Analysis of the Apple Inc

In-depth study of Apple Inc.’s history during the many decades the company has been in business will be provided in this paper. Over the years, the Company has seen tremendous increase in its profit margins and infrastructural development. In this way, the entire structure of the corporation and the elements that led to its extraordinary success will be explained. The essay will also discuss how technology has changed the company’s foreign operations, its comparative advantage, the benefits of trade, and even strategies and tactics. The report will conclude by summarizing the overall recommendation that management can rely on when making decisions. The recommendation will include every aspect of the present economic conditions that are necessary for making the future projections.

Background

The company launched in 1976, and over the many years of operation, the company has expanded into an intricate institution that specializes in the production of many commodities and not just computers. The company was first founded in Cupertino a town locates in California by Steve Wozniak and Steve Jobs Sanford, 2017). Apple remains to be a consumer company implying that the evaluation of its value requires an understanding of customers as well as product. Because of its unique campaign and the philosophy of aesthetic design the company has managed to create one of the most prominent customer relations in the entire electronic industry. The company has attracted so many clients who are mainly devoted to its products and brand especially in the United States (Gupta & Prinzinger, 2013). Apple Inc. is a multinational corporation that sells its commodities over fifty nations, one of the recent successful product that it produced (iPhone) is already available in fifty countries. Apple Inc. also relies on quality as well as product design for this reason its products are priced significantly higher when compared to other products from competitors. It has a reputation of fostering excellence and individuality that attract very talented employees. So as to get the best employees, the company has created the apple Fellows Program. This is a group of individuals who have had a great contribution to the computing world. As at present, the fellowship has awarded so many people for their tremendous contribution these individual include Steve Wozniak, Al Alcorn, Don Norman, Guy Kawasaki, Andy Hertzfeld, Alan Kay, Rod Holt, Steve Capps, and Bill Atkinson (Tóth, 2016).

The company is responsible for designing, manufacturing commodities and selling software, consumer electronics, and personal computers and provides the related services. Apple Company has managed to produce some of the best electronic products which include iTunes, Mac, iPad, and iPhone. Of these commodities generated iPhone alone makes the company fifty percent of the overall sales. The company has been known for its ability to innovate products that meet give the customers the best possible experience. Apple Inc. has managed to create a product ecosystem incorporating it into the daily lives of the people. Because of the brand, it has created, Apple Inc. charges a premium price on the commodities. The apple brand image it has created the company is well positioned to succeed in the future. Of the overall profit that is generated by this company, 40 percent comes from the United States while the rest comes from other parts of the world (Sanford, 2017). Apple iPhones, Mobile phone accounts for over two-thirds of the total sales, other commodities such as Apple TV and Apple watch account for the remainder the sales.

Impact of Globalization

Globalization has affected the company by increasing the level of competition both locally and internationally. Some of the competitors that Apple Inc. competes with is Microsoft. Microsoft being one of the leading software manufacturers on the continent is an indirect competitor to apple Inc. this company has managed to diversify it commodities so as to gain a larger market share in this highly competitive telecommunication market. Microsoft continues to depend on the PC makers such as Samsung, Lenovo, and Dell who load the software on computers. At the present Microsoft operate in more than 190 countries; these countries account for 52 percent of the overall revenue with the remaining 48 percent coming from the United States (Heracleous, 2013).

Direct Competitors

Apple Inc.’s direct competitors include Walmart and Best Buy. Walmart is one of the leading firms on the globe based on the United States. So far the company has employed over 2 million workers in over the 9750 retailers that are spread over 28 states. This company is an irresistible force that gives Apple stiff competition. Walmart’s has embarked on the growth strategy that includes coming up with new stores all over the world; this is the reason why it continues to lead regarding profitability.

The other company that gives Apple Inc. direct form of competition is the Best Buy Co. this continues to be one of the best consumer outlets in the United States. Best Buy is a multinational institution that sells both services and products in more than 1600 stores that are established all over the world. These stores sell appliances, mobile phones, computers, music, movies, and wearables. The Best Buy has embarked on the expansion strategy so that it can occupy the largest market share possible and fight off the stiff competition that exists.

Tactics and Strategies Affected By Technology

From the day the company was formed, Steve jobs liked to proclaim that the corporation was on the path of creating new commodities that could significantly transform the world. For instance, the introduction of a touch bar to it keyboard has enhanced the way people interact with their computer. Apple does not just focus on building beautiful and innovative commodities; it has also built one of the innovative business models. The company delivers its clients with some of the fabulous hardware that is wrapped in some of the best packages. This company created some of the game changing commodities such as iPods and iTunes. The company’s leaders think regarding rapid innovations. Apple Inc. hires the best innovators with the ability to bring the best technological value to the market (Sanford, 2017).

Apply has continuously produced better and new commodities to keep up with the new and changing consumer needs. Apple Inc. is one of the companies that produce the computer operating system and has been waging tactical battles with its competitors such as Microsoft for customer’s preferences since the company came into existence. Apple has managed to keep the propriety of its operating system and manufacture its computers (Lusensky, 2014). Because of such a strategy, apple has grown to become a leader in the computing and internet industry. Apple Inc. also unties technology to market its commodities. The company mainly relies on the special promotions and seasonal advertisements as a tactic of achieving a market dominance over the rest of the competitors. Apple has dominated the graphic design market; this factor gives the company’s commodities the best word of mouth reputation as compared to its competitors. The company has also donated apple software’s and computers to school children so that they can hopefully purchase the commodities later after getting used to them.

