Apple done well in the product innovation which they have a strong believed ongoing investment in research and development in all every aspect that make the company move forward.

References

• Apple Inc. 2019, Annual Report 2018. Available at https://investor.apple.com [Accessed 28 August 2019]
• Arjun Kharpal 2018., “Apple is the big tech firm most at risk from a US-China trade war”, Available from https://www.cnbc.com/2018/06/19/apple-is-the-big-tech-firm-most-at-risk-from-a-us-china-trade-war.html [Accessed 5 September 2019]
• Insung Son, Jinsu Kim, Gwijeong Park and Sihyun Kim, 2018 “The Impact of Innovative Technology Exploration on Firm Value Sustainability: The Case of Part Supplier Management.” Sustainability 2018, pp. 1-17.
• Johnson, Katherine; Li, Yang; Phan, Hang; Singer, Jason; and Trinh, Hoang 2012., "The Innovative Success that is Apple, Inc.". Theses, Dissertations and Capstones. Paper 418.
• Lucy Handley 2019., “Amazon beats Apple and Google to become the world’s most valuable brand”, Available from: https://www.cnbc.com/2019/06/11/amazon-beats-apple-and-google-to-become-the-worlds-most-valuable-brand.html [Accessed 3 September 2019]
• Mayesha Tasnim 2018., "An Organizational Analysis on Apple." European Journal of Business and Management Vol.10, No.11, 2018 pp. 35-40.
• Melissa Chau and Ryan Reith 2019., “Smartphone Market Share”, Available from: www.idc.com [Accessed 3 September 2019]
• Muhammad Abdul Rauf 2014., “Antecedents and Consequences of Leadership Styles: Evidence from Successful Entrepreneurial Ventures” International Journal of Innovation, Management and Technology, Vol. 5, No. 5, October 2014
• Usman Ali Khan, Mohammd Noor Alam & Shabbir Alam 2015., “A CRITICAL ANALYSIS OF INTERNAL AND EXTERNAL ENVIRONMENT OF APPLE INC” International Journal of Economics, Commerce and Management United Kingdom Vol.3, No.6, 2015
• Leonid Bershidsky 2019., Imagining Apple’s Post-iPhone Future The tech giant needs to do more to make its products compatible with competitors’. Available from: https://www.bloomberg.com/opinion/articles/2019-01-09/time-to-start-imagining-a-post-iphone-apple [Accessed 7 September 2019]