MGMT Project Paper\u00a0<\/p>\n
Section 2: External Environment and Industry Analysis\u00a0<\/p>\n
Political Factors:\u00a0<\/p>\n
Tax payments are among one of the major political factors affecting Apple, Inc. Considering the company has made an appearance around the globe, they pay for a complex legal system to work to pay as little taxes as they can, particularly in the United States and parts of Europe. According to the article,\u00a0Commentary: Apple Avoided $40 Billion in Taxes. Now It Wants a Gold\u00a0Star?\u00a0\u201cApple currently holds about $252 billion in profits offshore, where it can avoid paying\u00a0US\u00a0taxes.\u00a0That is\u00a0over 90% of the company\u2019s total cash on hand. This profit is subject to the corporate income tax as soon as it\u2019s \u201crepatriated\u201d back to the US.\u201d It is clear Apple has taken extra steps to avoid taxes in the US, which is affecting the company politically. [1]\u00a0<\/p>\n
Apple has also had its fair share of heated debates with the US Federal Bureau of Investigation. One debate was fixated on the government demanding the access of a San Bernardino terrorist\u2019s cell phone who had just killed 14 people in a terrorist attack. According to the article,\u00a0Apple vs. FBI one year later: Still stuck in limbo\u00a0written by CNET, \u201cUS Magistrate Judge Sheri Pym ordered Apple to create that software for the FBI. Apple refused, with Cook arguing that the\u00a0order went too far and would threaten the security of all iPhone users. Bypassing the iPhone’s password meant creating a “back door” in its iOS mobile software that could then be used to access every other iPhone, he said.\u201d\u00a0Overall, Apple claimed it was a privacy issue, the FBI claimed it was a security issue, and the entire matter created a political divide, some siding with\u00a0Apple\u00a0and others siding with the government. [2]\u00a0<\/p>\n
An additional issue concerning the US government is the debate to remove the Absher app from the App Store that has been commonly used in Saudi Arabia. Congress has been criticizing this app due to the nature of its use. It is said to be used to track the women in the country and is being used to derail them of their basic human rights. Senator Ron Wyden wrote to apple\u00a0saying,\u00a0“It is hardly news that the Saudi monarchy seeks to restrict and repress Saudi women, but American companies should not enable or facilitate the Saudi government’s patriarchy.”\u00a0This just shows how much politics can interfere with the details in how a company composes itself. [3]\u00a0<\/p>\n
Another impactful political stake from the company is efforts made by political lobbying and is very influential in this analysis. Political lobbying, by definition, is \u201cLobbying\u201d means communicating directly or soliciting others to communicate with any official or his staff in the legislative or executive branch of government or in a quasi-public agency, for the purpose of influencing any legislative or administrative action\u201d as stated by the National Conference of State Legislatures\u2019 website. [4] The amount of money Apple puts towards lobbying positively correlates with their ability to sway policymakers into passing bills that benefit the company. Although Apple did increase\u00a0its\u00a0lobbying budget to $7.4 million in 2019, it is still no match to the other tech giants such as Facebook or Amazon who had increased their budgets to $16.7 million and $16.1 million, respectively. Apple claimed they typically stay away from most political battles unless\u00a0they\u00a0have great social or financial importance to the company. [5]\u00a0\u00a0<\/p>\n
\u00a0<\/p>\n
The figure below shows Apple\u2019s lobbying expenses in the United States from 2009 to 2020. [6]\u00a0<\/p>\n
\u00a0<\/p>\n
Economic Factors:\u00a0<\/p>\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Just like every other company today, Apple is also struggling with increased labor costs, particularly from China.\u00a0<\/p>\n
With the middle class quickly shrinking in most countries around the world, Apple\u2019s potential market is diminishing along with the need\u00a0for\u00a0their high-class products.\u00a0<\/p>\n
