ORGANIZATIONAL STRATEGY
External Environment Assessment
Businesses operate in a complex environment. Strategic management has to do with making decisions and taking actions which ensure business success and survival in a competitive environment. Before making decisions, companies first carry out external and internal environmental assessment in where it competes. This paper is going to look at the micro and macro environmental analysis of Apple Inc.
Micro-Environment External Factors
Micro-environment is the immediate environment which has an impact on the business of Apple Inc. The micro-environment factors which can affect a company include retired employees, trade unions, local community, local government, suppliers, marketing intermediaries, customers, competitors, opinion formers, and regulations (Groucutt, Leadley, & Forsyth, 2004). These are the same factors have a huge impact on Apple Inc. Apple Inc. must therefore come out with strategies which it can adopt in order to survive within a competitive environment.
Suppliers: Apple Inc. relies on other companies to supply various goods and services. The suppliers impact business operation of Apple if they wield high power. Apple Inc. ensures that the businesses contracted should supply low-cost and high-quality standard components. They should be also be compliant with other government regulations and policies. In the market, there are many suppliers who depend on Apple to supply goods and services. Apple, therefore, has a higher bargaining power over suppliers.
Markets: The markets for the product manufactured by Apple is huge since it is a globally-focused company. Apple relies on its own stores and marketing intermediaries to distribute the products in various parts of the world. The intermediaries are marketing service agencies, physical distribution firms, and middlemen. The company should not only open many stores in various countries but it should also recruit an optimum number of marketing intermediaries and support them by advertising. It should also monitor their operations to help in inventory control. Further, it should encourage them to employ e-commerce platforms to reach as many consumers as possible.
Competition: Apple faces stiff competition from other companies offering similar products and services. The competitors can be classified as direct competitors and indirect competitors. Direct competitors include primary competitors who sell exactly same products such as Samsung, Microsoft, LG, and Huawei. Direct secondary competitors sell similar products with a certain level of variability. On the other hand, there are indirect competitors who sell slightly different products but which can act as a substitute. Apple must, therefore, try to beat the competition by adjusting its price, producing high standard products, advertising, and strengthening its distribution network.
Consumers: Consumers of the products and services are businesses which distribute the goods and consume directly and individual customers who buy and consume the product. Consumers can impact the success of Apple in many ways. They have access to similar products to choose from. They, therefore, possess a higher purchasing power. Apple strives to produce high quality and affordable product which appeal to the desires of the customer. It also ensures that the product is located within the convenient point where the customer can reach.
Public: The public exert a great influence on the Apple business, and it has the capacity to support its goals or oppose it. The opinions of the public matter a lot in the success of the Apple’s business. It is, therefore, the duty of the company to conduct itself in such a manner that satisfies the public interests. Apple can do this through best employment practices, environmental upkeep, CSR, or even quality of goods produced.
Macro Environment External Factors
These are factors which affect the business, but they are out of control by the company. These include demographics, cultural/social conditions, ecological/natural forces, economic factors, legal, political, and technological forces (Young & Pagoso, 2008).
Macro Environment Analysis
Political Factors. Politics play a key role in the success and survival of Apple. The company deals in goods and services which are subject to political impact. For example, Apple need to pay tax from the profits it makes. The governments decide the taxes which need to be paid by Apple and other businesses. There are also legal aspects affecting the business. Apple needs to obtain a license issued by the various governments to operate. There are also government agencies which ensure that that the products and services offered meet the local standards. Further, the various countries has policies and guidelines which are used to monitor the business activities. The governments through its various agencies also monitor the business operation to ensure that it complies with the ethical business practices such as selling goods and services of the right quality, quantity, and to the standards the company claims. Apple ought to identify all the policies, regulations, and guidelines and adhere to them to avoid fees, penalties, and even closure of business.
Environment. The manner in which Apple does business is monitored on an environmental aspect. The goods and services offered by Apple have the potential to impact on the environment. There are policies that have been put in place by various governments and global agencies which restricts business practices which pollute the environment which demand that business practices promote green life. For example, there is an emphasis on avoiding processes which consume a lot of energy, production of wastes, and sale of environmentally polluting substances/equipment/machines. Country-specific regulations affect the consumer purchase behaviors since consumers avoid non-environmentally friendly products. The idea which Apple need is to develop business practices which are environmentally-friendly.
Social: There are social factors which affect Apple’s business. The population growth is very low in key markets. There are falling birthrates, and the business’ customer base may fall in future. There are also attitudes among the communities (friends, families, peers, media, neighbors, and colleagues) that shape the consumption patterns of products and services offered. Apple ought to operate in a manner which is consistent with the beliefs and changes in the society.
Technology: Technologies are dynamic, and there is a number which affects the business operations of Apple. These include communication, information, and production, changes in technology affects many things associated with the business including people’s lifestyles, their economic well-being, and their consumption patterns. The emergence of new technology is a threat to the organization. Certain technological developments can boost the business operations. However, if a new technology is launched in the market and renders a technology which the Apple has just commissioned obsolete, it might result in heavy losses. Apple should, therefore, look further into the horizon to avoid major technological risks.
Economic: Economic status of the country affects the demand for the products and services offered by Apple. Despite the recent economic problems, the country’s economically is generally robust, and it favors the movement of products and services. The robustness of the economy is evident from the growth in real income and fair pattern of income distribution in the economy. However, the shifting behavior of consumer consumption patterns is a challenge to the profitability of the company.
Legal: There are state and local legal procedures that guide business operations of Apple. Failure to comply might result in fines or withdrawal of license. Apple should, therefore, ensure that it is not only dealing with legal products and services, but it should also ensure that it is licensed to operate. Further, there are legal aspects governing employment, copyrights, licensing, intellectual property, trademarks, and revenue accountability that the company must comply with.
References
Dransfield, R., Fox, E., Guy. P., Needham, D., & Wilde, J. (2004). Business for Foundation Degrees and Higher Awards. Oxford: Heinemann Education Publishers
Groucutt, J., Leadley, P., & Forsyth, P. (2004). Marketing: Essential Principles, New Realities. London: Kogan Page Ltd.
Young, F.C. & Pagoso, C.M. (2008). Principles of Marketing. Manila: Rex Book Store.
