BS15079 & BS15051

BA (Hons) in Business Studies, CITY

College, An International Faculty
of the University of Sheffield
4/1/2016

Word Count: 2597

Executive Summary
Apple Inc. is a multinational company that was first established on 1976 by
Steve Jobs and Steve Wozniak. Its headquarters now stand in Cupertino,
California. It now is the one of the most profitable and valuable companies out
there. Today Apple stands as the giant, but behind this tremendous success
stands its exceptional and rather unique execution of the managerial tasks.
Throughout the report, we have aimed to provide an elaboration of the four
basic pillars of management: planning, organizing, leading, and controlling of
the famous Apple Inc. Planning includes a thorough analysis of the strategic
planning. Throughout the section we have analyzed the current strategies as
well as the process that is being used to achieve them. Additionally, the
distinctive moves and procedures are deconstructed in order to comprehend
the operations that lead to the current global success the firm is experiencing.
Furthermore, a SWOT and Porter analysis are presented and explained.
The organizational section encompasses information on the company's
organizational structure, chart and culture. A discussion will be made on the
past and present CEOs' influence on the corporate culture and the employees
roles on decision-making process, the motivation of employees and Apple Inc.
as a workplace.
In the leading part of the report, all company's leaders are presented along
with each one's different method of leading and directing its subordinates.
And last but not least, the controlling section where the controlling process is
discussed along with Apple's controlling methods.

Apple Inc. Analysis

Table of Contents

1. The Firm......1
2. Planning ....3
2.1.

Current Strategy.3

2.2.

Past Strategies & Implications ....5

3. Organizing ...........7
3.1.

Organizational Structure......8

3.2.

Organizational Culture.9

4. Leading11
4.1.

Apple Inc. Leaders..11

4.2.

Leadership Approach ...12

5. Controlling .....15
5.1.

Control Mechanisms...15

6. Conclusions & Recommendations...17

7. References..18
8. Appendices22
Appendix 1: SWOT Analysis Apple Inc. ...22
Appendix 2: Porters Five Forces Model - Apple Inc. ...26
Appendix 3: Fiscal 2015 Apple Inc. Financial Performance....28
Appendix 4: International Market Presence & Planning.29
Appendix 5. Employee Motivation...29
Appendix 6. Apple Inc. Workplace & Corporate Culture..30

Apple Inc. Analysis

1. The Firm
Technology, in these days, has a major impact on the lives of people worldwide
(Tar, 2013). All modern societies rely on it significantly and the advances that
have occurred in the last decades have changed the way that people live,
react and communicate (Tar, 2013). Apple Company, nowadays Apple Inc.,
has stunned and kept the world under its grasp in the last half of the century,
by changing an industry radically (Linzmayer, 2004). From 1976, when the
company was launched, until now, the technological advances and the
products manufactured, have brought about a new generation of goods and
services on the hands of the general public (Linzmayer, 2004).
Stephen Gary Steve Wozniak and Steven Paul Steve Jobs co-founded the
Apple Company in 1976, when they introduced the first
Apple I computer (Isaacson, 2012). A few years later,
the organization was incorporated, and in 1980 went
public with a value per share of the amount of $22, a
record Initial Public Offering, IPO, since Ford entered the
stock market (Nair and Quay, 2012). Afterwards, in 1984 the

Figure 1. Apple Computer I

Macintosh computer was introduced, which led the way in the mass business
sector of the graphical client interface (Cusumano, 2008)
Conversely, even though, it was a success, a year later, in 1985, Steve Jobs was
overthrown from the corporation, due to the great cost of the device
(Isaacson, 2012). But, in 1997 he was re-established in his position as CEO and
directed Apple to its forerunner position in the industry of digital devices
(Isaacson, 2012).
Currently, the organization creates and promotes smart cell phones and
devices, personal computers and transferable music players (Apple Inc., 2015).
The main products manufactured are iPhones, iPads, Apple Watches, iMacs
and Apple TVs (Apple Inc., 2015). Moreover, the firm is in charge of the iCloud
service, the iOS and OS X operating systems and many more patents (Apple
Inc., 2015). Furthermore, a range of correlated services, accessories, software
and applications are marketed, as well as, a variety of retail Apple stores
operating worldwide (Apple Inc., 2015). Lastly, it is a California based

Apple Inc. Analysis

organization which not only vends to consumers but also to businesses of all
sizes and governmental instruments (Apple Inc., 2015).

