The performance of a business organization in the market is directly related to the management strategies it has employed. Corporations experience both internal and external elements that contribute to their ability to dominate the market. This paper will analyze several aspects that influence the performance of Apple Inc. Corporation. Furthermore, it will analyze the general environmental factors, forces that drive its competitive advantage, and strategies to address its future ability to remain active in the industry.
Generally, the business environment consists of two aspects, one of which the corporation can manipulate and the other that it has no control over. The latter indicates the general surrounding that influences the success of the organization. The factors can either present an opportunity for the firm or, under some circumstances, become a threat to its activities. It is upon the Apple management board to keep track of the trends that the surrounding displays to predict and take advantage of the opportunities available and have plans to counter the possible hazards. Some of the general environments where the corporation operates are political and economic.
In the consumer electronics industry, political and environmental factors play a significant role in influencing the business’s success. These surrounding institutes countries’ regulations, government laws, and the state of the political atmosphere. The Apple Company has great opportunities that are contributed by this factor. First, most countries have developed the aspect of free trade, giving it the advantage of establishing its operations in most countries around the world. This will lead to high market coverage, which increases sales of the product, increasing the revenue. Second, most nations, especially the developed ones, have a stable political environment, thus enabling the activities to be conducted smoothly without chaos or destruction of properties.
Despite the opportunities related to the political factors, there are some cases where the Apple organization faces great risk, especially in countries where governments impose high trade tariffs. Such a law may result in losses, thus lowering the overall return for the business. Furthermore, political pressure among countries may also cause a threat to the consumer electronics industry. For example, the case of the United States and China may make the two states have firm regulations on products from each country, hence reducing the sales of the commodities. Apple’s products are majorly manufactured in China because of cheap labor, so in case of such unrest, the firm’s operation would be affected negatively, decreasing its performance in the market.
Economic factors relate to the overall performance of the entire economy of various countries in the world. Generally, the growth rate of developing countries creates a great opportunity for Apple Company to invest and supply its products. The increasing number of upcoming economies would allow the firm to have a wide market to distribute electronics, thus generating more income. Similarly, developed nations have stable and reliable markets, making it easier for the industry to supply the products. Consistent marketplaces give the organization a high chance to produce and deliver a large number of goods to consumers.
Furthermore, the increased performance of the economies across the globe has led to an increase in disposable income for consumers. This has made the target customers able to purchase most of the products, boosting the sales. On the other hand, some countries have low income, thus lowering the ability of most people to buy electronics, hence limiting Apple’s market share. In addition, a rise in labor costs in some markets like China would affect the prices of the products.
Five Forces of Competition
The five forces give deep insight into how the business takes advantage of the external factors to influence its overall performance in the market. The consumer electronics industry has several players offering similar products to the customers, creating a competitive environment for Apple Inc. Company. The analysis indicates what the management body of the corporation does to ensure it remains operative despite shortfalls associated with external factors (Hitt, 2). Some of the areas of consideration are competitive rivalry and the bargaining power of buyers.
In the consumer electronics, software, and hardware market, many competitors compete for the customers’ attention, causing tension in the industry. This makes Apple experience strong rivalry from firms like Microsoft, Samsung, and Sony. This force is important for the business because it influences the revenue a company generates, the size of its market share, and the ability to develop. In the industry, Apple faces aggressiveness from other firms since most of the products they offer have almost similar features and serve the same purpose. This makes the business strategize effectively to deliver products that have better performance to ensure they retain customers. There is also ease for customers to shift to purchase products from competitors because of price factors which make competition stiff in the market for electronics (Chatzoglou et al., 1). Therefore, the Apple Corporation must consider the aspect of rivalry to ensure it remains competitive in the business.
Buyers Bargaining Power
Buyers have a strong effect on determining the success of a business in the market. The choices consumers make and the perception they have towards a product enable them to have bargaining power in the market. Apple’s operational activities are much dependent on customers’ purchase decisions. Generally, clients do not incur relative costs to shift from buying one product to another product; the Apple Company is concerned about how to improve its commodities to satisfy their needs. The ease of changing brands in the market makes Apple strategize its plan to maintain buyers.
In order for Apple to be able to improve its competitive advantage in the consumer electronics market, it should make the prices of its products lower than the rivals while keeping the quality high. This would influence most price-sensitive consumers to value the brand in the industry. Similarly, to manage customers’ power to shift to other firms, Apple should design and produce electronic products that customers can easily use. Furthermore, they should improve the battery life of the gadgets to sustain consumers for longer hours compared to those of competitors.
Greatest External Threat
In the industry, the greatest external threat to Apple Corporation is competition. With the advancement in technology, most of the competitors in the market are capable of producing better electronics, hence giving its brands competition. An increase in competitors has led to the development of cheaper products, hence reducing sales in the market. To overcome the threat, Apple should improve the quality of its devices and lower their prices as well.
The greatest opportunity the Apple Company has is qualified professionals. Having staff with adequate capabilities and knowledge allows the firm to explore and research different technologies that can perfect the products. Furthermore, the team can easily improvise and make the electronics suit the consumers’ needs, hence increasing the brand awareness in the market. They can also work on new opportunities in the market to give the company advantage over competitors with less qualified workers. Apple should continue offering the staff members proper and continuous training to advance their skills and abilities.
Strengths and Weaknesses
The strengths of the Apple Company include top technology and a brand of choice. This has allowed it to remain on par in the industry for a long period. The products manufactured by the firm display a high level of integrated features, making them user-friendly. Their consistent quality has made consumers prefer them over alternative devices. Despite the strengths, Apple has weaknesses like the incompatibility of devices with other technology and high prices (Li, 3). Most of the smartphones and iPad software only operate on Apple’s technology, which makes it difficult for consumers to share them. Additionally, the commodities are expensive and hence not affordable by most clients.
Strategy or Tactic
To improve the level of professionalism, Apple should offer training services to its employees. Similarly, to make the brand have value, it should have features that make it more appealing to the customers. On the other hand, to reduce the effect of incompatibility, the Apple research team should consider adjusting their technology to accommodate other software for the customers’ benefit. Additionally, regarding premium prices, Apple should categorize its products based on demographic factors.
Resources, Capabilities, and Core Competencies
Apple’s resources include competitive employee packages, human capabilities, and business automation. These resources give the firm a competitive advantage in the market; they enable it to operate accordingly (Chatzoglou et al., 1). Its capabilities are rapid innovation that allows the organization to develop new and unique products. The core competencies are a global brand, making it valuable because it is difficult to imitate by other competitors.
Chatzoglou, P., Chatzoudes, D., Sarigiannidis, L., & Theriou, G. 2018. The role of firm-specific factors in the strategy-performance relationship: Revisiting the resource-based view of the firm and the VRIO framework. Management Research Review.
Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2020). Strategic management: Concepts and cases: Competitiveness and globalization (13th ed.). Cengage Learning.
Li, Y. 2021. Apple Inc. Analysis and Forecast Evaluation. Proceedings of Business and Economic Studies, 4(4), 71-78. Web.