Unit 32: Business Strategy

Contents
Introduction...................................................................................................................................................3

LO1 Analyze the impact and influence that the macro environment has on an organization and its
business strategies.........................................................................................................................................3

Apple Inc. Vision/Mission.............................................................................................................................3

Apple Inc. Aims and objectives.....................................................................................................................3

Macro-environmental analysis of Apple iPad...............................................................................................4

PESTLE Analysis..........................................................................................................................................5

Ansoff’s matrix..............................................................................................................................................7

SWOT analysis..............................................................................................................................................8

LO2 Assess an organization’s internal environment and capabilities........................................10

Strategic capabilities.....................................................................................................................10
Value Chain Analysis of Apple’s iPad business unit..................................................................................10

McKinsey’s 7S............................................................................................................................................11

McKinsey 7S Analysis for Apple Inc..........................................................................................................11

Benchmarking capabilities..........................................................................................................................12

LO3 Evaluate and apply the outcomes of an analysis using Porter’s Five Forces model to a given
market sector.....................................................................................................................................13

Strategic group mapping...............................................................................................................13

Porter’s five forces model.............................................................................................................13

The threat of new entrants...........................................................................................................................14

Threat of substitutes....................................................................................................................................14

Bargaining power of suppliers.....................................................................................................................14

Bargaining power of buyers........................................................................................................................15

Competitive rivalry......................................................................................................................................15
LO4 Apply models, theories and concepts to assist with the understanding and interpretation of
strategic directions available to Apple..............................................................................................16

Porter’s generic strategies.............................................................................................................16

Apple’s Generic Strategy (Porter’s Model).................................................................................................16

Conclusion........................................................................................................................................17

References.........................................................................................................................................19
Introduction

Apple is a well-known brand not just in the United States but also in the rest of the world. Apple
products are popular in many other countries. Apple generates a major amount of its total income
through the sale of computer software and hardware. This includes the sale of products such as
personal computers, laptops, smartphones, and a wide range of other mobile devices. Apple is
also responsible for the creation and distribution of its own software. The Macintosh trademark
is owned by Apple Inc., and it is used to identify the company's several well-known brands of
computer hardware. The year 1976 marks the birth of Apple, which was founded by Steve Jobs.
As a direct and immediate result of this, Apple approaches each each product as its very own
self-contained operational business unit. The Apple iPad, specifically, is being examined in great
detail as part of this particular study endeavour. This study includes a wide range of issues, some
of which include an examination of the competitive position of the firm, the external
environment in which it works, and the value addition it contributes to the business plan that it
has produced. When gathering information for this research, the market in the United Kingdom
was one of the key areas of concentration.

LO1 Analyze the impact and influence that the macro environment has on an organization
and its business strategies

Apple Inc. Vision/Mission

The company's goals and methods of achieving them are referred to as the mission. In order to
maximise pricing power, Apple Inc. aims to provide an exceptional experience and increased
goods with features that add value to their products, therefore increasing sales, profit, and
revenue (Rancourt, 2018).

Apple Inc. Aims and objectives

A company's aims or targets are referred to as its position, that is where they want to get to.
Apple Inc.'s mission is to be the world's leading technology company by providing high-quality
goods and services and expanding its reach throughout the globe's markets (Noddings, 2019).
Measured, concealed, and publicly announced attainable goals are the means by which a firm
may achieve its goal. Apple Inc.'s primary goals are to potentially boost, profit margins, and
reduce costs across the board.

Macro-environmental analysis of Apple iPad

Stakeholder matrix

Stakeholders are the people who have a stake in the company's activity. People who work for
Apple, consumers and investors are among the company's most important stakeholders. Apple is
excellent at keeping in touch with all of its constituents (Polonsky, 2018). The firm is able to create
a significant strategic plan for its organisation after doing a thorough stakeholder analysis.
Stakeholder Significance and Contribution Matrix is the most used methodology for analysing
stakeholders.

Diagram: Stakeholder matrix Source: (Polonsky, 2018)

As seen in the picture above, A, B, and C are boxes that indicate the primary stakeholders of an
organisation.