Forecasting Supply And Demand of Apple Commodities

Because of the marketing strategy that the company employs in many cases, demand exceeds the supply of commodities. The demand for its goods especially the iPhone as remained to be consistently high. Even before some of the products are released to the market consumers are in many cases queuing and waiting in at the company’s stores to have the commodity immediately it is released. According to the survey that was conducted by M: Metrics, it is approximated that over nineteen million mobile phone users were demanding the iPhone even before it was released to the market. Because of the marketing strategy employed by Apple Inc. 64% of cell phone users in the United States are always aware of the commodities it is going to launch. It is also estimated that about 14 percent of the users who are aware of the new product release are always willing to purchase the product. The hype, as well as the interest for the iPhone, was also been found to be significantly higher in the United Kingdom as 30 percent of all citizens have expressed a keen interest in purchasing the commodity before it is released. According to research done by Change Wave in 2009 37 percent of consumers already owned an apple smartphone while 14.4 percent were planning to purchase the commodity (“Inside Apple: how America’s most admired--and secretive--company works,” 2012).

The company has, however, struggle to keep up with the increasing demand for commodities especially iPhone since 2007 June. The company faced supply issues when it was launching the iPhone 3G back in 2008. Within the first week, the company had already sold 1 million pieces creating an acute shortage. The company’s supply shortage is in many cases caused by the excessive unanticipated demand.

Comparative Advantage

Apple Inc. offers a broad range of commodities and therefore managed to fight off the fierce competition that exists in this industry. Apple Company by far remains to be the most profitable, and the principal competitors include Asus, Nokia, Samsung, and Google. The smartphone market was once dominated by the Canadian firm Research in Motion. But the introduction of Apple Inc. significantly changed the market structure. Because of the stiff competition that exists Research in Motion has been forced to restructure its processes. The Google company designs and develops the operating system which is installed on the non-apples phones that produced by Lenovo, HTC, Sony, Samsung, and Huawei. When it comes to the entertainment applications and media, there are two core players Google and Apple (O’Grady, 2009). The Google applications run on most of the apple competitor’s tablets and phones while the Apple iOS runs on iPod and iPhones.

Samsung

27%

LG

6.90%

Apple

41.60%

HTC

5.40%

Motorola

6.40%

When it comes to the computer market apple controls extends beyond Microsoft. Microsoft takes the greatest share of the market; this is thus the greatest competitor that Apple faces. The company has, therefore, to fight off this competition by coming up with better products that meet the needs of its consumers.

Recommendation

Apple remains to be one of the leading brands on the globe based on the comparative advantage statistics. The company should, therefore, capitalize on the strength so as to reduce the level of competition by creating commodities that meet customers’ expectations. This company needs to go for a more hybrid strategy by practicing cost leadership as well as a differentiation strategy. Apple Inc. has to persist with switcher campaigns, aggressive advertisements, and customers based services so as to attract some of the customers that are loyal to other brands like Microsoft (Sanford, 2017). Apple Inc. should make use of information technology to enhance production; this is because of the excessive demand for its commodities as soon as they are launched. More importantly, this company should produce high-quality products that meet the needs of customers.

Apple has not only maintained consistent sales but also unswervingly added value to give consumers more than they want. Apple has had a strong marketing strategy but should make use of the internet and focus more effort on other regions such as ASIA and Africa where there remains to be a big market that unexploited. Apple Inc. should thus go back to its original path of innovativeness by producing superior commodities that change the world. From the financial perspective, Apple Inc.’s has had a remarkable run in its quest to increase profits and revenues of the past decade. At present the company has reported a net revenue of 215.6 billion, this was a rise by 8% from 2016, and it is, therefore, offers a better avenue for investment (“Apple Inc. (AAPL) | Financial Analysis and Stock Valuation”, 2017).

References

Apple Inc. (AAPL) | Financial Analysis and Stock Valuation. (2017). Stock Analysis on Net. Retrieved 16 July 2017, from https://www.stock-analysis-on.net/NASDAQ/Company/Apple-Inc

Gupta, A., & Prinzinger, J. (2013). Apple, Inc.: Where Is It Going From Here?. Journal Of Business Case Studies (JBCS), 9(3), 215. http://dx.doi.org/10.19030/jbcs.v9i3.7797

Heracleous, L. (2013). Quantum Strategy at Apple Inc. Organizational Dynamics, 42(2), 92-99. http://dx.doi.org/10.1016/j.orgdyn.2013.03.002

Inside Apple: how America’s most admired--and secretive--company really works. (2012). Choice Reviews Online, 49(11), 49-6372-49-6372. http://dx.doi.org/10.5860/choice.49-6372

Lusensky, M. (2014). Did You Bite the Magic Apple?. Jung Journal, 8(1), 57-70. http://dx.doi.org/10.1080/19342039.2014.841445

O’Grady, J. (2009). Apple Inc. Westport, Conn.: Greenwood Press.

Sanford, G. (2017). apple-history.com / specs for every apple computer established 1996. Apple-history.com. Retrieved 16 July 2017, from http://www.apple-history.com/

Tóth, G. (2016). Az Apple titok, avagy mitől szeretetmárka az Apple? = The secret of Apple, so what makes Apple a lovemark?. E-Conom, V(1). http://dx.doi.org/10.17836/ec.2016.1.001