Strategic Analysis

Apple is one of the largest tech companies in America, in 2020 the company generated a revenue of 29.32 billion US Dollars in American Soil’ (Strategy Watch, 2021). The large streams of income Apple bring to the US enables Apple to be the centre point in many political influences. However, this has also caused a political issue, as the company manufactures most of its products in China to help lower its expenses. The relationship between the USA and China has been rough, leading to a trade war between the two countries. The trade war has affected ‘Apple’s ability to manufacture products in China, resulting in price increases for their products’ (Leswing, 2019). China is one of the company’s largest foreign markets affecting their sales.

Apple has a large consumer market, with products targeted towards all age groups. To derive sales, the company focuses on attracting youths who love using technology. In 2019 a survey in the USA showed that ‘83% of teens use an iPhone’ (Rossignol, 2019), focusing on this group enables Apple to consistently launch new products, as youths tend to lack emotional attachments that drive sales. With the tension between the USA and China and Apple’s close association with China, this could potentially affect customers in regions such as the USA. This could lead to a drop in sales as well as potentially tarnish the companies brand image if tension continues to rise.

In recent years Apple has seen a rapid increase in competition, competitors such as Samsung and Google have shown a strong ability to duplicate Apple’s products and services such as Apple Pay. Although Apple Pay is still considered one of the best services and supports several banks, Google Pay is not far behind. Samsung’s payment service can be seen as inferior compared to Google Pay. However, due to this in ‘2020 Samsung partnered up with Curve’ (Finn, 2020) an all-in-one card that supports a wide array of banks. This has enabled them to compete with Apple and Google. Although Apple’s products are considered premium quality, a lot of the companies’ competitors offer similar products at a lower price range with more features. For example, the One Plus Nord offers twice as many features as Apples cheapest budget phone the iPhone SE for half of its price.

To protect the companies brand image, against any lawsuits, Apple has to follow agreements set by the government. Privacy has been a rising threat around the world, with more and more information is stored online it can potentially be accessed by anyone. That is why the company takes privacy very seriously, showing that it is one of its core values. On top of this, the company must show that it operates within the government’s guidelines and not purposefully tampering with current products just to generate sales. In 2020 the company was fined ‘$27m for deliberately slowing down older iPhone models’ (Ababio, 2020). The French authorities also fined the company $1.23 billion for anti-competitive behaviour. This shows the consequences of failing to comply with rules and regulations.

As a multi-billion-dollar tech giant, environmental factors are not one of the companies strengths. Although Apple has tried to limit their environmental impact through the use of several incentives such as their trade-in program, it's not enough. Pollution and other environmental side effects from manufacturing in China are a growing concern. China’s efforts to cut greenhouse gases means increased electricity rates as well as manufacturing costs. Although this is something the company cannot control, Apple has shown innovation in producing more efficient products over the years. Their latest processors emit less heat as well as geniting twice as much power. With the introduction of the iPhone 12, the company stopped providing the charging brick within the box, to limit their environmental impact. This trend is now becoming a norm for most tech companies. Such as Samsung and Xiaomi.

Product Innovation created values for Apple. Since the launch of the Apple 1, the company has strived for product innovation, which can be derived from the founder's vision, mission statement and core values. However, in recent years innovation has slowed down to a point where the company is perfecting their product line up with every iteration, rather than realising a completely new innovative product, this is the case when it comes to most of their devices. Processors on the other hand the company is being very innovative. With their custom M1 chip beating processors made by Intel, AMD, and Snapdragon.

Leadership plays an essential role at Apple; Steve Jobs followed an authoritarian approach. whether Apple CEO Tim Cook uses more of a participative/democratic approach. Although both leadership styles differ, they have both been able to successfully lead the company. Developing products that are unique in design and are made from premium materials, providing luxury and elegance. Also helping the company to diversify into new markets. It was Steve Jobs who bought Apple into the smartphone industry, and now Tim Cook is expanding the company further by entering the electric automotive industry, ‘developing its own Apple Car to compete with Tesla’ (Metz, 2021). Thus, turning Apple into the tech giant, it is today.

Accessibility is one of the company’s core values, all Apple products are user friendly. IOS is a universal platform for iPhone, iPod, and iPad. Its simplistic design makes it easy to use and learn. Products are targeted towards all ages and consider disabilities. This has been achieved by Apple's software engineering team. However, the companies user-friendly/ simplistic software design has is far from being perfect. It has limitations that do not take full advantage of the hardware inside the product, thus limiting its overall performance. For example, the new M1 iPad Pro is 'More powerful, more functional, still frustrating’ (CADE, 2021) as it is limited by Apples iPad OS which is not optimised to use the device to its full potential, as it supports no professional applications.