The factors influencing the future business of apple

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Contents
Introduction .......................................................................................................................................2
Overview of the Apple ....................................................................................................................2
Challenges faced by the Company....................................................................................................3
Measurement of Success.....................................................................................................................4
Define success................................................................................................................................4
Balance scorecard...........................................................................................................................4
Reasons of success..........................................................................................................................5
Innovation ..................................................................................................................................5
Retail and distribution Network....................................................................................................7
Product line.................................................................................................................................7
Product quality...............................................................................................................................8
Product Design............................................................................................................................8
Technology.....................................................................................................................................9
Strategic planning of the Apple........................................................................................................9
Net profit and revenues ...................................................................................................................9
Internal Analysis ..............................................................................................................................11
Value chain analysis......................................................................................................................11
Procurement.................................................................................................................................15
VRIN framework with core competencies ......................................................................................15
Leader – Steve Paul Jobs and Tim Cook.............................................................................................19
Contribution to Apple By Tim Cook ..................................................................................................20
Leadership styles ..........................................................................................................................21
Review of Strategies used by the Apple.............................................................................................23
PEST analysis ..................................................................................................................................26
References .......................................................................................................................................30

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Introduction
Overview of the Apple
Apple incorporation is a well established company and the company started its business in
California and the founder of this company were Mr. Steve Paul and Stephen Gary. The year of
establishment of this company was 1977. Apple incorporation is well known for the mobile
phones, software and laptops. Talking about the range of the products, the Apple offers iPhone,
Mac book and iPad. The Apple incorporation operates its business in all over the world and it
includes many markets like USA, Canada, Japan, France and UK. The strength of people
working at the Apple incorporation is around 14000. As the company size is large, it is an
obvious thing that employee size also be huge. Therefore the Apple brand is very much popular
for its quality and all its products. The operating system used by the Apple Company is owned
by the Macintosh, which is very different from the other operating systems of the mobile phones.
The Macintosh does not believe in using the operating system of Google and Microsoft. Apple
Inc faces a number of challenges in different operations.
.

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Challenges faced by the Company
Apple is a big brand name in the market and it is a very successful company, but still there are
many challenges faced by the company. The challenges faced by the company are related to the
technology, leadership and the competition.
To cope up with the changing technology is a big challenge. As the company introduces the
latest version of iPhone‘s every year, this is the reason that the company continuously trying to
grow with the technology. After the death of the Steve jobs , the company is facing many
challenges as he is the leader who had the innovative ideas. Steve job was a man with the strong
vision and mission and he was the strength of the company (Johnson & Li, 2012). Moreover the
existing competition is also a great challenge as there are many companies that offering mobile
phones at lower prices like Samsung, Sony, HTC etc.

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Measurement of Success
The success of the Apple company can be measured through the previous results and revenues of
the company. The financial status of the Company shows the level of the success of the
Companies. The net profits earned by the company and the sales revenue of the Apple company
depicts the success of the company.
Define success
The success can be defined as the situation when the company achieve its goals in terms of
profits, customer loyalty and the competition. In simple words, success is the completion of the
goals (Mickalowski, Mickelson, & Keltgen, 2008).
Balance scorecard
Balance scorecard of the Apple helps to measure the performance of a company by looking into
the activities of the company and then helps to clarify the vision and strategy of the companies.
Balanced scorecard involves the internal as well as the external analysis of the business of the
Apple to achieve the objectives of the company (University of New Mexico, 2011). There are
many perspective with the help of which the performance of the company can be measured and
these involve financial perspective, customer perspective, competition perspective and internal
environment.
Financial perspective- The apple mission and vision is to gain high profits and growth from the
financial perspective.
Customer perspective - Apple wants to attract new clients and provide the services as per their
needs and expectations. The customer satisfaction is very important to maintain the brand image.

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Competition perspective – To gain the competitive advantage over the other competitors like
HTC, Dell , Lenevo and Sony etc. is the main aim of the company.
Process perspective –The utilization of the available resources and work with an efficiency needs
to be measured to check the performance of the activities.
Reasons of success
The reasons behind the success of Apple inc. are its innovation and the marketing strategies used
by the company to promote its products.
Innovation
As a brand the single Word suitable for the Apple is “Innovation”. Apple launches very less
products in the markets. The company launched approximately five products in the market in the
previous time, but all theses products are very different in nature in comparison to the other
companies (Phan & Singer, 2012). The innovative products launched by the Apple company are:
The iPads: - This is the most stylish MP3 player launched by the Apple.
The iPhones: - The smartphones of the Apple company are still the topmost products and after so
many years there is no competitor who is able to beat this brand.