With the inflation rate increasing in the United States, it is becoming more difficult for Apple to sell in key markets such as Europe and China. [7]\u00a0<\/p>\n
Social Factors:\u00a0<\/p>\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Consumers concerned about ethics regarding Apple\u2019s manufacturing operation in China could reduce the company\u2019s overall appeal.\u00a0<\/p>\n
If tensions concerning China\u2019s politics continue to rise, customers in North America and Europe could take offense to Apple\u2019s relationship with China.\u00a0<\/p>\n
In the United States and Europe, younger consumers are favoring cheaper and less stylish products.\u00a0<\/p>\n
Technological Factors:\u00a0<\/p>\n
Google and Samsung have both proven they can copy Apple\u2019s new products, making Apple unable to appear unique to the consumer.\u00a0<\/p>\n
Fewer consumers\u00a0are purchasing Apple\u2019s laptops now that smartphones and tablets can do everything the computer can, and more.\u00a0<\/p>\n
Apple\u2019s operating system is not compatible with all software, such as QuickBooks, making\u00a0personal\u00a0computers useless when you need them most.\u00a0<\/p>\n
Legal Factors:\u00a0\u00a0<\/p>\n
Now that Apple\u00a0has decided\u00a0to release Apple Pay, they will now face more regulation and government interference as it is a financial service.\u00a0<\/p>\n
Apple Pay also increases the opportunities to face litigation.\u00a0<\/p>\n
A good amount of Apple\u2019s income is from software and music which is highly susceptible to piracy and litigation.\u00a0<\/p>\n
Environmental Factors:\u00a0<\/p>\n
One major environmental factor Apple faces is the disposal of devices that no longer work and contain lithium batteries. This is an expense the company may have to take on considering these devices should not make their way into landfills.\u00a0<\/p>\n
China recently passed another law to attempt to reduce greenhouse gas emissions in the country. This could increase overall manufacturing costs for Apple.\u00a0<\/p>\n
Any increase in electricity rates is a huge additional expenditure for Apple considering they run data centers and other internet infrastructures 24\/7.\u00a0<\/p>\n
Opportunities:\u00a0<\/p>\n
Ability to enter green market\u00a0<\/p>\n
Option to expand distribution\u00a0<\/p>\n
Consistent Consumer Growth\u00a0\u00a0<\/p>\n
Smart Watch Growth\u00a0<\/p>\n
Increase Use in Artificial Intelligence\u00a0<\/p>\n
Threats:\u00a0<\/p>\n
Coronavirus Outbreak\u00a0<\/p>\n
Supply Chain Problems\u00a0<\/p>\n
Counterfeit Products\u00a0<\/p>\n
Increasing Competition\u00a0<\/p>\n
China Tariffs\u00a0<\/p>\n
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References:\u00a0<\/p>\n
[1]\u00a0Hoxie, J. (2018) \u201cCommentary: Apple Avoided $40 Billion in Taxes. Now It Wants a Gold Star?\u201d\u00a0Fortune,\u00a0Available at:\u00a0https:\/\/fortune.com\/2018\/01\/18\/apple-bonuses-money-us-350-billion-taxes-trump\u00a0<\/p>\n
[2]\u00a0Tibken, S. (2017) \u201cApple vs. FBI one year later: Still stuck in limbo\u201d\u00a0CNET,\u00a0Available at:\u00a0https:\/\/www.cnet.com\/news\/apple-vs-fbi-one-year-later-still-stuck-in-limbo\/\u00a0<\/p>\n
[3]\u00a0Owen, M. (2019) \u201cMembers of congress demand Apple take down Saudi Absher app\u201d\u00a0Apple Insider,\u00a0Available at:\u00a0https:\/\/appleinsider.com\/articles\/19\/02\/25\/members-of-congress-demand-apple-takes-down-absher-app\u00a0<\/p>\n
[4] (2021) \u201cHow States Define Lobbying and Lobbyist\u201d National Conference of State Legislatures, Available at:\u00a0https:\/\/www.ncsl.org\/research\/ethics\/50-state-chart-lobby-definitions.aspx\u00a0<\/p>\n
[5] Campbell, M. (2020) \u201cApple spent $7.4M on lobbying efforts in 2019, well below outlays from Amazon and Facebook\u201d\u00a0Apple Insider,\u00a0Available at:\u00a0https:\/\/appleinsider.com\/articles\/20\/01\/22\/apple-spent-74m-on-lobbying-efforts-in-2019-well-below-outlays-from-amazon-and-facebook\u00a0<\/p>\n