PESTLE Analysis

The term PESTLE refers to politics, economics, socio-culture, technology, legalities and
environment. These are the most important factors in a company's ability to adapt to changing
market conditions. The following is a PESTLE study of Apple Inc:

Political and legal drivers

The political climate at the national level has a significant bearing on the range and kind of
economic activity that takes place inside the country. It is possible for the operations of a
company to either profit from the impact of politics or find themselves in peril as a result of
political pressures (Euverink, 2019). Residents of the United Kingdom, who together make up
the overwhelming majority of the country's customers, have taken a disproportionately large
amount of the economic toll. Consumers are discouraged from making purchases and spending
their own money, which they have worked hard to earn, when the value-added tax (VAT) is
raised to a higher rate. This is information that will likely have a negative impact on Apple's
financial performance.

Economic factors

As a result of this financial crisis, UK consumers have lost their asset value. People in the United
Kingdom were just purchasing the necessities of existence (Euverink, 2019). Consumers steered
clear of items deemed unnecessary or too expensiveFor Apple, this position is not good. Because
of this, there is a potential that the current condition of international economic affairs will
improve and commerce will return to its previous marketing state once again.

Socio-cultural factors

The economic, political, and cultural setting in which businesses operate is, for the most part,
untouched by the activities of those enterprises. Isomorphism between the goods and services
offered by a company and the society and culture of the market they are trying to break into is
essential to the enterprise's chances of becoming profitable (Kireeti, 2017). In addition, there is a
greater likelihood that people in the United Kingdom will purchase innovative and cutting-edge
items. As a result, there is a reasonable possibility of the iPad being profitable for Apple in the
current market situation.

Technology
The United Kingdom (UK) is home to a sizable population that makes significant use of modern
technology in the here and now. It was vital to make use of the most recent and cutting-edge
technology in order to do all that needed to be done, from identifying the raw ingredients to
delivering the iPad. Because of this, it was feasible to successfully complete the project. Both
Apple and Google have been on public as claiming that they would want to improve their
revenue by using various internet marketing strategies at some point in the future.

Legal factors

Businesses operating under government supervision and regulation must abide by a number of
legal considerations (Dubuisson, 2017). Provisions, product failures, business licensing
protection, employee protections, and anti-discrimination problems are just some of the legal
concerns that need to be addressed. For all the money the company makes and all the goodwill it
has built up over the years, it's possible that Apple will be sued.

Environment

Apple macroenvironment analysis case studies should take electronic waste disposal into
account. Large amounts of e-waste from the company's discarded electronics are to blame for
this. CSR programmes urging Apple Inc. to improve waste collection should be examined as part
of this investigation. Apple's PESTEL research involves natural pollutants as an additional
environmental element. In contrast to e-waste recovery, the emphasis here is on the production
process.
Ansoff’s matrix

The Ansoff matrix was created by 'H. Igor Ansoff.' The following are the four strategies that are
used most often, as the chart depicts.

The key benefit of this technique is that it may help marketers improve sales and income.

Product Development:

Apple's primary method for expanding the company is to place a strong emphasis on the
development of new goods (Muller, 2018). In order for the company to increase both its sales and
its profits, it is essential for the company to have a product development strategy that places a focus
on the production and distribution of a diverse range of things that are appealing to the demographic
that the company is attempting to reach.

Market Penetration:

Apple's approach for breaking into the market is one that might be described as rather
aggressive. The strategy of increasing sales of one's competitors' goods in order to capture a
greater share of the market is referred to as "market penetration." Apple raises consumers'
knowledge of its goods and services via the usage of a variety of websites (Vasylieva and James,
Jr., 2021). The spike in consumer interest may be attributed, in part, to Apple's marketing of its
newly released devices..

Market Development:

Apple has the most successful strategy in the industry when it comes to entering new areas with
its products and services (Ridley, 2020). It has been in existence for a very long time and has a
demonstrated history of producing things that have a significant impact on the market. Always
looking for new people to serve as customers. It employs the advertising techniques that research
has proved to be the most effective.

Diversification

When compared to its competitors in this market, Apple has the most varied consumer base of
any company in this sector. It is a never-ending source of fresh ideas and cutting-edge equipment
for their service, which is why it is so important.