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The iTunes: - This is the software for the people to download music on their smartphones or
laptops.
The app exchange: - Apple presents more than 98% apps to the customer
The apple store: - With this innovation, the company earned around $2 billion through the apple
Revolutionary shops as it increases the value of the products.

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Retail and distribution Network
The apple has a very strong retail and distribution network as the company opened its largest
Store in the Boston to to increase the retail network in the home countries as well as in the
abroad. There are many ways of distributing the products of the company like through retail
stores, online stores, direct sales and the third party resellers.
Product line
The apple company has many product lines as it deals with the manufacturing, designing and the
marketing of the smart phones, personal computers and the related devices like Mac book,
softwares, and networking solutions.

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Product quality
The quality of the products offered by the Apple is much better than the other companies’
products. The mobile phones and the laptops like the iPhone and the Mac book are more reliable
and the life of these products also more also as compared to the other companies which attracts
many customers.
ProductDesign
The products of the Apple company are properly designed by the company to attract the
customers and the people buy these products because of its looks and design. The high price of
these Apple products adds value to their standard of living. The apple products now become the
status symbol for the people and this is the reason of the success of the Apple.

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Technology
The technology and the operating systems used by the Apple company are far better than the
competitors and it will result into the success of the Apple business. The apple company uses the
latest technologies for its products.
Strategic planning of the Apple
The most important reason behind the success of the Apple are its successful strategic planning.
Talking about the previous time, the company also seen the failure, but the strategic planning or
the business strategies adopted by the company convert the failure into the success of the Apple
brand.
Net profit and revenues
Apple is considered as the world’s largest company in terms of capitalization. The company
started the manufacturing of the computers in the 1970-1980s.
Fig 1 Apple Revenues

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Fig 2 – Sales of iPhones
The above diagrams depicts the revenue of the Apple from all its products from the year of 200
to 2016 and it shows the tremendous growth of the company in every year. The figure 2
represents the sales of the iPhones of the last 13 quarters of 3 years from 2013 to 2015 (Lazonick
& Tulum, 2013).

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Internal Analysis
A value chain analysis and VRIN framework are used to analyze the strategic capabilities. These
help to identify the internal environment of the Apple company.
Value chain analysis
A value chain analysis outlines the framework of the primary activities of the Apple and the
Support activities of the Apple to gain the competitive advantage to the business. Porter in his
model also introduces two activities-
 Primary Activities- These activities are the part of supply chain management as it
includes inbound logistics, operations, outbound logistics, marketing and sales, service
etc.
Inbound logistics: - The apple company working all over the world with a number of suppliers
and focuses on maintaining the management of the supply chain.

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The above diagram shows the roadmap of the Apple that depicts how the supply chain
management takes place.
Outbound Logistics: - Outbound logistics of the Apple involve the storage and the distribution
of the ready iPhones and other products of the Apple. Ecommerce sales are the most useful
technique used by the Apple to sell its ready products. The apple company is on third position of
the retailers in US in the terms of the e commerce business (Sultan & Saurabh, 2013).
Marketing and sales: - There are the seven different ways of Apple to sell their products in the
market. These seven ways are retail stores, direct sales, online sales, third party resellers,
wholesalers, retailers and the value added resellers. Talking about the figures, the company sell
its products through direct and indirect sales around 35 % and 75 5 of the total sales in the year
of 2016. The company sets the budget for the advertisement is around $1.8 billion and that

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budget is still similar after the takeover of the Tim cook in 2011. The company has decided now
to hide the marketing budget of the 2016 and it will not disclose to the public (Ensign, 2001).
Apple Inc. Service: - Apple is well known for providing the quality services to its customers.
There are three stages where the company provides the services to the customers and these 3
stages are
 Pre- purchase
 Purchase
 Post purchase
The sales people in apple company are well trained and very polite in speaking. The young males
and females have the capabilities, to explain the features of the product to their customers in a
very polite and soft way. Post purchase services of the apple company involve the updation of
the phone and software with additional payment.
 Support Activities: - These activities provide help and support to all the primary
activities and these include Human resource management, technology, Firm
Infrastructure and procurement.
Human resource management: - The Apple company spends huge money on the retaining of
the existing employees as well as on the hiring of the new employees. It is very important for the
Apple Company to retain its employees. The employee satisfaction plays a significant role in
improving the performance of the company. The employees are the one who builds the brand

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image of the company and the goodwill as well. The Apple company has always offered
attractive incentives to their employees as per the needs of the employees. Some employees of
the apple expect monetary incentives and some expect non monetary incentives.
Technology development: - As we know that technology changes the life of people. Similarly,
Technology plays a significant role in Apple supply chain also. The Apple company uses latest
technology for its products as well as for its supply chain management. The use of technology in
the supply chain helps to identify the demand, tracking of the stocks, to upgrade the software etc.
For example, Apple company also uses the bar codes with the help of which it is easy to collect
and analyzed the require information and the data of the product.
Firm Infrastructure: - The firm infrastructure means the structure of the Apple company and its
management as it includes the different departments of Apple like finance, planning, marketing,
designing, legal, and quality control management.

