UNIT 1

C&D COURSEWORK
Giulia Galo
Ms Krasniqi

Assignment C&D:
Chosen business: Apple
Task 1:
1. External environment:
a) Political:
o VAT tax: VAT tax affects Apple in a few ways. When Apple sells its products, it needs to include
VAT tax in the price. So customers end up paying more for Apple products due to added VAT .
Apple also needs to pay VAT on the goods and services it purchases for its business operations.
This can impact their costs and potentially affect their pricing strategies. Overall it can affect
Apple’s pricing and profitability.

The facts about Apple’s tax payments - Apple (UK)

o Income tax: Apple as a company is required to pay income tax on its profits. The amount they
pay depends on the amount they earn and the tax laws within the countries they operate in. It
can affect their bottom-line profitability as it reduces the amount of money they get to keep
afterwards. However, Apple likewise any other business may also take advantage of tax planning
strategies to minimise their tax liability within the boundaries of the law.

o National minimum wage: this affects Apple in terms of their labour cost. If the minimum wage
increases, Apple may need to their employees higher wages which could impact their overall
expenses. This could lead to increasing prices or lower profit margin for Apple. However, is
important to consider that Apple is a global company, and minimum wage laws vary across
different countries and regions. So the specific impact of the national minimum wage on apple
would depend on the location and the specific minimum wage regulations in that area.

o Trade union involvement: trade unions represent the interests of workers and it means that
they can negotiate for better wages, working conditions, and benefits. This can lead to improved
employee satisfaction and productivity. On the other hand, Trade union can demand higher
wages, which could increase labour costs for Apple.

o EU rules and regulations: this affects apple in the sense that, the EU rules and regulations are
not the same than the rest of the world. For example, Apple recently has changed its chargers
on the new iPhone 15 from lightning to USB-C, and so the EU made a legislation that says that
apple has until the end of 2024 to change their chargers back to what it was.

iPhone charger type.

EU laws and regulations affects on Apple.

 o Immigration: this could have several effects on Apple. In the EU you are only allowed to work if
you have an EU passport and or permission to stay and work with in the country (settlement). In
the UK unless you have a British passport or settlement you are allowed to stay and work. This
means that if Apple employs a person on which they do not have the right to work in the
country it means that they are taking a risk on the immigration officers to check their workplace
and get caught which could be a big damage for Apple. However, Apple can bring individuals
around the world which allows people to bring in ideas for the business and diversification of
skills and different perspectives to the company. It contributes to innovation and creativity
within Apple’s workplace. It could also help with filling in skill gaps and address labour shortage.

b) Economical:

o Fiscal policy: fiscal policy refers to the government’s use of taxes and spending to influence the
economy. It can affect Apple in a few ways. For example, changes in tax rates cam impact their
profit and their cash flow. If rates increases it could reduce Apple’s after-tax earnings. However,
government spending can also influence Apple indirectly by stimulating economic growth which
can increase consumer demand for their products. Overall it has a direct and indirect effect on
Apple, which can either be positive or negative depending.

what is fiscal policy in business - Search (bing.com)

o Monetary policy: This means that when interest rates are low allows apple to borrow money on
which can help them fund their operations and investments. And also low interest rates can
stimulate customers to buy more as that mean that there will be a higher demand for Apple’s
products. However if interest rates are high customers are more likely to save more and spend
less which affects Apple’s profits.

how does monetary policy affects apple? - Search (bing.com)

o Supply side policy: the supply side policy affects Apple as it stimulates economy growth this can
mean that if the government decides to do a tax cut for Apple it might incentivise them to spend
and invest on the business more as they will have more capital, for Apple this might mean that
they can invest in China as that is where they get their products from, it is where their factory is.

supply side policy for the phone market - Search (bing.com)

 o Economic growth: Economic growth in the countries that apple operates in is a positive thing as
it leads to an increase in demand for their products. If the economy in China is growing it is likely
that more people will be able to afford the products. This all leads to an increase of sales
revenue and profit for apple. However, having a high economic growth can lead to inflation
which may stop people from buying besides from increasing apples costs.

how does economic growth affect a business - Search (bing.com)

Apple PESTLE Analysis (2023) (businessmodelanalyst.com)

o Exchange rates: fluctuation in exchange rates can impact Apple’s profitability as their products
are sold worldwide and so there are multiple currencies they need to look at. For example if the
US dollar falls against the Euro it means that it would be more expensive for Europeans to buy
apple products than Americans. It also affects demand and cost of supply as apples products
comes from China their economy is also something to be taken under consideration.

how does exchange rates affect business - Search (bing.com)

Apple PESTLE Analysis (2023) (businessmodelanalyst.com)

c) Social:

o Changing demographics: this affects apple behaviour as the countries that apple is operating in
is constantly changing with an increasing number of people moving to live in urban areas . This
however is a positive thing for apple as they more popular in urban areas rather than rural.
Another point to be made is that Apple’s strategy is to make gender neutral products as this
allows anyone to buy and not specifically target anyone but who likes their products and it is
willing to pay the price for it.