SWOT analysis

A company's SWOT analysis looks at its strengths, weaknesses, opportunities, and threats. The
major benefit of this analytical methodology is that it provides a clear picture of the business's
external environment. However, the model's main shortcoming is that it does not reveal the
company's internal environment.
Strengths

 Apple's innovative and exciting products are all well amongst consumers.
 For its mobility, the iPad is a huge hit.
 Anyone may enjoy relaxing film and television content through the iPad thanks to the device's
curved screen (Budnikas, 2017).
 This is a high-end electronic device that everybody may enjoy.
 A built-in assistant named Siri is available on the iPad, and she is able to do a wide range of
tasks using voice commands.
.

Weaknesses

 Although the iPad has a slew of appealing features, it is not without its flaws. Consumers
have a hard time charging their iPads because of this. iPad charging times have been
criticised as being too long despite the addition of several new features and improvements to
the operating system (Thao and Tsanthaiwo, 2017).

 The iPad mini range of products hasn't seen any updates in a long time, which is another shortcoming
of the iPad. Purchasers of the iPad mini must also purchase the previous generation. While the iPad
mini has IOS 9 on it, the iPad pro has IOS 11 on it.

 Heavy tasks like chroma-keying and navigation are not possible on the iPad mini. Light tasks like
talking, relaxing music, and so on can be done on it.

Opportunities
Apple claims that this tablet has a greater capability for computing than a typical personal
computer. Despite the fact that Apple has said that the iPad is not a laptop, the corporation has
promoted the idea that the iPad's processing capability is superior to that of the majority of
laptops. On the other hand, kids would prefer to utilise a portable device like an iPad rather than
a cumbersome computer. iPads may be synchronised with Bluetooth keyboards, allowing users
to jot down notes and write on the device (Thao and Tsanthaiwo, 2017). Apple is also targeting
clients in the medical business when marketing the iPad in this sector. It is possible to construct a
 very compact computer using nothing more than an iPad and a wireless keyboard as the only
components. Additionally, it mimics the look of a traditional pencil, which helps save time for
those who work in fields such as architecture and writing. There are pads that are designed for
students to use, and there are pads that are designed for instructors to use so that they may show
their students examples and images that are associated with the subjects they are learning..
.

Threats
A fierce rivalry exists between Apple and its competitors. Other manufacturers of tablets will keep their
eyes on Apple's progress and strive to enhance their own products. Apple's iPad faces price competition as
well. If you don't want to buy an iPad, there are several affordable alternatives. Consequently, buyers on a
tighter budget are continuously on the hunt for more affordable options. It's worth noting that the pricing of
pads varies according to their storage capacity, while other firms provide larger sizes and more storage
capacity as alternatives to the iPad. The iPad is in serious danger from this. iPads aren't going to be popular
with people who are looking for devices that charge quickly.

LO2 Assess an organization’s internal environment and capabilities

Strategic capabilities

Value Chain Analysis of Apple’s iPad business unit

A company develops an idea. A corporation must focus on internal duties to accomplish this. A
company's value chain shows how inputs are turned into outputs (Ankitha, 2018). Apple is one
of today's most successful companies. Apple-I began it everything, and today it has a unique
product range and loyal fans. Apple used value chain analysis to succeed (Yamanaka, 2021).
Apple uses value chain analysis to identify core and support operations that provide value to its
final product. The business assesses these activities so they may reduce costs or increase
differentiation. This essay examines Apple's whole value chain.

Primary activities
The United States of America is the location of Apple's main office and headquarters. Apple now
operates 19 retail stores across the globe, all of which are wholly owned and managed by Apple.
They have more than 3,000 staff members working in a variety of places throughout the globe
(Simko, 2019). Those who hold higher-ranking posts are liable for the management of their
subordinates, while those who hold lower-ranking positions are liable for the management of
their superiors. Apple's research and development team ensures that the corporation stays at the
forefront of technical innovation by keeping Apple at the forefront of technological
improvement. In order for businesses to keep their position as the leaders of their respective
markets, they will need to give up some of the technical qualities that distinguish them. Apple,
on the other hand, exercises complete control over the manufacturing process and commits the
required financial resources to ensure its success.

McKinsey’s 7S

It is used to examine the seven most critical internal elements of a company. They are direction,
organisation, process, aesthetics, personnel, expertise, and common interests of all of these
things put together.