Figure 2. An Illustrated Timeline of Apple. (WordPress.com, 2011)

Apple Inc. Analysis

2. Planning
Planning, being one of the four primary functions of management, can be
characterized as the ability of a manager to distinguish and select fitting
objectives and courses of action, so as to fulfill them (Jones and George, 2014,
Schermerhorn, 2010). The significance of planning is crucial, it sets the direction
the organizations want to follow, and is the basis where the other managerial
tasks and functions are built upon (Schermerhorn, 2010). The procedure
followed consists of three stages (Jones and George, 2014).

Figure 3. Strategic Planning and Business Analysis in the Relevant Categories

(Team FME, 2013)

Firstly, is establishing the corporations main objectives, where you strive to form
a competitive advantage. The second stage is evaluating the existing situation
and devising an appropriate strategy based on the goals chosen. Lastly, the
third stage is applying the strategy by allotting capital and duties (Jones and
George, 2014).

2.1. Current Strategy

Apple Inc. is focused on conveying the best client experience to their
customers through their creative equipment, programming and benefits
(Apple Inc., 2015). The organization incorporates, constructing and growing its

Apple Inc. Analysis

own retail and online stores and its related circulation system to viably obtain
more clients and offer extensive deals and post-sales support experience
(Apple Inc., 2014).
It has accomplished its remarkable performance through viably actualizing an
unusual system: differentiation through innovation with concurrent serious
degrees of efficiency, resulting in the most reduced expenses in its industry
(Loizos, 2013). Yet, when companies endeavor to utilize both of these
strategies, in the long-term, they get stuck in the middle, as, it is not feasible
to differentiate a product at low cost (Jones and George, 2014). Nonetheless,
this combination, called quantum strategy, is the key to success of the firm
since producing innovative products enabled them to charge premium prices.
Furthermore, by reducing the cost of production and outsourcing a low-cost
strategy is attainable (Loizos, 2013).

Differentiation Strategy Indicators

Low-Cost Strategy Indicators

Winner of various innovation and

design awards
Ability

to

Lowest SG&A costs

Highest inventory turnover

demand

premium

R&D

prices and achieve exceptional

profit

margins

and

intensity

lowest

in

this

industry

revenue

growth
Table 1. Indicators of quantum strategy (Loizos, 2013)

Differentiation Realization

Low-Cost Realization

Focus and invest in, innovation

know-how
People strategy employing the
most qualified personnel and
encouraging them to succeed
Branding

nonconformist

image

of

ingenuity,

Strategic focus in productmarkets, types of product and

product features
Distributed organizational design
high value added functions in
California,
manufacturing
outsourced to inexpensive sites
Synergies related diversification
in terms of industries as well as
products (e.g. technological
platforms)

Apple Inc. Analysis

investment in Apple Stores in
prominent areas
Apples

patented

ecosystem

allows higher pricing control and

consumer appeal
Historically,
leadership

Steve

Jobs

demanding,

Intense focus on supply chain

efficiency
(less
warehouses,
reduction of supplier numbers)
Flat organization and simplified
processes increase efficiency

perfectionist, visionary
Table 2. Differentiation and low-cost strategy realization (Loizos, 2013)

2.2. Past Strategies and Implications

In 2001 inertia had ensued in Apple Inc., a loss of, approximately 6% of turnover
was reported and the sales had decreased (Ashcroft, 2012). In order to capsize
the situation a number of options was discussed, eventually though, music was
chosen, since it was evident that it was beneficial by two basic strategy analysis
tools, market growth rate and market share, best identified by employing BCG
Matrix (Aschroft, 2012, Schermerhorn, 2010). The iPod was launched within an
industry where no key competitor existed and, moreover, the trend for storing
music within digital devices was in full swing (Ashcroft, 2012, Lynch, 2012). Its
distribution was achieved by multiple mediums, such as the online and retail
Apple stores but also through retailers around the world leading to full customer
experience (Apple Inc., 2015, Ashcroft, 2012, Lynch,2012).
Once, the company entered the music industry by forming alliances with the
major record companies their market segmentation started to change
dramatically, roughly, 74% of sales in 2000 were to businesses and professional
markets but by 2011, approximately, 75% of sales were transferred in the
personal user and education markets (Ashcroft, 2012, Lynch, 2012).
In 2007, the company introduced the iPhone, just one year later they launched
the upgraded iPhone 3G and each year after that a new, high quality gadget
was unveiled including the iPad line (Ashcroft, 2012, Lynch, 2012). This incessant
product development caused the cannibalization (Ashcroft, 2012, p.13) of

Apple Inc. Analysis

the previous editions, however, kept them a step ahead from their competition
(Apple Inc., 2015, Ashcroft, 2012, Lynch, 2012).