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Procurement
Procurement refers to the arrangement of the raw materials as the Apple company has huge
number of suppliers all over the globe. There are many distribution channels of the Apple
company. The process of procurement involves the direct relation with the suppliers. The direct
relation with the suppliers can be maintained by the apple company through the medium of any
middle man or through the mailing and Telephonic conversations.
VRIN framework with core competencies
Value chain
activity
Evaluation of core competencies Sustainability
Inbound logistics Value- Apple focuses on the understanding of
the needs of the customers
Rarity- the activities of this value chain are not
rare.
Inimitability- difficult to imitate as it has a large
no of suppliers
Non-substiuability- dell and Lenevo are the
competitors of the Apple
Moderately
sustainable
Operations Value- Apple tries to save cost and time of the
customers.
Rarity- the software and the operating system
used by apple is rare as other companies use
High

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android or microsoft. This will gain the
competitive advantage.
Inimitability- difficult to imitate as it has a large
no of innovative products (Melnychuk, 2011).
Non-substiuability- no real substitution available
for iPhones.
Outbound
logistics
Value- Apple focuses on distribution of the
products.
Rarity. The usage of e commerce for sales is not
rare
Inimitability- difficult to imitate as it has a
strong brand image
Non-substiuability- the consumers can buy the
other companies products because of their low
cost.
High
Marketing and
sales
Value- variety of sales channels and high prices
Rarity- rare to build the same level of brand
image
High

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Inimitability- difficult to imitate as it already
attain the customer loyalty.
Non-substiuability- alliances of the apple with
many companies make it difficult to compete.
Service Value- to attract more customers by providing
services to customers.
Rarity other competitors also offer many
packages for the people (Xue, 2016).
Inimitability- easy to imitate by hiring young
employees by the competitors.
Non-substiuability- easy to substitute as the
other companies also focus on the customer
services.
Moderate
Human resource Value- Employees are valued by offering
incentives.
Rarity- offers job promotions on the basis of
performance are rare.
Inimitability-as compared to other the other
Low

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companies focuses on promotions on the basis of
seniority or age.
Non-substiuability- employees can be replaced
easily
Technology
development
Value- focuses on the latest technology
Rarity- Technology used by the apple is different
Inimitability- difficult to imitate as the
technology used by the company is not same
Non-substiuability- easily substitutes as the
technology is developing very fast.
High
Firm
infrastructure
Value- Higher bargaining power over the
suppliers
Rarity- not rare as the firm infrastructure is the
important pasrt.
Inimitability- structure is different from other
companies.
Non-substiuability- difficult to substitute
Moderate
Procurement Value- quality of raw material supplied by the
suppliers.
Moderate

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Rarity- not rare.
Inimitability- easy to imitate as the suppliers are
not for Apple only, they also worked with many
companies.
Non-substiuability- easily substitutes as the cost
matters. suppliers can be replaced .
Leader – Steve Paul Jobs and Tim Cook
Steve Paul was the iconic leader of the Apple company. The Steve Paul was the founder of the
company . The Steve jobs was born on 24th February 1955, in California. The Steve Paul Jobs is
known for his innovation. He was the man who thinks differently. Steve Paul job was adopted
by the Clara and Paul jobs. After the completion of the high studies of the Steve, he worked as a
video game designer with Atari in the 1976. After a few months, he left the job and travelled to
India for experimenting the technologies (Hurley-Hanson & Giannantonio, 2013). When he was
at the age of 21, the Steve jobs started Apple computers with Wozniak. Wzniak is the person
who has the series of the personal computers and Steve is the person who marketed the apple
computers. Later on, Steve invented many products of the Apple like Mac book, iPod, iPhone
by using the latest technologies. The Steve Paul is the great leader. He was the man with the
velar vision and he took the company on different heights. As a leader, he had all the abilities to

