Apple Inc. specializes in the design, production and promotion of mobile communication and media devices which are primarily meant to assist professionals, entrepreneurs and government customers in performing their usual activities more efficiently (Yahoo Finance, 2016). As a multinational organization that operates in multiple markets, Apple is affected by numerous environmental factors.
What has the company done to adapt to its environment?
Apple’s success depends on its ability to keep developing unique and highly sophisticated products that are difficult to imitate. Consequently, the company invests heavily in R&D activities and enforces its intellectual property rights whenever a competitor threatens its solid market position. With a significant percentage of Apple’s sales coming from outside the United States, both global and local financial crises are likely to have a profound impact on the company’s profitability (Hasan, 2013, p. 2). Apple uses ad hoc financial instruments to mitigate the negative effects of adverse global and regional economic conditions (Apple, 2015).
It is also worth mentioning that young consumers in Apple’s established markets are not as emotionally attached to Apple products as older consumers and that ethical concerns about the company’s cooperation with certain controversial Chinese manufacturers has had a negative impact on its reputation. Apple has responded to these threats by implementing an effective CSR strategy and investing millions of dollars in marketing activities.
How does that company attempt to influence its environment?
Apple is primarily known for its highly innovative and creative approach to design. The company influences its environment by remaining faithful to its own operating system, which has been discouraging existing customers from switching to competing brands. Apple offers a wide range of services and products and has recently entered the financial sector. Despite operating in a remarkably competitive industry whose major players can easily duplicate its best-selling products, Apple manages to encourage consumers who already own an iPhone to get their laptops, mp3 players and other electronic devices from Apple by ensuring that their products are incompatible with other operating systems. Finally, in order to maintain its reputation intact and build brand awareness among younger consumers – who are not as emotionally attached to Apple as older consumers – the company has been investing in targeted marketing activities and has built a strong global distribution network. By showing constant dedication to quality and design, Apple has managed to roll out a series of products that have enhanced consumers’ loyalty to the brand.
Do you think the company has made good decisions? Why or why not?
By remaining faithful to its original values, Apple has succeeded in positioning itself as a global market leader. However, according to recent statistics, over 50% of people who purchase an iPhone have already owned an iPhone; 25% of people claim that they have bought Apple products because they knew someone who had an Apple product; of the many people who purchased more than one Apple product between 2010 and 2015, not even 30% believe that the iPhone is the best smartphone out there; a very small percentage of people claim that Apple products’ interface is the reason why they like Apple devices; finally, the majority of Mac users are older than 34. It follows that the company has been unable to attract younger consumers as effectively as its competitors have. Also, as a result of the growing saturation of the smartphone and computer markets, Apple has rolled out a number of new products which have not performed as well as they should have (e.g. its TV platform) due to its inability to find strong enough content partners. In order for Apple to prove that it is still capable of innovating and revolutionizing the IT industry, it will have to pay more attention to Big Data, IoT and artificial intelligence solutions that would boost its competitiveness.
- Apple (2015). Annual Report. Retrieved from http://investor.apple.com/secfiling.cfm?filingid=1193125-15-356351&cik=320193#D17062D10K_HTM_TOC17062_3
- Hasan, R. (2013). Apple Inc. – An Analysis: PESTEL analysis, Porter’s 5 Forces analysis, SWOT analysis, Comprehensive analysis of financial ratios, and Comprehensive analysis of share performance of Apple Inc. Munich, Germany: GRIN Verlag.
- Yahoo Finance (2016). Apple. Retrieved from https://finance.yahoo.com/quote/AAPL/profile?p=AAPL