Apple Inc. Analysis

3. Organizing
APOrganizational structures are results of organizing process. They provide a
clear portrayal of responsibilities and roles, relationships and lines of authority.
(Jones and George, 2012) "By reviewing an organizations structure, a manager
will be able to determine which human, financial, and technical resources are
available, how they should be allocated, and which resources are lacking."
(Pathfinder, 2010, p.1).
An unconventional and unique organizational chart with Timothy Cook at its
centre.

Apple Inc. Analysis

3.1. Organizational Structure

In Apples case, the organizational structure is in a hierarchical system. Its
organizational structure contains rudiments from other organizational structures
and has enabled the maintenance and sustainment of their leadership style.
Now, under Tim Cooks leadership, Apple has undergone some small changes
in its organizational structure to match the market and industry demands.
(Meyer, 2015)
The following characteristics are the pillars of Apple's organizational
structure:

Apple's organizational structure represents a

hierarchical system. Previously, everything
had to be run by Jobs, who did all the
decision-making. Now, with the changes
Spoke-and-wheel

made, there is more collaborative work (e.g.

Hierarchy:

software and hardware teams) and the vice

presidents have more autonomy, which was
almost non-existent under Jobs. The structure
still remains spoke-and-wheel, with Timothy
Cook at its centre (Meyer, 2015

Apple Inc. Analysis

Function- Based Grouping

The upper tier of the organizational structure

has elements embodied from the functional
structure. This involves each senior vice
presidents overseeing their specific functions
of business (Meyer, 2015)

Product-Based Grouping
The lower tier that consists involves the vice
presidents that deal with product elements
or specific products (Meyer, 2015)
Table 3. Apples Organization Structure (Meyer, 2015)

Pros and Cons of the Organizational Structure

Pro: Enables a strong control over the corporation. Top leaders of Apple are
authorized to control everything going on in the organization and through
function-based and product grouping, it certifies that Cook and Senior Vice
Presidents control all organizational processes (Meyer, 2015)
Con: The limited flexibility of the organizational structure. The structure foils lower
levels of the chart from reacting flexibly to business matters. Furthermore, they
cannot do rapid changes because everything has to be run by Cook's office.
(Meyer, 2015)

3.2. Organizational Culture

"Organizational Culture is the shared set of beliefs, expectations, values and
norms that influence how members of an organization relate to one another
and cooperate to achieve organizational goals" (Jones and George, 2012, p.
319).
In Apples case, the following characteristics cement its organizational culture
are:
Top-notch excellence: Apple aims to employ people that are the best at what
they do. Brilliance is accentuated as a crucial element of success, particularly
when designing and producing products. Nothing short of excellent is

Apple Inc. Analysis

accepted and anyone whose performance does not meet the expectations
is fired without hesitation (Meyer, 2015)
Creativity: Creativity is a valuable asset at Apple, especially for employees who
work in designing and developing products. Furthermore, this feature has
served helpful in problem-solving and when determining what the consumers
want (Meyer, 2015).
Innovation: Innovation highly emphasizes in their organizational structure.
Apple is applauded for its innovative spirit in the business and constantly
encourages its employees to come up with inventive, original and contributive
ideas on product design and production (Meyer, 2015).
Secrecy: Secrecy is an important part of their organizational culture because
it shields the company from thievery of information or espionage. Every
employee at Apple agrees to a non-disclosure agreement that prevents them
from spreading information (Meyer, 2015).
Moderate combativeness: This feature was highly linked with Steve Job's way
of leading. Steve Jobs even used to provoke his employees just to see whether
they had what it took to be a part of Apple. Today, under Tim Cook, it is
practiced but in a more abated manner (Meyer, 2015).

10

Apple Inc. Analysis

4. Leading
According to Prentice (2004, p. 102), the accomplishment of
a goal through the direction of human assistants is how
leading

is

outlined.

