Apple SWOT Analysis

Over the last five decades, Apple Inc. has succeeded in creating a business empire in the technological industry. Apple’s I-products are among the most loved technological items across the world. In the business world, Apple’s IT products and operations are unmatched. To this end, Apple Inc. growth is remarkable and shows no signs that it will decline in the near future. This is typified by the fact that the company keeps setting new sales records for every product that it introduces into the market. Whatever Apple Inc.’s does only catches its competitors unaware and therefore they play the role of catching up by mimicking its strategy though largely unsuccessfully. This paper examines the impact of various internal and external organizational environments that affect Apple Inc. As such, the paper will keenly explore the extent to which the organizational environment affect Apple. Among the various external and internal environments that will examined in this paper include economic, social, technological and economic factors. It will also give the implications that these factors have on Apple Inc. if the company is to continue with its success story.

1. Running head: INTERNAL AND EXTERNAL ENVIRONMENTS OF APPLE INC. 1







Internal and External Environments of Apple Inc.

XXXXXXXX
Module 2 Case
ITM590 – Integrative Project (Capstone Course)
January X, 20xx

2. INTERNAL AND EXTERNAL ENVIRONMENTS OF APPLE INC. 2

Over the last five decades, Apple Inc. has succeeded in creating a business empire in the
technological industry. Apple’s I-products are among the most loved technological items across
the world. In the business world, Apple’s IT products and operations are unmatched. To this end,
Apple Inc. growth is remarkable and shows no signs that it will decline in the near future. This is
typified by the fact that the company keeps setting new sales records for every product that it
introduces into the market (Yoffie & Penelope Rossano, 2012). As a result, most people attribute
Apple’s success to in the technology industry to its innovation. Apple is considered as a pace
setter and the leading technological company of the world. For a long time, Apple Inc. has been
able to measure the current status of its markets and make decisions that help it to keep growing
(Ancona, 2005). Even though Apple Inc. does not always introduce new technological products to
the market as the first company, it often lowers the prices of its technological products because
the produce these products in masses. However, it is still the first company to raise the products’
prices again. Whatever Apple Inc.’s does only catches its competitors unaware and therefore
they play the role of catching up by mimicking its strategy though largely unsuccessfully. This
paper examines the impact of various internal and external organizational environments that
affect Apple Inc. As such, the paper will keenly explore the extent to which the organizational
environment affect Apple. Among the various external and internal environments that will
examined in this paper include economic, social, technological and economic factors. It will also
give the implications that these factors have on Apple Inc. if the company is to continue with its
success story.
Apple Inc. is an example of an adaptive enterprise of the modern world. This is because
the company has responded appropriately to the various changes that have occurred in the
business and social environment where it operates. Among the changes that the company has had

3. INTERNAL AND EXTERNAL ENVIRONMENTS OF APPLE INC. 3

to deal with include those that have been fueled by the evolution of the society ecology, politics,
economy, and technology. As an adaptive company, Apple Inc. is characterized by being simple,
transformational, and self-organizing. To this end, the company has limited management
hierarchy of command, has teams that have more power and are vertically integrated (Gronn,
2002). The company relies on the feedback process so that it could operate efficiently.
Additionally, the company keeps changing and responding to the behaviors and beliefs of the
customers and uses innovation as the basis of its identity, reputation, and brand differentiation
(Hirschhorn, Noble & Rankin, 2001).. With an intensive competition expected now and in the future
in the technological industry, Apple continues to spend significantly higher budgets on research
and development as compared to its peers in the same industry. This is done with the realization
that the technology consumers are better informed due to significantly higher levels of
educational attainment and access to and use of social media tools and platforms. In social media
tools and platforms, people can coalesce against or for a company in the conversations.
For any organization, including Apple Inc. its competitive advantage as of today is based
on its ability to innovate new technological products as well as develop or optimize its processes.
These processes are the routines that are routed in the various activities that the company does.
They must be hard to imitate or copy for its competitor. Such may include a strong brand image,
patents, copyrights, customer relationship skills and suppliers (Allee, 2008). These makeup
distinctive capabilities which are among the basis of the sustainable competitive advantage that
the company must use. Apple Inc. is a multinational that is located in Cupertino, California of
the United States. This company is specialized in designing as well as developing personal
computers, electronic devices including iPads and MP3 players and software products. Among

4. INTERNAL AND EXTERNAL ENVIRONMENTS OF APPLE INC. 4

Apple’s most popular electronic devices include the iPhone, iPod, iMac, and iPad. Apple Inc.
was established in 1976 and has been in the forefront in innovating new electronic products.
Apple’s success story is typified by the more than ten percent market that it controls of
the personal computers in the world. Additionally, the company now sells more digital music
copies than any other company in the world. Recently, the company’s tablets and smartphones
accounted for approximately twelve percent of the handset market in the globe. Despite the
success that the company has experienced, the company has had numerous instances of failure in
its performance. This is typified by the fact that even though the company introduced innovative
devices such as personal computers that have been successful over the years, it has also struggled
to hold to competition in the computing market (Yoffie, David & Penelope, 2012). The company
started as an inventive computing products’ manufacturer but now has transformed into a
consumer electronic company. Currently, the company has about nine products and seven
services sold in more than 378 retail stores located across the world.
The Apple Inc. success story began when Steve Jobs and Steve Wozniak assembled the
first simple computer machine. The two founders were then aged sixteen and twenty-one years
respectively and were college dropouts. They developed a strong friendship founded on their
passion for computers, great admiration, understanding, and respect for one another (Yoffie,
David & Penelope Rossano, 2012). Since they sold the first Apple computer machines, they went
on to create a successful company which went public in 1980. The company continues to be
successful in the market because it understands what a consumer wants even before they know
what they need. Apple's products are designed with a unique creative innovation as well as
design yet they are stylish, affordable, and user-friendly. Apple’s products are a unique brand