Apple PESTLE Analysis (2023) (businessmodelanalyst.com)

https://businessmodelanalyst.com/apple-pestle-analysis/

o Changing customer preferences: this is affecting Apple as people are becoming more aware of
the environment and what is happening to the world so things such as climate change which
means that people are looking for more sustainable and ethical products. This then could be a
challenge for apple which means that they need to change their plans or strategies to make sur
they are meeting with customer preferences and for that as well targeting potential new
customers. An example of one of the changes they already made is that customers were
complaining about their high use of minerals and so apple has taken steps to reduce that in
order to meet with their customers preferences and so not to loose those customers.

Apple PESTLE Analysis (2023) (businessmodelanalyst.com)

 o Social responsibility: Apple is being socially responsible by influencing people with accessible
technology as a part of their business plan to keep customers. The influences that apple has on
social media shows that they are leading the technology market as they well trusted by many
customers as we see celebrities using that brand. They also committed to be social responsible
by being a force for equity and opportunity, creating an inclusive and diverse workplace and
lastly by respecting people’s lives and human rights. This shows that apple is well concerned
about their customers and how they are doing by actually not only supporting them but also
making sure that even though they influence people with technology they also know the risks of
it.

how is apple being socially responsible - Search (bing.com)

d) Technological:

o Production and packaging processes: Apple’s packaging is strategic as it is clean and they use
neutral colours.

o Internet:

E) environment:
o Waste disposal: Apple has to take into consideration their waste disposal of their electronics so
they can do it in the best way possible without making much of a pollution. They have taken
some measures to try this out for example, trade in; in a customer wants to buy a new iPhone
however they don’t know what to do with the other one they can give their old one to apple
and so exchange it for credit. This is then affecting the environment as the phone batteries and
things they use are somewhat contributing to climate change because of their release of CO2.

o Environmental sustainable: Apple has to ensure that as customers are becoming more aware of
sustainability and how plastic and pollution is affecting climate change, Apple has the obligation
to keep up with these changes as much as possible in order to keep sustainable and innovating.

Apple PESTLE Analysis (2023) (businessmodelanalyst.com)

f) Legal:
o Data protection law: Apple has to make sure that they are complying with this law as it keeps
changing all the time. This means that they have to regularly look at each of the countries they
 operate in if any of the data protection laws are changing so they can change it from their device
as well. This then goes on to Apple not being fined in case they don’t follow with these laws.

o Data privacy regulations: as well as data protection law is changing so is data privacy. This
means that Apple also need to keep an eye on this. As many countries it is becoming stricter
each time with these regulations so they don’t end up fined from the government.

o Apple also need to make sure they are complying with any regulations changes and simple
changes in the countries. In 2021 Apple got taken into court for their overcharge of the way they
charge the apple store. This then affects them as they lost lots of money as they lost the case
and so they had to lower their app store prices. This then might look bad for Apple as they
would then have less people buying form their apple store.

Apple charged over 'anti-competitive' app policies - BBC News

2. Internal environment:

g. corporate culture:
Apple has a corporate culture of “creative innovation”, this focus on them focusing on maintaining a
high level of innovation that involves people being creative within the workplace and have a mindset
that challenges their standards such as in consumers electronics designs.

As they are a technological business, employees are encouraged to think outside the box, amongst a
competitive industry. Apple does not set their goals based off what is happening with their competitors.
Even though their goals are not based in competition they are still required to look at the levels of
competition as they need to take that into consideration anyways, so that they can drive growth and
improve output. Apple has reduced the competition they has, as for they can have a more teamwork
and collaborative workplace. Apple is also known for only employing outstanding people as the
companies leaders are known for firing people that they don’t this is adding or not making a difference
in the business. It promotes growth as it is an organisation that is well known for their technological
products and for their marketing and product design.

Apple truly believe in teamwork which means that they value the power of team collaboration and how
that encourages them to be productive. The structure of Apple activities is similar to a start up and there
is no committees and different heads for different departments and products. employees had a 3 hour
meeting every week on which the expectations and progress is talked about. Employees trust each other
with the quality they produce and so they are allowed to do it with minimum supervision. Steve Jobs
made sure that the company was run based of ideas and not hierarchy, this then allows employees to be
creative, share and contribute to the business.

Apple’s Company Culture: An Organizational Analysis - Palmore Institute

Inside Apple’s company culture: Collaborative and inspiring (grovehr.com)

h. corporate social responsibility:

Apple’s corporate social responsibility strategy is a set of policies and practices that aim to satisfy its
stakeholders’ interests and address environmental, social and ethical issues. The strategy focuses on
sustainability and excellence in corporate citizenship. It also includes specific initiatives such as
responsible sourcing, social impact and ethical code of conduct. Apple’s CSR (Corporate Social
Responsibility) strategy is intended to create a win win situation for the company and its stakeholders.