Moreover,

recognizing

and

comprehending individual motivations, and enrolling

employee involvement in a fashion that personal needs
and

interests

are

integrated

to

the

corporations

objectives, should be aims of a fruitful leader (Prentice,

2004).
Figure 5. Strategic Leadership
(Public Domain, 2016)

Each manager has a different approach and style in the

manner they attempt to guide workers and associates (Jones and George,
2015). Consequently, there are three main types of leadership approach (Rauf,
2014, Schermerhorn, 2010). Firstly, there is autocratic, where managers keep
authority and information within their absolute control and act in a command
and control manner, which would be more efficient in a crisis condition (Rauf,
2014, Scermerhorn, 2010). Secondly, the laissez-faire style, represents managers
who let the employees make decisions by themselves without having any
control over them (Rauf, 2014, Schermerhorn, 2010). Lastly, when managers
encourage personnel to contribute in the decision making process and assist
them acquire knowledge and know-how, they are considered democratic
(Schermerhorn, 2010).

For example, in order to manage the marketing

department, the last two approaches could be more beneficial (Rauf, 2014).

4.1. Apple Inc. Leaders

Apple Inc. has witnessed the leadership styles of five individuals since 1976 that
it was created (Nair and Quay, 2012). When Steve Jobs was overthrown from
the company in 1985, he was, already, not the companys CEO for the duration
of two years (Nair and Quay, 2012). However, that caused a power struggle
(Nair and Quay, 2012, p. 21) between the two men, thus being one of the
reasons Jobs departed from the firm (Nair and Qauy,2012).

11

Apple Inc. Analysis

Therefore, from 1983 to 1993 the companys CEO was John Sculley, a Pepsi
sales and marketing executive (Isaacson, 2012), who even though managed
to pull the corporation through the economic crisis in the USA, in the 80s,
effectively, with a stock market price up by 75%,
afterwards, was replaced by Michael Splinder (Nair and
Quay, 2012). Moreover, Sculley had to compete the
major rival that was Microsoft at that time which was a
futile endeavour (Nair and Quay, 2012). As a result, in 1996
he, too, was dismissed in favour of Gil Amelio (Nair and
Quay, 2012). Gil Amelio, tried to transform the company
by implementing new programmes and instigating
numerous dismissals (Nair and Quay, 2012). Nonetheless,
in 1997, Steve Jobs was reinstated as the firms CEO, who
initiated the change in the gadget technology we have
today (Isaacson, 2012). Unfortunately, he passed away in
2011 and Tim Cook is in charge for the company until
today (Tar, 2013).

Figure 6. Tim Cook in the

cover of Times magazine
(Public Domain, 2016)

4.2. Leadership Approach

Steve Jobs was the CEO who revolutionized the organization from its core, after
he retook control in 1997 (Isaacson, 2012). His leadership style is characterized
as an integration of all three types depending on the circumstances, since he
was a visionary leader (Kutsar et al, 2014, Rauf, 2014, Nair and Quay, 2012).
When he returned he focused and simplified the procedures in the production
process but also, took into consideration the creative proposals of his
subordinates, giving them the freedom to conceive innovative ideas
(Isaacson, 2012).
Tool

Assessment

Support

Myers-Briggs

ENTJ

Possessed vision, meticulous planning,

Type

(extraversion,

natural leader qualities,

Indicator

intuition,

and took charge

thinking,
judgment)

12

Carried out plans, regardless of fierce

opposition

Apple Inc. Analysis

Surveyed every department and product
Fiedlers

Task-Oriented Intimately involved in task progress

Contingency

Leader

Regularly

Model

evaluated

employee

task

progress
Struck deals to achieve task-oriented
goals

Leadership

Authority-

Promoted the need for efficiency with

Grid

Compliance

low regard for employees

Management Set goals based off of preference

Employees often worked extended hours
to achieve goals
Vroom-Jago

Autocratic

Made most decisions

Contingency

Capitalized upon strengths

Model

Delegated based on weaknesses

Tuckmans

Adept

Group

forming,

in Presented clear goals

Followed

every

component

of

Development storming,

completing goals by taking an

Model

norming,

active role and ensuring the team

performing,

worked together

and
adjourning
Trait Theory

Definitively concluded goals, following

completion

Independent

Proposed new projects

thinker,

Radical ideas changed the market

courageous,

Set intrinsic and extrinsic rewards

motivator,

Set weekly meetings and was intimately

proactive

involved in the progress

of products

Table 3. Steve Jobs Leadership Analysis (Kutsar et al, 2014)

On the other hand, John Sculleys approach is considered more autocratic

(Nair and Quay, 2012). Unfortunately, even though he was an exemplar choice
for the firm at that time he did not manage to face the competition effectively
(Nair and Quay, 2012). Whereas, Michael Splinder was a strong advocator of
expanding globally but was dismissed early (Yoffie and Baldwin, 2015).
Following that, Gil Amelios stay was brief as well but his influence was great