5. INTERNAL AND EXTERNAL ENVIRONMENTS OF APPLE INC. 5

that is easily recognizable in the society and thus the company outperforms its peers in the
current business world even in intense competition.
Apple Inc.’s vision as outlined on its website is to be committed to ensuring that students,
creative professionals, consumers, and educators have the best experience as they interact with
personal computing devices (Schmitt, 2010). This is done through its innovative products
including software, hardware, and the Internet offerings. The Company’s mission is designing
the personal computing devices, Macs, along with iLife, OS X, professional software, and
iWork. It also aims at introducing the digital music through the iTunes online digital music store.
Additionally, the company aims at reinventing the mobile phone experience through its
revolutionary App Store and iPhone. Apple Inc.’s values include that the company exists in the
world to manufacture great products, it believes in the simple but not the complex and that it
only participates in markets that it will make the greatest contribution (Meyer & Schwager,
2007). Also, the company does not settle on things that are not excellent.
The consumer electronic industry where Apple Inc. now operates and include the
electronic appliances which are frequently used by people for entertainment, communication and
office purposes. The technological segment where the company operates is what influences
Apple Inc.’s success. The current technological environment must provide consumers with
cheaper, faster, and better electronic products. This has the implication that innovation in the
technological industry and specifically in the consumer electronics is fierce each year. This is in
addition to the current trend where the market for the personal computers is steadily declining
across the world. However, the tablet market has been on the expansion showing the significant
changes taking place in the consumer electronic demand. Consumers now prefer tablets and

6. INTERNAL AND EXTERNAL ENVIRONMENTS OF APPLE INC. 6

smartphones to other devices. The competition in the consumer electronic market, the company
is experiencing a new and real threat from new products from its competitors such as Acer and
ASUS. This has led to less demand for Apple products. ASUS have started to unveil new mini
notebooks which have proved to be successful in the high-end smartphone and tablet market.
This implies that Apple must keep up with new technological changes if it must be successful
because Apple may be left behind by its competitors (Kapferer, 2012). Technological innovation
is popular, and this is a key factor that companies use to create a competitive edge.
On the internal environment that gives Apple Inc.’s strength is its merchandise
differentiation. Ever since the early days when Apple Inc.’s technological products were
introduced into the market, the company has continued to be distinguished itself from other
technological brands in the world. This is a factor that the company capitalizes on when it wants
to sell its products. For instance, Apple’s operating system has distinguished itself as a strong
system as compared to its main rival by Microsoft since it is not susceptible to espionage and
bugs invasion on its system (Fitzsimons, Chartrand & Fitzsimons, 2008). Additionally, when its
competitor namely Microsoft is faced with challenges, its market is enlarged. Apple’s brand is
reputable and easily identifiable by the customers all over the world. To this end, when the
company is introducing a new product, they only have to update the customers of the brand.
Apple Inc.’s products obtained their business identity as high-quality products that were fun and
creative (Brown & Wyatt, 2015).
In its business model, Apple deals with both hardware and software development. When
its employees whom it considers as its greatest assets make proposals, they are not dismissed.
Rather, they are encouraged because the company understands that it is the employees who

7. INTERNAL AND EXTERNAL ENVIRONMENTS OF APPLE INC. 7

contribute to its success. Additionally, Apple operates excellently because it has better
management practices for its computer manufacturing and software (Johnson, Li, Phan, Singer,
& Trinh, 2012). This means that the company can compete well with other companies. The
company has only to regulate its computer hardware and software designs so that it conforms to
its operational applications and artistic as the customers would want.
On the external environment, Apple Inc. acknowledges that the socio-cultural context
that it operates in plays an essential role on whether it generates profits or losses. Therefore, the
company ensures that it adapts to the various cultures that it has operations in across the world.
The socio-cultural context of the company is essential in enhancing or restricting the ability of a
company to make profits in the international segment (Hess & Coe, 2006). Today, Apple Inc.
must make significant changes in such markets as in Asia and Africa where 3G as well as 4G
mobile networks are not yet popular. This means that its tablets and smartphones that operate on
these networks cannot be effectively sold in such markets. In African and Asian markets,
customers prefer to use cash for purchase transactions rather than credit cards. This has the
implications that most retailers do not accept credit card payments as the customers will prefer
seeing the product that they must buy. This is against the dominant trend for markets such as
Europe and America where most customers use credit cards and even book Apple Inc.’s products
even before they are released. Moreover, it should be noted that most Apple products are highly
priced and therefore they are not ideal for the Asian and African markets. This is typified by the
fact that Apple tends to have a slightly lower market size in these regions as compared to its
competitors that it outdoes in other regions such as Europe and America. Apple charges a
premium price for its computing devices and devices (Nonala & Kenney, 1991). In order that the
company becomes more competitive in new cultures, it is imperative that its executive