[6]\u00a0Vailshery, Lionel Sujay (2021) \u201cLobbying Expenses of Apple in the United States from 2009 to 2020. Available at:\u00a0https:\/\/www.statista.com\/statistics\/1043061\/lobbying-expenses-of-apple\/\u00a0<\/p>\n
[7]\u00a0https:\/\/pestleanalysis.com\/apple-pestle-analysis\/\u00a0<\/p>\n
\u00a0<\/p>\n
Section 3:\u00a0Analysis of Internal Condition\u00a0<\/p>\n
Apple is arguably the worlds most recognized brand\u00a0and is the world\u2019s most valuable company with a staggering 2.57 TRILLON dollar market capitalization;\u00a0it is clear that Apple\u00a0is doing something correctly.\u00a0The purpose of this section is to\u00a0highlight areas where Apple\u00a0is able to\u00a0create competitive advantage\u00a0with specific focus on their\u00a0core competencies and resources,\u00a0and\u00a0to\u00a0identify\u00a0the areas where Apple\u00a0sustains\u00a0their\u00a0competitive advantage, and\u00a0in the next section, we will discuss strategies Apple can adopt\u00a0to grow their\u00a0competitive advantage; we will also compare how Apple\u2019s internal firm resources and capabilities compare to their competitors in the market.\u00a0<\/p>\n
When comparing Apple to their competitors, it is important to highlight where Apple\u2019s competitive advantage lies and how they developed that competitive advantage, and for this we will be analyzing\u00a0how Apple has developed their core internal resources and\u00a0capabilities; we will then examine Apple\u2019s weaknesses and in the next section make recommendations on how to remedy these weaknesses.\u00a0As aforementioned, Apple is arguably\u00a0the world\u2019s most recognized brand, which is no easy task; when comparing directly to Apple\u2019s brand to their competitors, if they\u00a0are able to\u00a0best the likes of Microsoft,\u00a0Hewlett-Packard, Sony, Samsung, and more, this speaks to the quality and recognition of their brand. Apple\u2019s brand\u00a0image and brand equity is arguably their biggest asset and intangible resource.\u00a0Apple\u2019s brand places emphasis on lifestyle and imagination, catering to\u00a0adventurers and creatives alike.\u00a0Apple has also been able to create and foster a community between its users.\u00a0Apple’s mission statement is as follows:\u00a0<\/p>\n
\u201cTo bring the best personal computing products and support to students, educators, designers, scientists, engineers, businesspersons and consumers in over 140 countries around the world.\u201d\u00a0<\/p>\n
Apple\u2019s brand is often also tied to innovation, and as can be seen in their mission statement, they strive to bring the best products to their\u00a0consumers; Apple is touted as one of the key innovators within the tech space they also note that they wish to\u00a0support\u00a0their\u00a0consumers.\u00a0Since their inception in 1976, Apple\u2019s mission has\u00a0also\u00a0been to improve the relationship that their users have with their products\u00a0and\u00a0for this relationship to develop, Apple has been focused on creating products of incredibly high quality\u00a0and usability.\u00a0The relationship that Apple has been able to develop between their customers and their devices is a direct product\u00a0of the brand they have\u00a0been able to create. One of the largest benefits Apple has been able to take advantage of due to their brand loyalty\u00a0is the high premiums they charge for their devices. Below are two images, one highlighting the increasing prices in iPhones (Apple\u2019s flagship product) over the years, and the\u00a0market share\u00a0of different\u00a0phone manufacturers within the United States.\u00a0<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
Despite the high premium iPhone owners pay for their devices, Apple continues to dominate the U.S.\u00a0market, and sustain their competitive advantage.\u00a0<\/p>\n