13

Apple Inc. Analysis

(Nair and Quay, 2012). The style he favored was autocratic and systematic, he
sacked a number of employees and recommended strategies that promoted
them in the Internet and audiovisual fields (Nair and Quay, 2012).
When Tim Cook took over in 2011, an amount of Apples staff quit their jobs
because they could not imagine the firm without its visionary leader (Nair and
Quay, 2012). However, the company continues to prosper financially, the
revenues between 2011 and 2014 increased by 70% while the stock market
price at the same time frame doubled (Yoffie and Baldwin, 2015). Moreover,
his leadership method is thought to be autocratic by some but democratic by
others, since, innovative devices such as Apple Watch and Apple Pay continue
to be produced this integration of styles is considered effective in the
organization (Yoffie and Baldwin, 2015, Nair and Quay, 2012).

14

Apple Inc. Analysis

5. Controlling
The controlling function of management is the most important because here
you see the results of the three afore mentioned functions: planning, organizing
and leading. In the controlling process, managers keep a close eye on people
and their performance of the job, and then assemble and interpret the
information and make any corrective changes that need to be made. Nothing
is guaranteed to go as planned, so plans must be adjusted and improved to
ensure future success. (Schermerhorn, 2010).

5.1.

Controlling Mechanisms

The first step to controlling process involves set a quantitative evaluation

process on the execution of future objectives. Apple's current goals are
constructing and growing their retail and online stores, operating systems and
innovative products.
The second step is measuring the measurement of the current performance of
the objective. Their performance standards are assessed by the following
criteria:
1. Revenue per Square Foot - productivity of Apple Stores (Rowland, 2015)
2. Product Units per Time - productivity of Apple suppliers and supply chain
(Rowland, 2015)
3. Milestone per Time - productivity of Apple employees in product
development (Rowland, 2015)

On the third step, they make a comparison of the current performance and
execution of the goals opposed to the criteria (Jones and George, 2015,
Schermerhorn, 2010). If the outcome is positive managers may change the
assessment criteria making them more adaptable to more challenging
situations. Moreover, a bonus may be given to celebrate the successfulness of
the endeavors (Jones and George, 2015). However, if the performance does

15

Apple Inc. Analysis

not meet the standards, then corrective steps may be followed, for instance, if
the Apple retail stores do not procure enough revenue, then the managers
should research the problems and act upon them (Jones and George, 2015).
Lastly, the fourth step includes the exact corrective measures the firm might use
(Schermerhorn, 2010). If a negative outcome occurs in the long-term,
managers may decide upon altering the whole infrastructure of the firm (Jones
and George, 2015, Schermerhorn, 2010).

16

Apple Inc. Analysis

6. Conclusions & Recommendations

After Steve Jobs passing many were frightened for the companys future,
speculations were on the negative side and even employees resigned in fear
of the upcoming circumstances (Yoffie and Baldwin, 2015). However, the
company by applying its unique and tested planning strategy continued to
grow even further and stay on the lead, in the aggressive and highly
competitive industry of personal communication (Yoffie and Baldwin, 2015).
Only, in 2015 three distinctive and innovative devices were launched (Yoffie
and Baldwin, 2015). If Apple Inc. manages to continue differentiating their
products and keep the costs of manufacturing reduced the growth will be
perpetual (Yoffie and Baldwin, 2015).
Nonetheless, there are further enterprises the firm may pursue. For example,
customized smartphones for business people could be built, with extreme levels
of protection, guarding them from not only online espionage but also
corporeal (Frank, 2015) by further developing the existing fingerprint option or
creating a new one. Additionally, the firm could co-operate with its main
competitor, namely Microsoft, and create a monopoly (Frank, 2015).
By employing these plans, however, the firm should be aware and cautious not
to divulge main components that provide its competitive advantage. For
instance, the know-how of operating systems. Moreover, a meticulous market
research is advised to be utilized before allotting resources in the
manufacturing of a customized smartphone.