In the division of the CSR Apple mainly prioritizes customers as one of their top stakeholders groups.
This is composed of individuals and organisation buyers of the company’s consumer electronics and
online services. Customers are interested in the effectiveness of the products and if it is all that people
talk about and comment on the internet. Relating this to the CSR customers are the ones who seeks
appropriate pricing and quality in e-commerce and in store operations. Apple uses the premium pricing
strategy to attract customers, considering the quality and aesthetics of the products this pricing suits
them as they aim at the people who wills to pay a high price at the beginning just because of it being a
new launch. Another thing is that customers are also looking at privacy and security. As Apple is seen as
a known company and many people use it they have always taken into consideration privacy and
security updates so they don’t loose on customers or on mistakes that they could have on the updates.
Addressing there customer concerns in the development and in the CSR shows responsibility towards
their items.

Employees are major stakeholders in the manufacturing approach to corporate social responsibility. This
stakeholder group’s interests include proper compensation and career development, which are linked to
apple’s corporate structure and initiatives for addressing human resource management (HRM) issues in
multinational business. The company’s HRM policies and programs, satisfy this stakeholder group
through compensation packages that are competitive and attractive in Silicon Valley and beyond. This
means that employees have a big play on it as well as the products depend on them and so if there is
any misfunction on the product it lays back onto them. This also means that they are a bit more
responsible for what happens in the business than others.

Even though investors are stakeholders focused on financial performance, Apple’s sustainability and
environmental or ecological programs also matter. In corporate social responsibility, sustainable
business practices make the phone company more attractive to customers and the business partners.
This factor contributes to Apple’s competitiveness against other information technology and consumer
electronics firms, such as Google (alphabet), Samsung, Microsoft and Sony, as well as companies that
compete with Apple TV Plus video-streaming services, like Disney, Netflix, Amazon and Facebook (meta).
IBM and Intel, which operates in computer technology, artificial intelligence, and related services, also
influence Apple’s policies and programs for CSR, ESG, sustainability, and corporate citizenship. These
companies challenge Apple’s dominance in the market and impose high standards in CSR, ESG, and
corporate citizenship. Satisfying the interests of investors as a stakeholder group involves initiatives and
strategies for competitiveness and profitability, along with the satisfaction of corporate social
responsibilities, with other multinational technology firms. This all means that the investors have loads
of responsibility over the business and so it is the part that it shows where the business should dedicate
more in as they need to see which of their sales are going down. For example if the apple tv streaming
sales start to fall they need to come up with a plan to try put those sales up.

Apple has interacted with many CSR’s which means and shows that the business is quite organised in
terms of the responsibilities they have and that is distributed. This then shows us that there are benefits
and drawbacks to each one. Customers are good because they are the ones who is most interested on
the business so therefore Apple needs to know the customer expectations as they provide a good and as
Apple has surprised customers so many times they don’t expect anything different from each year.

3. Competitive environment:

Apple is considered to having a competitive environment as their corporate approach has resulted on
that and not only high competition between companies but also other industries. What makes Apple
stand out is the fact that they have their unique software layout which is the IOS. This is different from
their competitors as they are not androids and so it makes it all similar. This difference has helped apple
to lead ahead of rivals in the industry.

Apple operates in a very dynamic way and in a competitive environment as a technology company. The
competitiveness is due to the fact that while other businesses are entering the markets, apple is
innovating already. Almost as if apple was always one step ahead of other businesses. Technological
advances though has made it harder for companies to innovate because on the new enterprises
capabilities. As a result apple’s main competitors keeps growing with the new entrants emerging
virtually every year.

Competitive advantage refers to the factors that allows a company to produce goods at a cheaper price,
better products, because of their position and so paying cheaper than their rivals. These factors allows
the productive entity to generate more sales or have higher margins compared to their competitors.
They are based off many things however, theses factors includes; cost structure, branding, the quality of
product offerings, distribution network, intellectual property and customer service.
Apple does have competitive advantages. These things include product differentiation, brand value,
customer loyalty, innovation and research & development, supply chain management, marketing,
advertising strategy , retail strategy, financial strengths and resources, challenges and future outlook.
This then goes on forward on looking at each of them and how that is an advantage for Apple.

Product differentiation is an advantage for apple because their success is in part because of most of its
goods are a one of a kind. People knows apple products because they meet what it says it has and so
they also looks nice. It stands out for the hardware, software and their services. Everything that apple
offers follow the same pattern, their iPhone, iPad, iMacs, iPod, all part of the same thing. Apples
technology of iCloud and apple music. When a business meets the expectations of their customers they
are building a customer loyalty wit each customer as the products are making them satisfied.

This then leads us to talk about brand value and customer loyalty. The company is known worldwide for
their commitment to market studies and so this allows them to understand exactly what customers are
expecting of Apple as a company and them being as a customer and what they are expected to deliver
with their goods. Apple customers are very loyal, usually if a customer is satisfied with an iPhone they
are more likely to carry on buying the apple products like the iPad or the iMac and also Airpods. This
then gives them an advantage as they making their customers to being loyal to them and so they not
buying off any other brand.

