Apple Case - Bkey601 Strategic Perspectives

BKEY601 STRATEGIC PERSPECTIVES

FINAL CASE STUDY ASSIGNMENT (50% of module) 2011/12

By Sergey Bogdanovich

Word count:

ANALYTICAL REPORT ON APPLE

CONTENT:

1. Content

2. In-depth analysis of the competitive forces and strategic issues shaping the Smartphone & Tablet industry from 2011 onwards.

3. Internal strategic audit of the issues that Apple faces.

4. Identification of the external stakeholder issues that Apple faces and critical assessment of their impact on the corporate reputation and brand equity of Apple Inc.

5. Summary of the strategic options that are appropriate to Apple and definitive recommendations for Apple to sustain its future position in the Smartphone & Tablet Industry

6. Appendices

7. References

In-depth analysis of the competitive forces and strategic issues shaping the Smartphone & Tablet industry from 2011 onwards.

I will start with PESTEL analysis:

Political

The political environment that Apple operates in is relatively stable and has been over a long period of time. However, due to Apple's products are widely distributed and sold all over the world, there is a risk of problems occurring in some countries where trading with Apple's distributors is not feasible. Terrorism factors come into this, and because of such factors, Apple's products would not be able to reach some affected markets and would restrict the growth of the company. Some governments may interfere with different protectionism policies like in Japan and hence Apple had to adapt its policies. Governments may even enforce barriers to entry however due to the global nature of Apple's operations; this factor does not have much influence. Furthermore, since one-third of Apple's production is outsourced, these factors may even interfere in the timely manufacturing of the products.

Economic

Economically, the industry has been in a stable shape ever since the 1990's recession and the 1999's economic collapse. Significant companies failed as a result and those few years were not good for the technology companies. Also, since a huge number of computers are purchased by the government, any political problems or economic recession activity has a negative consequence on the computer industry and thus on Apple. The recent recession has slowed down the economic growth of the company from the inside and as well as in the decrease in demand of computers. However, this decrease has been met with increase in sales of company's other products. Furthermore, when the economy shows a sign of improvement, consumer spending and investment might increase as well thus improving the whole industry.

Social

The social trend in the case of Apple is very important because consumers know that Apple's products are innovative, fashionable and they carry a fashion statement. Having a hi-tech Apple computer or an iPod/iPhone/iPad is a way to show others that a person belongs to the 'cool' class. Due to the increasing usage of computers/iPads and internet in the education and other sectors, there is more demand of devices with specific applications that help students to learn, doctors to cure, workers to build. Also due to better perceived efficiency and awareness, the global trend is increasing in the usage of computers/smartphones/tablet devices which is a sign that the industry is still growing.

Technological

Being a technological company, Apple has always been in the limelight by developing quality and innovative products. This trend grew from the start when Apple saw that the industry giants like IBM, HP and Intel were making headway into the technological development of hardware. To match the capabilities powered by the new chips and hardware systems, companies like Microsoft and Apple competed for the best operating system. Soon this fight took a different turn when Microsoft took the lead while Apple became focused on a particular niche. Ever since then, technology has drastically improved giving the company more chance to shrink the hardware size and make it even more faster and powerful. Even more devices can be connected to the computer enabling wireless communications and development of media devices.

Environmental

With the advent of modern computing, technologies keep on evolving whole the old ones get obsolete. Organizations and consumers have to regularly change their machines to stay in touch with the latest applications. The problem is that these old systems are of hardly any use anymore and thus computer wastage has been increasing. Manufacturers are now ordered to develop machines that use less electricity or that can be recycled and are 'green' in some way. Furthermore the modern approach to ethics and social responsibility dictates the companies like Apple the approach to strategic management and different environmental issues.

Legal

Being a global company Apple has to adapt to different legislations and legal systems in new areas which can be quite different from those at home. Local regulatory authorities and bodies like Copyright Arbitration Royalty Panel (CARP) and Recording Industry Association of America (RIAA) can influence the working of the company. Due to several copyright infringement cases, the Music Online Competition Act had to be tweaked to provide security. These laws and changes affect the company a lot and promote legal downloading of media files, different applications and curb piracy.

1 - Smartphones. Close to maturity in Developed markets, and recently introduces in emerging markets.

2 - Tablets. Close to entering growth stage in developed markets and just introduced in emerging.

Internal strategic audit of the issues that Apple faces

Brand positioning

Brand name of products is very important with activities of