17

Apple Inc. Analysis

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Apple Inc. Analysis

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Apple Inc. Analysis

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https://managementofapple.wordpress.com/motivation/ [Accessed 1st

January 2016].
Yoffie, David B. and Baldwin, Eric (2015). Apple Inc. in 2015 [Case Study].
Boston, Harvard Business Publishing, 2015. pp. 15-30. Available from:
http://secure.expertsmind.com/attn_files/1341_Apple.pdf [Accessed 1st
January 2016]
Yoffie, David B. and Baldwin, Eric (2015). Apple's Future: Apple Watch, Apple
TV, and/or Apple Car? [Case Study]. Boston, Harvard Business Publishing,
2015. pp. 1 Available from: https://hbr.org/product/recommended
/an/716401-PDF-ENG?referral=02542&cm_vc=rr_item_page.rr1 [Accessed
1st January 2016]

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Apple Inc. Analysis

8. Appendices
Appendix 1. SWOT Analysis Apple Inc.
After having decided on the future goals and missions, the next step in the
strategic management process would be to examine the organization and its
environment using SWOT analysis, which serves as a tool to determine the right
strategy a company should follow by setting forth its internal strengths and
weaknesses along with external opportunities and threats. (Schermerhorn,
2012).

SWOT ANALYSIS
Strengths (Internal)
-Strong

Weaknesses (Internal)

brand image

-High prices

-High profit margins

-Limited distribution network

-Effective innovation process

-High selling prices

-Marketing

-Sales limited mainly to high-end

and

advertising

capability

market

- Strong financial performance

Opportunities (External)
-Aggressive competition

-Distribution network expansion

-Imitation

-Rising demand for tablets and

-Rising labor cost in countries

where Apple plants are located

22

Threats (External)

smart-phones
-Creation of new product lines

Apple Inc. Analysis

Internal Strengths
Internal Strengths represent the company's strongest pillars. (Jones and
George, 2012). One of many valuable asset of Apple is its brand image. This
SWOT analysis depicts that is able to extract profit by way of its brand image.
Furthermore, Apple's pricing strategy allows it to gain a significantly great profits
because it enables flexibility for price adjustment ( See profit margins below).
Innovation is a great strength of Apple too, because it enables it to gain a
competitive advantage towards its competitors and always be on the cuttingedge(Smithson, 2015). Apple, in addition, is one of the most profitable
companies in the world, having a total revenue of $39.5 billion in 2014, 6.7%
more than the previous year (Kell, 2015). Its exceptional marketing and
advertising capabilities contribute to the overall brand awareness (Jurevicious,
2016).
2012

2013

Change

2014

Change

2015

Change

from

from

from

2012

2014

2014

Apple

1.1

10%

1.2

9.1%

1.8

50%

Samsung

4.3

3.8

(11.6)%

3.6

(5.7)%

1.6

2.6

38.5%

2.3

(11.5)%

17.8%

Amazon.com 2

2.4

20%

3.3

37.5

1.9

Google

2.4

20%

Electronics
Microsoft

Table 5. Marketing and Advertising, Budget (Jurevicious, 2016)

Apple invested only 0.77% of its total revenues on advertising in this context and
brings back a higher revenue than its competitors. This depicts not only the
Apple's capabilities in marketing, but also shows that Apple spends its money
more effectively than its competitors, and get greater in return not only in the

23

Apple Inc. Analysis

profit context, but also contribution to its overall brand image and value
(Jurevicius, 2016).
The strengths of Apple are quiet difficult to contend with, and therefore they
justify its perpetual on top position (Smithson, 2015).

Internal Weaknesses
Internal weaknesses are the ones that hold back a company from performing
well and need to be addressed (Meyer, 2015)
One of its inadequacies is closely linked to an aspect of its organizational
culture that is secrecy. Apple scrupulously chooses its sellers of its merchandise.
This enables control over distribution, but confines its market reach. Apple is
known for its high prices. This confines most people to buy the product and the
large majority of the market belongs to the lower classes. This may increase the
need for substitutes (Meyer, 2015).
Therefore, according to the analysis, the high prices and limitations on
distribution may impose restrictions in the business (Meyer, 2015)

External Opportunities
The external opportunities section addresses the opportunities that the
company can choose to exploit. These opportunities affect strategic route of
a corporation. Apple can exploit the opportunity to enlarging its distribution
network, which would effectively address the company's weakness in this point
and enable it to reach a larger number of customers. Also, Apple could get
into new product lines, as they have done with the Apple Watch (Meyer, 2015).
Furthermore, they could start producing Apple TV and Apple car. These two
new products are pose great opportunity and have potential to happen, but
not without their challenges. The television industry is facing great consumer
dissatisfaction due to online streaming, cable packages, etc. But could Apple
come up with a breakthrough and solution here too? Also the expenses and
engineering challenge make getting into automobile industry a bit risky (Yoffie
and Baldwin, 2015)