Apple's Innovation and research and development sector is one of the most important to them. They
spend quite a large amount of its budget on the research and development sector which leads to some
amazing innovative products. Throughout the time they have come with some great ideas that we still
know it nowadays such as the iPhone apple watch iPod etc. Thie recent innovation is the VR headset
called apple vison pro which will come out in 2024 and has been becoming a big thing already. This
product makes apple stand out from their competitors as no one has thought or started planning that.
This also allows apple to enter a new target market as it is a different technology they have came up
with that their normal competitors would not invest in.

Apple's Supply change management allows them to stay ahead of competitors most of the time as they
have a good supply chain. This works as apple can always get the parts it needs and get finished goods
to costumers quickly. Apple does this so they know that their products are high quality and so by using
this type of approach apple improves their production processes, cuts down costs and give themselves a
better competition by allowing their products to come out quickly. The way they manage their supply
chain shows that they will less likely run out of stock or have goods becoming obsolete. Because of how
well this works out for Apple they are able to make new products and meet customer wants quickly.
Apple’s success has a huge part to do with their marketing and advertising strategy and their
promotional efforts. The company really looks out to innovate on their marketing when it comes to
promote their goods and services. Apple's method for reaching their target market is including social
media and prominent people. By forming partnerships with people Apple is able to spread their
message around to a large group of people and improve their image brand even more. Their marketing
focuses on bringing emotional sides to it and making aspiration messages around too. This helps the
campaign to be eye catching as it shows that they are innovative with their products as it is also seems
like they are special and worth the value they pay for the product.

Apple's retail approach differentiate the business and makes Apple stand out from their rivals.
Customers like buying at the apple sore because of the good customer service they receive and because
of how good the store looks. It’s a clean, minimalist, neutral coloured store which so it matches how
they want costumers to feel about the products and how their expectations impacts that. Apple
manages to have the same layout in every store they have anywhere in the world they operate in, and
so this is a benefit as it shows that apple is able to keep up with their standards and operate in the same
way in all stores with no differentiation.

Apple's competitive side is based off their financial stability and resources, as they have a standing and
persistent high profitability, they are able to invest in strategic acquisitions that the business could
possibly have. For example de Apple VR glasses that is about to come out in 2024. This is a benefit to
them as it shows how much they are spending on improving and innovating and this then helps them
being competitive by entering the different markets segments there is in the technology sector. Apple is
able to continue with a worldwide technological leader because of their robust financial position which
allows them to be more strategic allocation of resources, growth of possibilities and support of existing
operations.

Apple obviously like any other business faces difficulties and risks. The increasing level of competition in
the technology sector is really high and so it makes it an obstacle to Apple, this means that they need to
stay alert and so to defend their positions as competitors so they can constantly attempt to innovate
and acquire market share. Concerns have been raised up from apple as they rely all their profits mainly
on the iPhones and so they should be prudent and diversify rather than just rely on the iPhones. The
changing in tastes that the customers may be a threat to apple as there isn't much they can do to be
sustainable or keep up with their customers expectations. Therefore their competitors are also having
the same kind of risks.

Competitive Advantages of Apple Inc (thestrategywatch.com)

Task 2:
I have chosen to base my analysis on the Porters five forces and on the swot analysis. This is because I
think that is something that has to do with the business and it would be simple to explain about how
their competitors work and how that affects Apple. The swot analysis helps to understand the areas of
possible improvement of the business and how that is affecting them, it also shows the areas they are
performing well in. The porters 5 forces helps to assess the competitors of existing product lines and it
helps to adjust their competitive side of the business as well as explore new product ideas and evaluate
investments made and the possible opportunities.

SWOT ANALYSIS: (all information taken from this website)

Strengths:

Many of apple’s strengths includes having a strong brand recognition and loyal customers . As apple is
one of the best known brands in the world, they have a loyal customer base that is continuously growing
all over the world. This is due to the fact that apple has innovative products, good design quality and
they barely have complaints about their products. This then links to the second point on why this is a
strength for apple, their innovative products and services. They are known for pushing the boundaries
and creating innovative and unique products and services that often changes the industry. One example
of that is when apple created the iPod which came out as music players with a digital music player
however nowadays is part of our everyday lives, with the iPhone. Another example of the strengths
apple has is the fact that they have high quality products with unique features. This for customers
means that they have access to it across all demographics and any society worldwide as apple operates
in many countries around the world. Apple's aim on proving a good customer service and quality
products has meant that they have had loyal customers for time and so massive follows on social media.
Their product range is large, they go from iPhones, to iPads, MacBook's and much more of which targets
any age too, from kids to elderlies. They also aim on targeting people who uses it for more professional
work, so those people who is looking for the latest technologies possible which is only apple who
delivers that. It is impossible to talk about apple and not mention their leading technological edge. As
one of the most innovative technology giants of this modern era alongside with Amazon and Google,
apple continue to set trends when it comes to technology development. Apple also have a financial
strength and a high profitability, this is due to the fact that they charge a premium pricing. This means
that they set their prices high knowing that customers will buy because they provide a good service and
they trust apple with their electronic goods. They have also had markable feasts. In 2018 apple has
gotten the highest market capitalisation worth of $1 Trillion, making them the first American company
to reach such high numbers and so their income on that year was over $50 Bn. This shows that apple has
a large ownership of the technology market and also that their customers are satisfied with their
products and services as they are achieving such high numbers.