As a result of this strategy, business owners are able to have a better grasp on internal challenges
and make more informed choices that benefit their company (Awino, 2018). However, the
model's fundamental drawback is that it solely examines internal problems.

McKinsey 7S Analysis for Apple Inc

Source: (Awino, 2018)

VRIO/VRIN framework

VRIO/VRIN, the terms "value," "rareness," "imitability," and "organisation" all refer to the same
thing. Corporations may get long-term benefits in the economy if all of these areas are met.

Value

Apple's major features include its high-quality goods, efficiency in manufacturing, repeat
business, and development, which have kept the company safe from external challenges and
helped it become a global leader.

Rarity

Apple's goods include a number of unique characteristics that aren't seen in other firms (Kim,
2019). Other items on the market don't have Apple's functionality.

Imitability

If any other firm accidentally deletes Apple's goods, it'll require a lot of money and resources.

Organization

Apple is a well-known brand across the world. Apple's organisational structure and organization
assist them to reach their goals and ambitions.

Benchmarking capabilities

Differentiation was a major focus for Apple as it sought to define what skills and knowledge.
The debut of the second-generation iPad is one of several initiatives for differentiation (Kim,
2019). For the second generation iPad, Apple used this method to make it lighter and smaller.
Thus, Apple's sales and profits rose as a result of this item's increasing appeal to buyers.
LO3 Evaluate and apply the outcomes of an analysis using Porter’s Five
Forces model to a given market sector

Strategic group mapping

In strategic management, the phrase "strategic group mapping" refers to the notion of mapping
the many organisations in a firm, which incorporates the same frameworks and strategy
configurations (Jim, 2022). Advertising is only a few example of strategic divisions that mobile
manufacturing companies might fall under. Nevertheless, competitive strategy mapping may also
be used to demonstrate the competitive positions that opposing organisations have defeated in
business. Apple Inc. is a household name all across the globe. Apple's current strategic stance is
summarised in the following table:

Figure: Strategic positioning of Apple

Porter’s five forces model

If one wants to understand the competitive forces that shape every company, one can use Porter's
Five Forces model. This model analyses or defines the five important competitive forces (such as
threats from new entrants or substitute products) that outline every company and help to control
its strengths as well as its weaknesses (Dobrivojević, 2018). An effective way of analysing a
company's competitiveness is using Porter's five forces model.
 Figure: Porter’s Five Forces model

Source:

The threat of new entrants

Apple is not just a well-known brand, but also the name of a global company that specialises in
technological products. Apple Computer, Inc. Organizations that are built on technology and
have been around for a considerable amount of time face increased levels of competition in the
business world from companies that have just entered the market. This specific economic sector
has a smaller number of strict laws and other obstacles that are tough to overcome for new
entrants as compared to other economic sectors (Dobrivojević, 2018). This is because this
particular economic sector is less competitive. When there is already a great deal of rivalry in a
given industry, the introduction of more firms that provide similar products or services might
reduce overall profitability. At first glance, it could seem that there is nothing about Apple that
might really attract the interest of someone who is just starting off.
Threat of substitutes

The ease with which one company may steer its customers away from the products and services
supplied by another company that is in direct rivalry with that company is referred to as "the risk
of substitutes," and it is the subject of the phrase "the danger of substitutes." Additionally,
Microsoft and Google, with their own Android operating systems, are major rivals for the iPad
market niche held by Apple (Potter, 2018).
Bargaining power of suppliers

In order for a company to turn a profit, it must first obtain the essential raw materials and then
work to nurture relationships not just with its customers but also with the vendors who provide it
with goods and services. The tablet computer market is very competitive, and since raw materials
are so easily accessible, suppliers have a strong position of negotiating strength in comparison to
producers. Apple's iPad business gets its most important components from third-party
manufacturers, and those manufacturers have the ability to influence how Apple conducts its
daily operations. The result is the formation of a business partnership between the two firms that
is mutually beneficial to everybody involved.