Another important aspect of Apple\u2019s brand is usability. The\u00a0usability advantage that Apple provides is how well each of their products integrate and interact with each other; this integration and interaction between Apple’s products is also known as the Apple Ecosystem.\u00a0This ecosystem is fueled by proprietary hardware\u00a0and software\u00a0that Apple\u00a0has specifically designed and catered to work best\u00a0between\u00a0its own products; for instance, a single Apple ID can be used to sign\u00a0in to all of your Apple devices, and with this all of the data and information associated with your Apple ID can be shared\u00a0seamlessly\u00a0between\u00a0all of your separate devices; you took pictures at a picnic you and your spouse attended\u00a0on your iPhone, at the time of capture these pictures are uploaded to your personal iCloud that is associated with your Apple ID, and when you get home you will\u00a0be able to view these pictures on your iPad, MacBook, Apple TV, etc..\u00a0Apple\u2019s Ecosystem also serves to provide a consistent experience across\u00a0all\u00a0their devices, part of this mission is fueled by specific innovations and design choices Apple has made for their\u00a0devices.\u00a0If you are in the market for buying a new computer, if you know that the experience on a MacBook will be\u00a0similar to\u00a0that of your phone or tablet (in this case iPhone and iPad), you are more likely to stick with that consistency.\u00a0UI\u00a0and\u00a0hardware\u00a0design are two of the more obvious attempts to create a consistent experience across their devices. The UI between all of Apple\u2019s devices are incredibly\u00a0similar but\u00a0are\u00a0unique and significantly different from non-Apple products\u00a0which provides the user a seamless experience between using their\u00a0Apple\u00a0devices, while at the same time disincentivizing customers\u00a0that are already within\u00a0their ecosystem from leaving.\u00a0As aforementioned, Apple\u2019s UI designs for their products are\u00a0purposefully similar between their devices;\u00a0take for instance the images seen\u00a0below:\u00a0<\/p>\n
\u00a0\u00a0<\/p>\n
The first image is one of the iPhones,\u00a0which\u00a0operates on\u00a0IOS\u00a0(the same as every other iPhone).\u00a0The second image is\u00a0of the MacBook Pro, which operates on MacOS. Note the\u00a0design\u00a0consistency between the 2 devices.\u00a0All\u00a0the apps\/programs that are shared between the 2 devices share the same\u00a0logo and\u00a0design,\u00a0and\u00a0the\u00a0UI itself features the same design language\u00a0(round corners,\u00a0bright and vibrant colors, etc..). This is another one of the competitive advantages Apple has been able to foster; by developing all their software\/designs in house,\u00a0limiting these designs and software to only their products, and\u00a0constantly improving and innovating these designs to suit the needs of their customers,\u00a0Apple\u00a0has\u00a0created desirability and reliance on their products for those who are looking for a consistent experience,\u00a0or those who are unwilling to give up on it. Due to the uniqueness of Apple\u2019s software designs, leaving the Apple Ecosystem to rely on other products would come with a learning curve.\u00a0Apple\u00a0devices do have a learning curve of their own,\u00a0but Apple has devoted RND to creating resources for their customers to utilize, such as Siri, the voice assistant which can assist with\u00a0both simple and complex tasks\u00a0(note, all of the tasks Siri is capable of can be performed without Siri), or the Genius Bar, which allows Apple\u2019s customers to have face to face technical support on their products; innovations such as Siri\u00a0and the Genius Bar\u00a0further\u00a0disincentive Apple\u2019s customers from leaving their ecosystem\u00a0if their customers have become reliant on these proprietary offerings. Apple\u2019s competitors are developing\u00a0and innovating\u00a0alternatives to Siri\u00a0such as Google Assistant, Bigsby,\u00a0Alexa and more, and have begun to develop interoperability between different devices, but Apple seems to be lightyears ahead.\u00a0The Apple\u00a0Ecosystem\u00a0is a core component of their\u00a0product offering which is a key aspect of their competitive advantage.\u00a0<\/p>\n