In conclusion, this all shows apple’s strengths being as mentioned above. This contributes to it as it
shows that customers are satisfied with Apple products and their service and also show that they are
meeting their customers expectations. This means for the business that they are doing a good job and so
not failing with tasks and it shows that the business is growing not only internally but also externally.
Overall it contributes to Apple’s success as they innovative and know how to work and meet the criteria
of their customers. They invest a lot on not only the products itself but also on market research as it
shows that they always up to date on what is coming out or even what is going to become, or could
possibly become, a trend. The fact that they have a strong brand recognition worldwide and they have a
customer loyalty shows that they are ahead of their competitors as usually when someone says that
they use apple products they usually never switch to androids or any other brand. This means that
customers are often curious and exited for the new launches that apple gives yearly. The fact that they
have customer loyalty also allows them to create a strong relationship with their customers.

Weaknesses:

Apple faces many weaknesses, one of them being having high prices for their products and services. As
Apple is known for their high quality products, they also come with a higher cost which is more
expensive than competitors. Most of, if not all, the products apple has is more expensive than their
competitors. This although also would include the software such as iCloud and iTunes for example. This
however, is a weakness as it leaves many potential costumers out as their prices are way higher than
others. A second challenge that apple face is that even though they very innovative they have lacked it
in the past few years, apple has not been very successful in innovating with their products like they have
done in the past. Rather than developing their existing products and bringing out different ideas to it
they have kept the same and just made minor changes to the updates. Another weakness is that apple
has high competition and so this leads them to often have legal battles with other technology giants or
patent holders over intellectual property rights or trade market disputes. This has been an issue for
apple as sometimes the same company tries suing them multiple times which then makes apple to fall
behind on trying to reach agreement, it also makes apple loose money and so it causes long term costs
and delays. Recently apple has been fined $19 million by the Sao Paulo state court, because of its
decision to remove chargers from the iPhone packaging. Apple has seen its market share reduce as
other competitors try to emerge. These challenges has mostly been coming from Samsung, Google,
Xiaomi and most of these brands of which offers an android type based phone. As these competitions
continue to grow, apple has been relying on their brand recognition rather than investing on research
and development or in their initiatives to remain ahead of the curve. This then means that while this
strategy has worked out for some time, apple should consider some other strategies as well because its
becoming evident that they are doing this and so it is not encouraging customers to buy, so this will not
be enough to them carry on growing and be ahead of rivals. Anoth thing that affects apple negatively is
that they have a limited customization option. This means that they can’t customise their products like
before. The apple dependence on the iPhone it means that they are only relying their profit on one of
their items, as apple is highly dependent on the iPhones. On top of this their profits is highly affected by
it. Because as the phones are not changing and so they don’t have many new features or changes,
customers are holding on to their phones for longer and not buying the new versions.

In conclusion Apple’s weaknesses is at their current lack of innovation. This is affecting their sales and it
is making obvious some of their marketing strategies. These overall shows Apple’s weaknesses
throughout what they are current doing. This although is the bad side of Apple it shows on what they
need to improve and so it shows the business that they need to re think about some of the things they
have been acting on. This then means that for competitors that even though they might be behind with
them being innovative it also means that they are doing a bit better than apple at the current situation
as apple is lacking to innovate and bring new updates and new features on to the iPhone and all their
other products. Overall their weaknesses shows that they are falling behind on some things and they are
not investing as much as before. The fact that they charge a higher price than their competitors as they
are well known are considered a premium brand as they are known worldwide, it shows that customers
might choose a cheaper brand of which they can use and store their things, and so use for music
platforms too. This all shows how apple is ‘failing’ as a business in certain aspects as they are lacking
some things that were necessary.

Opportunities:

Apple’s opportunities are the fact that they have a strong brand image it affects them as it allows them
to emerge onto new markets. Apple’s reputation is one of the most important for them as it is known
worldwide and so they are having high profits from that. This then makes this opportunities for them as
it means that they are enabled to enter markets easier. because of their brand image if apple does a
good marketing strategy consisting of different advertisements leading them to one make a high profit
out of it and two it will give them numerous opportunities in new regions. The fact that apple started
with the new virtual reality glasses and their augmented reality devices it has been two technologies
that have been gaining attention from customers and so they are getting big and well known around the
world. This then means that there is a high chance of it becoming a big thing for apple once it is
launched and make it a success. Both technologies are across the industry and so they are used for
educational purposes, entertainment, and even retail experiences. This has led many big brands like
Apple to explore ways of which they can incorporate those products into their brand and so it allows this
business to target other target markets and customers. By launching these products apple could
capitalize on an entirely new revenue stream while also expanding its existing fan base even further.
Another opportunity of apple is the increased focus on content streaming services. In these recent years
apple has put their focus onto content streaming devices in response to the rapidly increasing consumer
demand for the video and audio streaming. This has given them the opportunity of launching things
such as Apple podcasts, apple tv+ and even apple music. This means that apple was able to enter this
other competitive market and so they were able to capitalize on this growing trend which is the
streaming networks. With that because they have a large customer base they were able to quickly
stablish a dominant position in the market and so they had profit from these things quickly. Another
opportunity for apple is using artificial intelligence (AI). As AI is getting more known and its becoming a
popular trend it is shown that apple has had a strong focus on AI and creating Siri, which is their own AI
platform. With this rise of the learning technologies, apple has been able to create powerful AI
algorithms and so creating these personal assistants that understand users need and intentions better.
This then goes on to apple being also able to innovate technology and their products to stay ahead of
customers. We know that apple has always been innovative and been at the forefront when it comes to
this, however it still need to carry on with their market research so they can innovate and develop their
products even more. The growth on advertisement market means for apple that they should carry on
investing on it. This is because digital advertising is continuing strong upward trajectory due to
companies investing on social media. Apple has a discontinued program called the iAd advertising
program, it is a platform that is designed specifically for iPhone, iPad and iPod touch users that allow
advertisers to display ads across all IOS devices worldwide.
In conclusion apple has been having many opportunities to grown, expand and even enter new markets
recently however, they haven’t conducted enough research on those yet as we can see from this
analysis on their opportunities. This then means that apple is missing out on potential profits it could be
getting from potential customers and the different target markets it could be entering and achieving.
This affects the business as it might seem that they are reaching their full potential and so they might
not be meeting their customer expectations. Because apple is a well known company, customers have
high expectations and so apple has to make sure that they are meeting with these expectations.

Threats:

Apple’s main threat is that they always have to battle against counterfeit products. As apple products
are some of the most popular, this unfortunately means that often they have to contend with
counterfeiters. They often produce products with cheaper materials than what apple uses allowing them
to be sold at a much lower price. Those cheaper hardware tends to mean that the quality of the product
is reduced and customers may end up having a negative experience when using these products that are
not original. This can damage both the brand and customer loyalty when people realise they have been
scammed into buying inferior goods. Apple has actively trying to sue these companies however it does
persist as they continues to find was around the situation. Another threat is the increase in competition
in their various industries. This can be seen as one of the greatest risks that apple have faced in the past
years and so with these competitions coming from google and their android system, Samsung with their
smartphones or even including Spotify with their music streaming platform they continue to slowly take
over apple’s market share each year with products that are often cheaper than apple’s while still
offering similar or the same service, sometimes even better, than apple and it’s t a cheaper price than
what apple asks for in a particular feature set. There is also a threat of reduction in demand due to
economic turndowns. This is because as we are facing a recession period, people are saving more and
spending less, this then could significantly affect apple as demand for their products will fall this is due
to job losses or pay cuts experienced during these times. More economical factors would be rise in
interest rates as when interest rates are high people are also saving up more, this then affects apple as
the demand for luxury items drop and it reduces the profit earned by the business as overall revenues. A
big issue for apple is the backdoor mechanism, this means that the government agencies might be able t
have access to user data store on the iPhone through backdoor mechanisms and this is significantly
threatening to apple. The government attempts to force apple into unlocking new iPhone for law
enforcement and intelligence gathering purposes this though presents a huge vulnerability putting users
private information at risk when they do that. This is concerning to customer as they don’t know how
the data they provide is being used and so this is a negative point for apple as if there is any leak of
information from customers apple it could ruin apples brand image. To protect the customers from
these things apple has refused to provide any backdoor mechanism however there could be malicious
people who tries to get access to customers iPhone and so this would be exploited by bad actors. By not
providing this type of information apple ensures that its customers remain secure and that their
sensitive data is safeguarded against prying eyes.

In conclusion, most threats that apple faces is due to the fact of their safeguarding and the economical
factors that is happening both worldwide and in the country they operating in. This means that apple
has always to keep an eye on changes so they can try act and defend themselves as a business as much
as possible. This all then affects apple as they need to be carful on how they provide information and
that they need to know that as they a well known brand they are always at risk of any small errors
ruining with their brand image. They need to make sure they are trying to behave as ethically as possible
so that they are able to fulfil with the laws and regulations and have minor troubles possible. This for
apple means that their threats can be lowered and so they run less risks and that their threats can be
kept under control so they don’t affect the business directly. Overall apple has threats that they need to
keep an eye on so it doesn’t increase and so it does not get the business onto risks as they always being
watched. They need to make sure not to disappoint their customers with their expectations as this then
could lead apple to a failure.