Bargaining power of buyers

The buyers' negotiating leverage force examines the influence of consumers on a company's
price and customer satisfaction policies. With the advent of low-cost tablet PCs like the
Microsoft Surface and Samsung Galaxy Tab, users now have more negotiating leverage with
manufacturers than they had with the iPad (Adilov and Alexander, 2018). Customers have the
flexibility to quickly move away from items of high quality but the low price.

Competitive rivalry

iPads made by Apple are very popular, but they aren't the only tablets on the market today.
Apple Inc. is in a particularly precarious position when it comes to establishing a name for itself
in the international arena as a result of the fact that it sells both computer software and hardware
as a result of the fact that it sells both types of products. This is due to the fact that it sells both
types of products. In addition to this, over the course of the last several years, Apple's percentage
of the market share for smartphones has been rapidly decreasing. However, given the intense
level of competition, it is very essential for it to maximise the return on its investments in tablet
phones, computer technology, and programming. This is because of the fact that tablet phones
are becoming more popular.
LO4 Apply models, theories and concepts to assist with the understanding
and interpretation of strategic directions available to Apple

Porter’s generic strategies

To assist a firm obtain a competitive edge, Porter's generic strategy model offers three major
strategic alternatives, such as premium pricing, distinction, and focus. Here is a visual
representation of Porter's generic tactics:

Figure: Porter Generic Strategies Source:

Apple’s Generic Strategy (Porter’s Model)

Apple Inc. has a strategy that places a primary emphasis on the wide distinction of its products.
This kind of generic marketing strategy places a major emphasis on the special qualities that set
apart a firm and the information technology products it sells from the products supplied by other
companies operating in the same industry as the company in question. Apple separates itself
from its competitors by adopting a more comprehensive approach that places a focus on wide-
ranging distinctions. In the field of information and communications technology, differentiating
elements include, among other things, excellent product design and customer service, in addition
to attractive branding. To put this another way, Apple's usual business approach is that it seeks to
differentiate itself from its rivals not via pricing, but rather by product design that appeals to
consumers and motivates them to make purchases of Apple products. A design such as this one
incorporates a wide range of cutting-edge features and capabilities, including, amongst a great
number of others, simplified device-to-device connection. Apple is unique as a result of this
approach taken in general, but despite this, the corporation is nevertheless effective in attracting
a wide range of customers to its products and services (Stratton, 2020). The firm has been
successful in seizing a significant share of the market because to the versatility of its offerings,
which enable them to cater to a wide variety of customer needs. For instance, Apple's MacBook
product line is intended to cater to the requirements of people in addition to those of businesses.
By utilising a generic strategy that focuses on broad differentiation, the company is able to keep
its status as a high-end technology provider while also keeping its competitive advantage in the
market, its leadership role, and its high position. These are all things that are possible thanks to
the company's continued success. Differentiation is Apple's primary approach. This is a way to
differentiate your goods from the offerings of your competitors. Mac, iPod, iTunes, and the
iPhone are the most well-known products from Apple. Despite their hefty price tags, all of these
goods are of the highest quality and are worth every penny they cost. Apple's competitive
advantage is mostly due to its superior technological capabilities. In terms of engineering and
functionality, Apple's devices are top-notch, but design and aesthetics are equally impressive.
Apple's iPhone and Mac computers are stunning to look at. Still, the fundamental technology is
what matters most. Apple's products have long been lauded for their superior quality. Aside from
computers, it also creates its own network services, macOS and iOS. Furthermore, it has
developed a full line of goods that are interoperable with each other. Apple laptops do not
support Windows operating systems. This company's goods, on the other hand, are unmatched in
terms of both technology and quality. Despite their hefty price tags, millions of people swear by
Apple's wares. Customers are prepared to pay the high costs since they can't get enough of its
items.

Conclusion

Apple has to set itself apart from its rivals in as many different ways as is humanly feasible so
that it may achieve a competitive advantage. Differentiating the company's products from those
of its competitors is critical if the business is going to realise its objective of growing its market
share via the use of newly developed technologies. Apple Inc.'s continued commercial success is
contingent on the company's capacity for driving technological advancement. When it comes to
gaining an edge in the market, a firm must make concerted efforts to expand into new sectors in
order to be successful. The majority of enterprises in less developed nations have a restricted
distribution network for the information technology products and services they produce,
therefore heeding this piece of advice is particularly important in such countries..
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