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lead the company and the employees of the company. The company suffered after the death of
the Steve. The Steve jobs passed away on October 5, 2011. After the Death of the Steve Paul
Jobs, Tim cook is the person who hired as a CEO of the company. As per the saying of the Tim
Cook, no one can replace the Steve jobs.
Currently, the Tim cook is the man who leading the company. Tim cook was appointed as a
CEO of the company in the year of 2011 after the death of the Steve jobs. Tim cook was the very
close friend of the Steve and he already decided to hand over its business to him after his death.
+
Contribution to Apple By Tim Cook
When the Tim Cook hired as a CEO of the Apple, he gave very good results in the growth of the
company. The company earned good sales revenue as compared to previous years. The company
never sold so much before because the company sales revenue for the quarter is $80 billion under
the supervision of Tim Cook (Murphy, 2016). Talking about the profitability, then the Tim Cook

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raised the profits to $20 billion of Apple. In May 2014, the Tim Cook took a step to buy a Beats
music and Beats electronics for $3 billion. It was a good step taken by the Tim Cook. Tim Cook
also launched many new versions of the iPhone, iPod, etc. Tim cook is the only one who manage
and lead the company very well after the Steve Jobs. The growth of the company from the last 5
years is in rapidly growing very fast because of the great efforts of the Tim Cook (Johnson & Li,
2012).
Leadership styles
The leadership plays a vital role for the betterment of the organizational performance.
Undoubtedly, Leadership is an art that gives a new shape to the company and it requires a lot of
good skills, techniques and self confidence. There are various attributes of a good leader,which
comes under this trait theory and some of the most common attributes are sociability,
determination, intelligence, self-confidence, charisma and integrity. In the Apple Company the
best example of a determined leader was Tim Cook, who spent his entire life working for the
people of US and adopted a philanthropic approach towards mankind. There are many styles of
the leadership that the Tim cook also possessed
1) Autocratic: - This style of the Tim cook believes that to put high emphasis on the
performance of the Apple company. As a leader the Tim Cook holds the discretion
power in their own hands without delegating it to their subordinates. It is also called
authoritarian leadership and leaders like Tim Cook take all the decisions based on their
own judgment and ideas. Managers are very well aware of their decisions as to when and
how the things to be done.

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2) Laissez- faire: - This leadership style is opposite to the Autocratic. As this style of
leadership puts low emphasis on performance and people. This style is not good for the
situations where employees need supervision to work so it reduces the productivity of
employees and doesn’t provide good results. Tim cook is the leader who gives the
complete freedom to its employees to take decisions and they solve the problems on their
own as they are close to the point of action so they are well aware of the problems.
3) Transactional: - The CEO of the apple company believes in transactional leadership style
to motivate the employees by exchanging the rewards and targets between the employees
and management of the Apple (Dalal, Apple’s Innovation Strategy, 2013).
4) Participative: - It is also called democratic leadership. The participation of the employees
in the decision making is to be considered by the Apple company. Tim always tries to get
the inputs from all the employees and then make a decision according to their inputs. This
style of leadership motivates the employees and make them happy by giving the
importance to their opinions.
5) Transformational: - Transformational leadership style of the Tim Cook focuses on the
development of followers as well as their needs. The Tim cook possesses the
transformational leadership style because he concentrate on the growth and development
of the value system of employees, their inspirational level and moralities with the
preamble of their abilities.

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Review of Strategies used by the Apple
Porter’sgenericmodel ofstrategies
There are four levels of strategies introduced by the Porter on the basis of which operations of
the company are conducted to achieve the best position in the market. These four current
strategies used by the apple company are shown in the below diagram: -
Cost leadership strategy: In the porter’s strategy model, competitive advantage is the main aim
of the company. The cost of the Apple's product as it is too high for the middle-class people.

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Apple as a brand offers a high price for the iPhones and Macbooks and this pricing is based on
the target customers. The target customers of Apple are those who are financially sound and
capable of paying more prices for the quality of the product. Apple inc. is so famous and popular
brand of electronic items that people ready to pay more dollars because of the quality of
products.
Focus strategy- To increase the market share, apple needs to focus on the new territory or the
country to become a successful leader in the electronic devices. Apple needs to focus in order to
gain effectual control over the players which are vertically placed under them in the value chain
of production and distribution. This is a significant and a conscious corporate decision. This
strategy includes design, just in time production, sales and marketing of the Apple products.
Through this integration, the corporate firms decide to direct contact with the end users via
online apple store (iTunes) and through the retail apple stores that include attractive customer
support and care. In order to reduce transaction costs and have a secured supplier and distribution
channel, the firms gain control over their distributors through various measures to increase its
power in the market (Gosnar, 2012)
Differentiation- The prices of the apple products are high, but the differentiation proves the
reasons of having high prices as because of the product innovation and product quality. In the
future, with the development of technology and new products allow the Apple to lower its prices.
The business level strategy of the apple is to gain the competitive advantage over the other
companies (Nagaraj, Patterson, Schildhorn, & Thacher, 2013).Apple plans to take a step to
compete with the various companies. For personal computers, Laptops and hardware, Apple
compete with Dell, HP and Lenovo etc. Microsoft is the competitor in comparison to the