Porters 5 forces:
Competition in the industry:

This is considered a strong force for Apple. The competitors analysis shows that many companies
directly compete with Apple, this includes Google, HP, Samsung and more. All the companies conduct
market research and development so they make sure they are delivering the best and innovative
product in order to gain market share. Switching between iPhone to android or vice versa it’s a low
moderate cost action so this means that customers don’t need substantial investment for it. Apple’s
competitors analysis shows the strong forces of competition in this industry. Apple’s competition is not
only in the technology sector but also in the streaming sector. They directly compete with Disney,
Amazon, Netflix and Facebook (Meta) as they compete with apple tv+. Overall these markets however,
are generally similar in fulfilling specific purposes. For example, many popular apps like the ones
mentioned above are available for both IOS and Android devices and also including cloud storage. This
all contributes for this factor to be a strong force as these conditions makes it easy for customers to
switch to other sellers or providers. On the other hand the low switching cost means that it is easy for
customers to switch from apple to other brands based on price, function, accessibility, network
externalities and related concerns. These factors leads to strong competitive rivalry that is amongst the
significant considerations for apple’s management.

The barging power of customers:

The factors that affects this barging are both individual bargaining power and collective bargaining
power. Individual bargaining power is weak because loosing as single client does not affect apple’s
revenue however collective bargaining power is a strong force. It is easy for customers to change brand
therefore apple has to ensure that their customers are satisfied with their products and services. On the
other hand individuals buyers purchase is small compared to the company’s total revenue. This indicates
that the threats are weak at individual bargaining power level. However the availability of comparative
information about competing products’ features influences and encourages buyers to shift from one
brand to the other. this external factor enables buyers to exert a strong force in the industry although
promotional strategies and tactics in apple’s marketing mix can communicate information to convince
customers to buy the company’s products. This all shows that apple has to include this factor as one of
the most significant one.
The threat of new entrants:

This threat to apple is considered low to moderate. To stablish a big business is extremely expensive so
this means that they need a lot of capital, infrastructure, marketing and manpower in order to give a
noticeable mark in the personal computing and gadgets also require for the business to be recognised
which is another overhead. Establishing a business like apple is not easy and so there would be low risk
for someone to try enter the market and get to the point that apple is in. It would require lots of
capitalisation, as it is extremely expensive and they would also need to try develop a strong brand
quickly as this would allow them to start only then competing with apple. These factors then make new
entrants weak. However large brands that are already well stablish could come in easily, as they would
have the financial capability of doing so. These businesses could be Google for example, as they already
have done so through its customers electronics. Samsung used to be a new entrant too. These business
shows that it is not impossible but you do need to have the capital for it, and they have the potential to
straightly compete with apple. The overall threat however is moderate. This shows however that apple
has to maintain its competitive advantages through innovation and marketing so they remain strong and
lead the market.

The bargaining power of suppliers:

In the porter’s 5 forces for apple, the bargaining power of suppliers is a weak force. Apple has many
potential suppliers with adequate supply and these suppliers can provide parts, processor , packaging,
and virtually things that relates to apple products. The moderate to high overall supply of inputs, such as
semiconductors makes individual suppliers weak in imposing their demands on Apple. But some large
suppliers such as OEMs and producers of chips significantly influence the industry. These external
factors reflets the presence of a small number of big companies, in contrast to a larger number of
medium sized and large suppliers.

Threat of substitutes:

There is a weak threat towards this, and it is because currently we cannot see any product that can
surpass the facilities provided by Apple. This bargaining is about the products that could possibly
substitute apple’s products however there is a low chance of that happening because these substitutes
have low performance because they have limited features, and so many customers may prefer to use
apple’s products because of the functions and convenience. This then means that the force of
substitution is weak in impacting the business. Also there is often a low chance of substitution form
buyers. Customers rather use smartphone than go through the hassle of buying and maintaining a digital
camera or an analogue phone.

Apple Porter's Five Forces Analysis | EdrawMax Online

Apple Five Forces Analysis (Porter’s Model) - Panmore Institute

Task 3:
a) Market structure:

Apple's market structure is known as oligopoly market structure. This is where a small number of
producers work to restrict output and fix prices so they can achieve above normal market returns. The
features of this type of structure is that a small number of firms that control the market and so they
have significant influence over each other, it also has a profit maximisation as the main goal of the
business, it has a price setting rather than a price taking (price setting refers to the ability to influence
the market and charge premium prices without loosing sales or market share, and price taking refers to
the need to follow market trends, adjust prices, and compete to keep up with sales) which may lead to
price rigidity of even price wars, it has also high barriers to entry and exit which may prevent new
entrants and limit competition, and lastly it has strategic interdependence which means that the firms
decisions depend on the actions and reactions of their rivals so in this case apple would be looking at the
actions of Samsung for example.

However one of the key features of this market structure that Apple uses, is their product
differentiation. This is important because it helps apple to build brand loyalty and brand equity, it gives
customers a reason to buy the brand’s product and repeat the purchase, it allows the business to
gaining competitive advantages as it shows that their products are unique. They offer unique and
innovative products that stands out in the market and so this helps them to stand out in the market and
maintain a competitive edge and so it give them some control over pricing decisions.

