The industry and the publicly traded corporation within that industry that I have chosen to write about in this term paper is Apple Inc. In order to evaluate the segments of the general environment, forces of competition that are the most significant for the corporation, the external threats affecting this enterprise and the opportunities available to the corporation and the greatest strengths and most major weaknesses of the company, the Supplier Code of Apple and a strategic analysis of Apple Computer Inc was examined.
The Supplier Code of Apple is believed to be one of the most scrupulous and the toughest among the industrial electronics, as the company holds a strict policy towards its suppliers. As the Supplier Code shows, by 2014 Apple went deeper into the supply chain in order to disclose and correct problems that cannot be fixed by action plans and audits. While exploring these issues, the company focuses on training and educational programs in order to bring real changes into the supply chain.
How general environment segments affect Apple and the industry in which it operates
While choosing from the primary sectors, the two segments that impact the Apple Inc. the most are the sociocultural segment and economic segment. In an economic segment, the asset rank of the personal computer turns the struggle for market interest to be more severe and excessive. The entire computing commerce has been entering the period time era where nothing but the determined and tenacious continues to live. However, the wide popularity of the personal minicomputer with the probable income is an attraction to those competitors with the statistic of personal computers in use growing from five million in the 1980s to sixty-five million in the 1990s.
In the socio-cultural segment, the personal computers have entered the digital era; furthermore, the computers are growing into more and more indispensable feature in any company, in the administrative and scholastic associations, and learning sector such as seminaries, colleges and institutes in particular. The requests from these representatives of the educational sector are constantly growing. However, regrettably, Apple’s preeminence in the retail has been outdistanced to Dell through the whole of the 1990s.
When Apple had reclaimed its established extent of an asset, it appeared to be a stimulant for the readjustment and reset. Another impact on the personal computer retail is the development of digital generations that are not only an actual but a promising compelling customer in the respective retail market. The next assessment based on the socio-cultural examination is the fact that while the community is developing, the population, and the young generation, in particular, would prefer to form alternatives that are contemplated to explicit their eccentricity and their distinction from the others. The representatives of the young generation would choose the production that is designated to follow them anywhere they move.
This tendency is encouraging the company and its adversaries to chase the additional financial worth for the customer-focused maintenance and custom-built production, which appear to be accurately the beneficial fields of Apple Inc. Its custom-made servers are pointing at both exclusive and cheap customers, proposing a wide variety of colors and elegantly arranging their exclusive and dignified production in order to hold the attention of the consumers, who are attentive to the aesthetic determinants.
How well Apple has addressed the two forces of competition in the recent past
The two forces of competition that I have chosen are industry rivalry and bargaining power of buyers.
The concentration of contest between the contending companies is very high. While fractionizing the complete retail that Apple has entered, we are able to distinguish that there are encounters in all places of this competing setting.
In the hardware field, just over 6 percent of the worldwide desktop computer market and below 10 percent of the portable computer market was belonging to Apple in the year 2000. Dell, HP and Compaq, IBM, Gateway not standers-by in this running while Apple‘s market share for the both products decreased by half in the period between 1995 to 2010. While in the software field, the heavyweights are Microsoft and Sun. At the same time, in the consumer electronic battlefield, the iPod is facing an inevitably fierce fight with Hard Disk Walkman and MP3 players, portable multimedia players, Mini Disk and Hi-MD players and even the mobile phones with a certain multimedia functions, which are constituting the substitutions group. (Jinjin, 2013, p. 96)
The bargaining power of buyers appears to be immense. The primary target customers of the company are the scholarly institutes, institutions of higher education and academies in the education field, and market buyers. Apple’s dominating status in the education field, unfortunately, has been misplaced by Dell Company. Attempting to retain its position in fifteen percent of the retail in this field, Apple has to convince those companies to obtain the efficiency of the Apple production and then produce the ordering scheme.
In extension, the acquiring of the production by the organizations in governmental and the educational field appears to be largely corresponding to Apple’s transactions, so their bargaining power is highly immense. Apple ought to commit its energies to organizing a tight connection with competing companies from top to bottom in order to retrieve the market share in this area of activity. The separate customers at the moment tend to gain thorough and complete information about the production they are buying. For the most part, the customers want to find much better utility and the decreased financial value.
However, they usually don’t have the capacity to affect the whole financial system straight to particular magnitude. As a result, the bargaining power of buyers has been decreasing slowly. On the contrary, the customers possess a lot of alternative trademarks in the hardware and software area; moreover, they would appreciate a reduced alteration of price when they determine to select another inclination.
What Apple might do to improve its ability to address the forces in the near future
Attempting to retain its position in fifteen percent of the retail in this field, Apple has to convince those companies to obtain the efficiency of the Apple production and then produce the ordering scheme. In extension, the acquiring of the production by the organizations in governmental and the educational field appears to be largely corresponding to Apple’s transactions, so their bargaining power is highly immense. Apple ought to commit its energies to organizing a tight connection with competing companies from top to bottom in order to retrieve the market share in this area of activity.
The separate customers at the moment tend to gain thorough and complete information about the production they are buying. For the most part, the customers want to find much better utility and the decreased financial value. However, they usually don’t have the capacity to affect the whole financial system straight to particular magnitude. As a result, the bargaining power of buyers has been decreasing slowly. On the contrary, the customers possess a lot of alternative trademarks in the hardware and software area; moreover, they would appreciate a reduced alteration of price when they determine to select another inclination.