External Threats
24

Apple Inc. Analysis

External threats are possible events or forces outside the companys control
that can harm the company's overall financial performance (Meyer, 2015). The
aggressive competition that it faces is partly due to the aggressiveness of the
companies. Apple competes towards companies such as Samsung, who also
implement the innovation strategy. Because of this competition, it is crucial that
the company has the basis to for upholding its competitive advantage.
Furthermore, Apple risks the threat of imitation that generated because of the
large number of companies that can copy its products. The increasing labor
costs in China, for example, can cause the reduction of the profit margins or
even the increase of prices themselves (Meyer, 2015).
Therefore, the analysis shows that the company faces potential threats
because of what could cause damage and harm to the company (Meyer,
2015).

Recommendations Based on Apples SWOT Analysis

According to the SWOT analysis, Apple can employ the major strengths that it
owns to effectively tackle its weaknesses and also utilize them to make use of
the company's potential opportunities. Furthermore, Apple can use its
exceptional brand image and innovation to get into producing new and
innovative product lines. However, the company also stands in front of many
threats and with the threats that it faces, an appropriate course of action
would be to tackle these threats using a stronger patent portfolio together with
innovation to ascertain a competitive advantage even under threat (Meyer,
2015)

25

Apple Inc. Analysis

Advantages

&

Disadvantages

of

Apples

Organizational Structure
Strong Control. The hierarchy in Apples organizational structure supports strong
control over the organization. Theoretically, hierarchy empowers top leaders
like Tim Cook to control everything that goes on in the organization. Through
the hierarchy, function-based grouping and product-based grouping in this
organizational structure, Apple ensures that Cook and the senior VPs control all
organizational processes. (Meyer, 2015)
Limited Flexibility. Apples organizational structure has the downside of low
flexibility. Hierarchy typically prevents lower levels of the structure to flexibly
respond to business needs and market demands. However, Tim Cook has
already made slight improvements by increasing collaboration among
different parts of the firm. Still, Apples organizational structure does not support
rapid changes because everything must go through Tim Cook and the senior
VPs. (Meyer, 2015)

Appendix 2. Porters Five Forces Model Apple Inc.

According to Schermerhorn (2010), Porters Five Forces Model is a forecasting
analysis, used in the second level of planning, where internal and external
environmental threats are evaluated. The threats are the power of both
suppliers and consumers, the availability of substitutes in the industry, the
possibility to enter the industry and the main factor the competitors that exist
(Schermerhorn, 2010). Moreover, it provides the help needed to make strategic
choices and analyze effectively the present conditions (Jones and George,
2014).

26

Apple Inc. Analysis

Figure 4. Apple Inc. Porter's Five Forces Model (Loizos, 2013)

The industry competition is extremely aggressive in the technological field due

to low switching costs (Dudovskiy, 2015, Ferguson, 2015, Maverick, 2015). As a
result, the industrys main competitors are companies such as Google Inc.,
Samsung Electronics and Amazon Ltd. (Dudovskiy, 2015, Ferguson, 2015,
Maverick, 2015).
Moreover, again due to the low switching costs customers power is excessive
(Dudovskiy, 2015, Ferguson, 2015, Maverick, 2015). As far as Apple is concerned
it does not affect them greatly since the innovative products and services are
keeping them afloat and prospering (Dudovskiy, 2015, Ferguson, 2015,
Maverick, 2015).
Since, entering this particular field requires not only high initial capital but also
specialized know-how, it is neither easy nor applicable to enter the industry
(Dudovskiy, 2015, Ferguson, 2015, Maverick, 2015). Furthermore, the ability to
acquire brand recognition and brand name are another factor of the
difficulties new businesses face (Dudovskiy, 2015, Ferguson, 2015, Maverick,
2015).

27

Apple Inc. Analysis

Additionally, the negotiating influence of suppliers is weak within this market,
since there are numerous competitors and high demand of establishing
business relationships with a prestigious company like Apple Inc. (Dudovskiy,
2015, Ferguson, 2015, Maverick, 2015). This enables Apple to choose the
suppliers it desires with, relatively, reduced cost, instead of the suppliers
choosing whom to work for (Dudovskiy, 2015, Ferguson, 2015, Maverick, 2015).
Lastly, substitute goods and services do not affect Apples revenue throughout
the last ten years, as the brand recognition they have established and due to
the fact that they are offering a complete and exclusive customer experience,
from the Apple stores, in which the merchandise is promoted and the unique
operating systems to the after sale support (Dudovskiy, 2015, Ferguson, 2015,
Maverick, 2015, Issacson, 2012). The rivals or new entries have to compete not
with a stand-alone product but a whole system (Dudovskiy, 2015, Ferguson,
2015, Maverick, 2015).