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operating systems, whereas for Apple Smartphone the competitors are Sony, Nokia, Samsung
and HTC (Dalal, Apple Innovation Strategy, 2011). The main difference between the current and
past strategies is that the Apple focuses more on Smartphone development as compared to the
personal computers. This is the reason that Apple computers named has been changed and it
became Apple Inc.
Strategic alliances
Apple involves acquiring of similar businesses and activities which are essentially placed at the
same level of the value chain.. This strategy of Apple is implemented through new products and
new areas of creativity and also via introducing these products in the new country or market
(Raboch, Wang, & Wu, 2009). It includes corporate strategies of acquisition, mergers and joint
ventures. This is mainly done to consolidate with competitors in the market and to drive them out
in order to gain market power and control. Some of the alliances done by the Apple company are
as follows:-
 Apple and Disney companies are allied to improve the performance of Disney store
 Apple and HP worked to deliver the iPod on the basis of HP music player.
 Apple and Microsoft alliances to build the Microsoft offices for the Mac book
 Apple has acquired 24 companies from 2000 onwards, and these companies are
Netseletor, Authoring Software, bluebuzz, Poly9, C3 Technologies

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.
PEST analysis
This part of the report explains the environmental factors that affect the future success of the
apple in the coming 5 or 10 years. The PEST analysis involves the political, economic, social
and the technological factors that may affect the business of the Apple in the future either in
positive or negative ways.
Political factors: - The political factors basically involve in the changes takes place in the
government policies and politics of the country. The political factors present the opportunities for
the Apple business in future. The most significant political factors in the case of Apple are-
 Change in the free trade policies will be an opportunity for the Apple to distribute its
products across the world in an easy way (Hernandez, 2011).

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 Stable political environment of the Country also beneficial for the growth of the Apple
business. Apple can expect minimum political issues if there will be a stable politics in
the country.
Economic factors: - This aspect of the PEST analysis also creates an opportunity for the
business of the Apple as it depicts the economic and market conditions of the country. The two
significant factors of economic conditions are;
 Fast growth of the countries is an important factor as this helps to increase the revenues
of through sales. The reason of of this success will be the high economic growth rates and
sales will increase by offering products in the foreign markets.
 Stable economic condition of the country will create an opportunity for the apple
business to expand its business. Apple needs to consider the two things –speed and
effectiveness. Because there are many competitors who will also target the high growth
economies (Brown, 2015).
Social factors: - The social factors impact in future also good for the success of the business.
These factors focus on the behavior of the consumers and their expectations. The most important
social factors that may affect the business of the apple in the future are: -
 Increase of the usage of the social media.
 More Dependance on the mobile phones.

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The increasing level of the using the social media by the consumers of the society will lead to the
increase the demand of the digital devices in the country. Moreover, the people are highly
dependent on phones and that factor is beneficial for the Apple to introduce more products.
Technological factors: - Current technologies and the change in the technology will be an
opportunity as well as the threat to the company. As it is very difficult to cope up with the new
technology every year (Pandey & Mittal, 2016). On the same hand, it creates opportunities for,
the business also. The technological factors of the apple business include-
 Cloud computing
 Technology Integration
 Rapid growth of the Apps market
All of the above factors will create an opportunity for the apple business as the company will
expand its products with the growth of the apps market. In the coming years, with the change
of the time and the advancement of the technology, the apple can launch new user friendly
products as per the needs of the people.

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Overall, this report explains the successful running of the business of the Apple company. This
shows the detail description of the factors influencing the future business, its internal analysis
and the reason of the success of the apple business.
Political Factors
Change in free tradepolicies Stable
political environment
Economic Factors
Stable economic conditions Rapid
growth of the countries
Social Factors
Dependence on the mobile
phones .
Increaseof the usageof social
Media.
Technological Factors
Change in technology
Cloud computing
Rapid growth of apps Market
PEST

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http://www.ijarcsms.com/docs/paper/volume4/issue7/V4I7-0011.pdf

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