The external threats affecting Apple and the opportunities available to the corporation
The number of personal computers in use grew from 5.5 million in 1982 to 65 million in 1992. The popularization of Computer guarantees increasing demands. Computing technology is rapidly evolving. Technology evolution brings in the innovation and upgrades opportunities. Customer-focused services strategy meets the demands of current socio-culture. From May 2011 to now, approximately 50 company controlled Apple retail stores are in operation, most of which are located in high-traffic locations such as shopping malls and urban shopping districts. (Jinjin, 2013, p. 100)
The most displayed opportunity for the Apple Company is that PC is growing into an increasingly popular device; as a result, there always is an expanding consumer request, not only from particular customers but also from administrative and scholarly institutions. Furthermore, the appearance of advanced electronics provides an advantageous opportunity to enhance the already existent production and introduce several innovations.
The commodity status of personal computer makes the battle for market share is all the more intense. An emergence of substitute products constitutes a threat in the consumer electronic market. Apple’s dominance in the education market throughout the 1990s is being lost to Dell. Worldwide, Apple fares worse. It is in ninth place with 2.4 percent market shares. The most alarming fact is that between 2005 and 2010, apple’s share of the market for both products decreased by half. (Jinjin, 2013, p. 100)
The most compelling threat to the company is the fact that the possession rank of PC causes the struggle for retail share to be acuter. Moreover, Apple is enduring the damage caused by the loss of the market shares and dominant status. Furthermore, the development of alternative production establishes a compelling threat to the electronic customer market.
Apple’s greatest strengths and most significant weaknesses
The two main strengths of the company are the philosophy of thinking differently and constant need towards changes, a well-handled and unified syndicate of supplies and arrangement of delivery, a service approach that is oriented on the clients, outstanding “Switcher” drive and the enormous influence of the label. These strengths ensure the current expansion and advancement of Apple in a prosperous way, along with attracting recent consumers from the competition.
The primary weakness of the company is the compatibility of their production, which encloses the software demand of the Apple Inc. by the quantity of hardware demand. Despite the fact that a lot of attempts have been made, the consumers still remain unsatisfied. Other compelling problems include an ongoing decreasing level of financial accomplishment. The company ought to strive for the efficiency and increasing financial outcome.
Apple’s resources, capabilities, and core competencies
Apple has been assessed as the most creative organization in the period between 2005 and 2008 due to the advancement of diverse production such as iPhone, iMac, and iPod. The manufacturing of music, video, and movie files assisted Apple in gaining beneficial, and invaluable recognition of the label: for example, in 2007 it has been was identified worldwide as the twenty-fourth most profitable brand.
“Core competencies are specific business abilities used to create a competitive advantage in the business environment. A competitive advantage is the ability to complete business functions, produce customer products or provide more value to consumers better than other companies” (Hawthorne, 2014, para. 4).
The core competencies of the company are its ingenious conceptions and electronics founded the on operating system. The most recent line of the company’s production contains iPhones, iPad, and iPod with more innovative features and colors.
The core competencies of Apple are potent and vigorous. “It’s not enough to set high standards. We must work every day to make sure they’re upheld” (Apple Inc, 2015, para. 10). It is one of the main mottos of Apple, as development and accountability are central intentions not only about the company but also the suppliers. Furthermore, Supplier Code of Conduct constantly changes in order to keep the bar high and to ensure the documents illustrate the strongest principles of safety, human rights, and environmental liability. The documents contain near 100 pages of extensive requirements in more than 20 areas, some of which are mentioned above.
It could be very confusing to duplicate the production of the company; thus, the Apple Inc. has an obvious advantage over its rivals. It possesses a sealed proprietary scheme that allows no escaping of its competence and its classified techniques. The main point of the empowering policy is that all employees must be treated with respect and dignity and it is the worker’s moral right to work in an ethical environment. Precisely for this reason, since 2007 6.2 million employees were trained; 2.3 million – namely in 2014 in order to perceive the Code of Conduct and local regulations.
On the contrary, the organization is very dependable in its portfolio production advancement. If any organization deflect its commerce en masse or make an attempt of diversifying too much in the production, the possibilities of losing its core competency appear.
Apple’s policy is quite strong towards the environment; thus, environmental responsibility is one of the most strongly developed directions of the company’s operation. The supplier is obliged to advance, enforce and sustain business practices that are environmentally responsible.
The company would like to know that suppliers, whether all over the world or within home country, are exploiting processes of manufacturing that are ecologically friendly and reliable. Therefore, Apple is providing help in order to make the companies of suppliers more resource profitable; moreover, focused programs that preserve resources of the planet are enforced.
Apple’s value chain
Apple is commercially a very substantial organization. As a result, it is attainable for the company to donate a big amount of monetary expenses to its exceedingly skillful members of the staff in research and advancement section of the organization in order to advance such devices that are extremely high-tech. These devices should be ingenious in its origin, agile in its presentation, possess the ability to store a big amount of information and have the fast processing velocity.
Within the frames of the Clean Water Program, in which Apple takes an active part, several improvements happened. Firstly, the Program was extended in order to comprise nearly 50 percent of overall water disengagement for the 200 most loyal suppliers. Secondly, Apple provided help for thirteen companies in saving fresh water in the overall amount of half billion gallons, to be precise. Furthermore, Apple resolved violation issues in more than 50 sites and deteriorated them in the IPE collection of data.
In conclusion, it could be said the objectives of the term paper have been achieved, and the necessary questions regarding the external and internal environments of the Apple Inc. were observed.
References
Apple Inc. (2015). Apple Supplier Code of Conduct. Web.
Hawthorne, M. (2014). List of core competencies to run a business. Web.
Jinjin, T. (2013). A strategic analysis of Apple computer Inc. & recommendations for the future direction. Management Science and Engineering, 7(2), 94-103. Web.