Appendix 3. Fiscal 2015 Apple Inc. Financial

Performance

Figure 4. Apple Inc. Financial Performance (Apple Inc.,

2015)

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Apple Inc. Analysis

Appendix 4. International Market Presence & Planning

The Company deals with its business essentially on a geographic premise. The
Company's reportable working sections comprise of the USA, Europe, Greater
China, Japan and Rest of Asia-Pacific. The Americas portion incorporates both
North and South America. The Europe section incorporates European nations,
and, in addition, India, the Middle East and Africa. China, Hong Kong and
Taiwan are incorporated within the Greater China fragment. The Rest of AsiaPacific portion incorporates Australia and those Asian nations excluded in the
Company's other reportable working fragments. Albeit, each reportable
functional portion offers identical software and hardware items and
comparable amenities, they are overseen independently to better adjust to
the area of the Company's clients and dissemination accomplices and the
unique business sector flow of each geographic district (Apple Inc., 2015).
Consequently, it is evident that the company utilizes many market penetration
strategies (Apple Inc., 2015). To begin with, they are franchising and licensing
the Apple retail stores, secondly, they are outsourcing since the manufacturing
part of the production process is operated in Asian countries, and lastly, they
are exporting their devices and operating systems globally (Apple Inc., 2015,
Schermerhorn, 2010). Thus, by applying these methods they have not a direct
involvement in the ownership of their transcontinental operations (Apple Inc.,
2015, Schermerhorn, 2010).

Appendix 5. Employee Motivation

Motivation is a process by which a person's desire or willingness is directed
towards achieving an objective goal. Abraham Maslow's Theory of needs is
being used by Apple managers, who have analyzed how needs fit into task
design, payment and managerial technique and formed managerial methods
(EssayUK, 2012)
Apple fulfills its employees' basic needs by providing them with a monthly
salary. Additionally, they provide numerous financial incentives such as, saving
plans, investments, etc. Secondly, Apple fulfills the safety need by presenting

29

Apple Inc. Analysis

its employees job security, pension or retirement advantages and a safe work
habitat. This makes them feel safe and secure. Thirdly, it satisfies their social
needs by making them feel as if they are a part of a community. In addition, it
satisfies their esteem by fostering a respect for oneself and for others around,
and also give recognition and applaud them for their work. And finally, Apple
Inc. fulfills its employees' self-actualization needs. This part is closely linked to
Steve Jobs way of commanding and how he pushed people to follow a certain
direction and towards certain objectives. As an example can serve Steve Job
and Macintosh incident. When Jobs left the company, Mac began its decline
in profit and direction, but as soon as Jobs returned it quickly returned to its
former position and profitability. All in all, motivation stirs and inspires hard work.
Apple has managed to keep its employees loyal and motivated, which is very
important because the work done by employees will determine the success of
the whole company. And look where Apple is today! (EssayUK, 2012).

Appendix 6. Apple Inc. Workplace & Corporate Culture

According to a former employee, Jordan Price, who worked as an app
designer, has criticized the corporate culture for its inflexibility of the working
hours that never afforded him the time to spend with his daughter; the frequent
meetings held made the work less productive and the criticizing and
degrading behavior of the managers. Many have criticized the firing of
employees after a short time, once they were worn out completely. The low
pay-check also bothers most of them because the workers see what they earn
and compared to that amount, the amount they pay seems too low (Biddle,
2014). However, it is stated that Apple provides above average pay-checks
when compared to its competitors. Aside from everything, many employees
still as an unparalleled experience that they would never forget. Working for
the world's fastest growing industry has its perks. (Denning, 2012) Apple's annual
reports are full of firings or resigns, but rarely anyone speaks out because they're
either afraid or simply adore and revere the company too much to criticize it
(Biddle, 2012). Jobs' often appalling and dictatorial behavior was forgiven
because, in the end, it was for a greater good. However, eventually, the
majority of the employees deemed their job at Apple as the ultimate

30

Apple Inc. Analysis

experience, and despite the long hours, the belittling, and low pay-checks
most of them would not have changed it for anything in the world (Denning,
2012). However, these answers make an improvement in the corporate culture
almost demanding. Changes that would be greatly appreciated.

31