While Apple\u2019s\u00a0has utilized their\u00a0internal\u00a0resources and capabilities to\u00a0garner\u00a0them incredible competitive advantages, they have obvious\u00a0weaknesses\u00a0that are important to remedy\u00a0in order to grow and sustain their competitive advantages. As aforementioned, Apple\u2019s biggest strength is their brand, so any detriment to their brand\u00a0is a detriment to the entirety of their company. Apple has been accused of\u00a0anti-competitive behavior, as well as exploiting their work force in China, where their products are made. While Apple has a feverishly loyal and devoted customer base, it is hard to support a company that allegedly exploits child workers. Apple prides themselves on differentiation and providing innovation to their customers, but if they engage in anti-competitive behavior, their customers are inhibited from experiencing the innovations that Apple\u2019s competitors can provide. Competition is good for consumers, so governments have been cracking down on anti-competitive behavior (particularly with large tech companies). Apple\u2019s\u00a0most successful product is the iPhone, and while it is an incredible source of revenue, Apple is arguably over reliant on the iPhone\u00a0to sustain their business. According to research performed by investopedia.com, 49% of Apples Q3 2021\u2019s revenue came from the iPhone. With the increasing premium of Apple\u2019s devices and the increased quality and longevity of Apple\u2019s devices,\u00a0Apple needs to be increasingly more innovative in order to\u00a0drive demand for their new products, and some\u00a0view\u00a0their more recent\u00a0innovations as gimmicky (e.g.\u00a0arbitrary performance increase in their products year over year, increased battery life, etc.).\u00a0Recommendations on how Apple can remedy these\u00a0problems will be discussed in the next section.\u00a0<\/p>\n
Section 4: Strategy Development\u00a0<\/p>\n
Taking into account\u00a0the analysis of\u00a0Apple\u00a0competitors and external\/internal environment, we would make the following strategic recommendations for\u00a0Apple\u00a0future managerial decisions: 1) continue to expand on existing physical storefront infrastructure support with new store openings; 2) expand and improve upon the growing online; and 3) scale capabilities and reduce existing issues within its supply chain operation.one of\u00a0Apple\u00a0sources of competitive advantage over online competitors such as\u00a0Samsung\u00a0is its nationwide\u00a0<\/p>\n
Competitive Strategy\u00a0<\/p>\n
Competitive strategy is defined as a company\u2019s long-term plan of action intended to lead to greater competitive advantage over competitors. Competitive strategy is developed from evaluating the company\u2019s strengths and weaknesses compared to its competitors.\u00a0Apple\u00a0main competitors are\u00a0Samsung\u00a0in the area and\u00a0Google\u00a0<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
\u2013 Section 2\u00a0<\/p>\n
\u2013 Intro and Conclusion\u00a0<\/p>\n
Sections 3 (.)\u00a0<\/p>\n
\u00a0strategy Development<\/p>\n","protected":false},"excerpt":{"rendered":"
MGMT Project Paper\u00a0 Section 2: External Environment and Industry Analysis\u00a0 Political Factors:\u00a0 Tax payments are among one of the major political factors affecting Apple, Inc. Considering the company has made an appearance around the globe, they pay for a complex legal system to work to pay as little taxes as they can, particularly in the […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[10],"class_list":["post-79251","post","type-post","status-publish","format-standard","hentry","category-research-paper-writing","tag-writing"],"_links":{"self":[{"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/posts\/79251","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/comments?post=79251"}],"version-history":[{"count":0,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/posts\/79251\/revisions"}],"wp:attachment":[{"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/media?parent=79251"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/categories?post=79251"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/tags?post=79251"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}