The market structure affects apple’s pricing because as they have an oligopoly structure, it allows them
to charge high prices. This is because apple is the dominant in their market, a d so it allows apple too
have control over their pricing decisions and they have a significant market share. Apple's unique and
innovative products links to their strong brand image allows them to differentiate themselves from the
rest of the market allowing them to charge premium prices because they know customers will buy as
they see apple as a company that has high quality and desirable products. This is also known as price
leadership as they lead the market they operate in which then influences on competitors pricing.
However apple has to consider market dynamics and consumer demand when determining their pricing
strategy. This means that they need to analyse factors such as production costs, competition and
customer preferences when they are setting their prices. This also allows them to find a balance
between their profitability and market share.

Apple’s market structure also has an impact on their output decisions. This is because apple has strong
market position and recognition which then allows them to strategically adjust their output levels to
meet market demand and maintain their competitive edge. This means that apple is able to make
decisions strategically which helps them save time on their plannings. If they anticipate their high
demand for a new product they may increase their production to ensure that they can meet the
expected sales. However apple also needs to consider factors such as production costs, technological
advancements and competition when determining their output levels. Their sim is to sims the right
balance between meeting consumer demand and maximising their profitability. This then means for
apple that they need to keep an eye on demand and customer feedback so they know what to improve
next and keep an eye on the changes so they know customer expectations.
 b) Influences on demand:

The main thing that affects apple on their demand is economical factors, this would include what we
going through nowadays which are high interest rates and inflation. This means that people are saving
more and spending less as the interest is rising so people are preferring to save up than spend. Their
price then impacts this because as apple sells worldwide they need to keep an eye on exchange rates as
they need to take that into account when setting their price and when delivering to these different
countries. They need to be aware of the countries economic situations so they know that they are
competing fairly with the other brands such as Samsung and LG. as interest rates are high it means that
there is high level of unemployment, this for apple means that as people are not working they are also
not spending and so this shows that they need to take into consideration those people so they can
maybe think about lowering prices so they are able to compete with others and so it attracts customers
and allows the company to run money around the countries economy.

Another influence on demand for apple is their product range and innovation. In the recent years apple
has been letting some customers down as they at known for innovating their products every year, the
fact that they have not done that in the past years shows that they haven’t been as innovative as before.
This for apple means that people are keeping their iPhone for longer time and so they are not making as
much sales. As they not meeting customer expectations as they not giving them what they want which
are new iPhone with new ideas and updates. In the past years the iPhone have been pretty much the
same. If they can start to innovate again on their products is means that they would get more sales and
so this would be a positive impact for them. As apple is seem like a luxury brand customers always
excitingly awaits for new phones every year and apple has not been meeting these expectations and so
proper haven’t been changing their phones.

Last thing that affects their demand is the fact that market trends and customer preferences changes.
This means that apple is not keeping up with these changes and so it’s making the business go into a
decline possibly as they either need to innovate or come up with a new strategy to attract their
customers in order to increase their market share and their profits again as well as getting customer
satisfaction as they will have been doing the necessary research for them to be growing in the market.

These factors affect pricing and output decisions of the business as it all relates to money and how the
business is performing. This then means that if affects the business in general and overall as they need
to make profit and so if those factors are influencing the business negatively it shows that the business is
not their best on what they could be and so it’s affecting on how they are performing. This is because
apple always had and has high profits, but they are lacking on innovating and because of the current
economic factors we are facing because of lockdown and as we are still recovering from it is affecting
them directly as people are getting unemployed and so the money is not going round as there are high
interest rates. Overall, this all-affected apples demand as it is showing us that they are not doing enough
to ensure that they are getting what they should be getting in the market.

Conclusion:

In conclusion I think that apple has responded well to changes however they are lacking on innovation
for their business. this then means that they are doing well but has areas for improvement. Because of
what has been happening in the past years, it is considered that apple has actually been doing good
compared to other businesses. But during these past years they have lacked innovation and have barely
changed their products. They have low risks on being substituted as we have seen in the porters 5 forces
analysis. This is a positive thing because it shows that tv they will be leading the market for some time
still. The swot analysis has shown us that apple has many areas to improve as they have some big
weaknesses that they need to be in control of. We could also see their competitive environment that
they have some great competition however they are able to approach it well as they leading their
market, this then means that overall apple has a very big competitive environment but they are working
well to keep that up and not leave space for new entrants and business to develop as they try to grow a
lot so they carry on with that first position. Their external environment has shown that they have been
carefully taken care of that as it shows that they are quite caring of what they need to be doing.

Overall, this report has shown that apple has some great competition and that they are a well-
developed business. This means that barely have anything to worry about within their business but to
keep up with their market research and to keep an eye on the different trend that can come out and so
impact them both positively and negatively if they are not ready for that.

In my opinion overall apple is doing well despite their weaknesses and difficulties that they manage to
hand it well and so they do r have much to worry about.