8. INTERNAL AND EXTERNAL ENVIRONMENTS OF APPLE INC. 8

management analyzes the various business customers and customers when it is developing its
strategy for its core products in new markets (Woodruff, 1997). This is because the company
must ensure that it is competitive by standing out in a market. Its business strategy must fit in the
socio-economic and culture of the target market (Kapferer, 2012).
Apple’s products are targeted at consumers who are either in the middle or upper-class.
These are people who may be willing to pay a premium price for better user experiences with
computing devices and products. They are desire unique products that are fun to work and
interact with. To satisfy this group, the company must have entry-level tools and devices that fit
this profile of users because, in the technological industry (Peak, Guynes & Kroon, 2005), there
is a lot of competition. However, the company must also ensure that it develops other products
which appeal to a wider and general population. These include iTunes and iPods which target the
music enthusiasts. Other people that the company targets are professionals through its Mac
tablets and iPhones. The reputation of Apple is to target new consumers in a highly competitive
technological world while retaining the current customers. This it does among customers
belonging to all demographic characteristics.
Given the various opportunities and threats that the internal and the external environment
presents to Apple Inc., it is imperative that the company keeps on focusing on the differentiated
lifestyle branding (Beckett-Camarata, Camarata & Barker, 1998). Since the company has a
reputation that is standing as compared to its competitors such as HP and Dell, the company
must continue to advertise and market its products properly to current and potential customers
effectively. The company must also effectively and efficiently manage its internal resources
better so that the company can develop innovative user interfaces for its products (Hirschhorn,

9. INTERNAL AND EXTERNAL ENVIRONMENTS OF APPLE INC. 9

Noble & Rankin, 2001). The new user interfaces must be easy to use as well as intuitive. It is also
imperative that the company continued to diversify its electronic products portfolio since the
technological industry where it operates is now filled with consumers and competitors. This
means that there are is an intense competition that will ultimately affect its bottom line.

10. INTERNAL AND EXTERNAL ENVIRONMENTS OF APPLE INC. 10

References
Allee, V. (2008). Value network analysis and value conversion of tangible and intangible assets. Journal
of intellectual capital, 9(1), 5-24.
Ancona, D. (2005). Leadership in an Age of Uncertainty. Managing for the future: organizational
behavior and processes (Module 14). 3rd ed. Mason: South-Western College Publishing.
Beckett-Camarata, E. J., Camarata, M. R., & Barker, R. T. (1998). Integrating internal and
external customer relationships through relationship management: A strategic response to
a changing global environment. Journal of Business Research, 41(1), 71-81.
Bertolucci, J. (2009). Reliability report card: Grading tech’s biggest brands. PC World, 27(2), 82.
Brown, T., & Wyatt, J. (2015). Design thinking for social innovation. Annual Review of Policy Design,
3(1), 1-10.
Fitzsimons, G. M., Chartrand, T. L., & Fitzsimons, G. J. (2008). Automatic effects of brand
exposure on motivated behavior: how apple makes you “think different”. Journal of
consumer research, 35(1), 21-35.
Gronn, P. (2002). Distributed leadership as a unit of analysis. The leadership quarterly, 13(4), 423-451.
Hess, M., & Coe, N. M. (2006). Making connections: global production networks, standards, and
embeddedness in the mobile-telecommunications industry. Environment and Planning A,
38(7), 1205-1227.
Hirschhorn, L., Noble, P., & Rankin, T. (2001). Sociotechnical systems in an age of mass customization.
Journal of Engineering and Technology Management, 18(3), 241-252.
Johnson, K., Li, Y., Phan, H., Singer, J., & Trinh, H. (2012). The Innovative Success that is
Apple, Inc

11. INTERNAL AND EXTERNAL ENVIRONMENTS OF APPLE INC. 11

Kapferer, J. N. (2012). The new strategic brand management: Advanced insights and strategic
thinking. Kogan page publishers.
Meyer, C., & Schwager, A. (2007). Customer Experience. Harvard business review, 1-11.
Nonala, I., & Kenney, M. (1991). Towards a new theory of innovation management: A case study
comparing Canon, Inc. and Apple Computer, Inc. Journal of Engineering and Technology
Management, 8(1), 67-83.
Peak, D., Guynes, C. S., & Kroon, V. (2005). Information technology alignment planning—a
case study. Information & Management, 42(5), 635-649.
Yoffie, David B., & Penelope Rossano. (2012). Apple, Inc., 2012. Harvard University.
www.harvard.edu.
Schmitt, B. H. (2010). Customer experience management: A revolutionary approach to
connecting with your customers. John Wiley & Sons.
Woodruff, R. B. (1997). Customer value: the next source for competitive advantage. Journal of
the academy of marketing science, 25(2), 139-153.