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Introduction
The paper discusses the business strategies of Apple. With the help of various tools, the
paper analyzes the current and anticipated strategies of the company. In 1980 Apple went public
and by 1983 Apple had become the fastest growing company in history. Among Apple’s long list
of products include the iPad, iPhone, iPod, iTunes, Mac, PowerBook, and Power Mac. As of
May 2010 Apple had a gain of 1.8% at $222.12 billion (Apple Annual Report, 2011). With the
power of innovation, advanced technology, and high investment in Research and Development,
the company has outpaced competition thereby creating an edge of its competitors.
Mission, Vision and Stakeholders
Mission statement of Apple is “to produce high-quality, low cost, easy to use products
that incorporate high technology for the individual. We are proving that high technology does
not have to be intimidating for non computer experts”(Apple Annual Report, 2011). The
strategies and mission of Apple is largely affected by the external environment it operates in.
This would better be analyzed through PESTEL analysis of Apple.
The primary stakeholders of the company are its shareholders. These are the primary
investors in the company and Apple must try to satisfy this group of stakeholders first. The other
stakeholders that needs to be taken care by Apple are it customers. The companies operating in
retail businesses starve for obtaining customer loyalty. Conventional wisdom of loyalty describes
that customers show loyalty towards companies and brands that tend to go above and beyond
others. So Apple also needs to pay special attention towards its customers as they are their
revenue generators. The process becomes difficult for the companies operating internationally
primarily due to difference in culture and values.
Five Forces Analysis
Bargaining power of Suppliers: The assembly of many parts of the company is
performed by third party vendors in China, California, Texas and Korea. The company supplies
and manufactures its critical components from many third party vendors in different countries
like China, United States, Germany, Japan, Israel, Thailand, Taiwan, Philippines, and Singapore
etc. With the diversification in supplies of components and assembly the company possesses
high bargaining power over its suppliers. High bargaining power of Apple could also be
explained from the fact that company purchases in huge bulks from its suppliers.
Bargaining power of Customers: With the biggest company in its segment, it could be
argued that Apple have a high bargaining power over its customers. This is because Apple has
always been a supreme player, out-placing competition and giving its customers a better
technology product compared to its competitors. Apple sells its products by charging premium
prices and this strategy also has a positive impact on the revenues of the company. This means
the company possesses high bargaining power over its customers.
Threat of new entrants: The threat of new entrants always prevails in the type of
industry Apple operates. This is because, the industry is led by innovative products and an
innovative product and application by one company can eat the market share of other company at
a rapid pace. Though the companies currently operating in the same segment like Microsoft,
IBM, Dell and HP poses a primary competitive threat to Apple, the threats of new entrants also
prevail in the industry. Building strategic partnerships with technology leaders, especially in
computing segment will help company to remain a leader in the industry.
Threat of Substitute Products: Worldwide IT spending has been into a negative
turnaround ever since the global financial crisis spread its wings. The financial meltdown led to
reduced IT spending throughout the globe in 2009. Apple is into that market scenario wherein a
substitute product largely affects the revenues of the company. For e.g. even though the
company’s i-phone is having a maximum market share in smart phones, but a continuous threat
of substitute products is prevailed from companies like Nokia, Sony, Microsoft and Dell that
tend to produce similar products with additional features.
Competitive rivalry within the industry: Competitive rivalry in the technology industry is
growing for Apple day...