Apple Inc. Business Management Case Study

Introduction  

Apple Inc. (Apple) is in the business of improving daily human needs, such as professional work, communication, and social entertainment. It produces and markets own hardware and software, which benefit the working and study environment. It also sells application software and various accessories to different consumers in different industries through online and retail stores. Apple main manufacture and services include iPhone, iMac (Macintosh), iPod, iPad, Xserve, and Apple TV. Apple's programming embraces the operating system for Mac OS X and iWork, iTune publishing gateway, iLife interactive media, and innovative program series, Final Cut Studio, a program series assembling for editing of audio video, Logic Studio, a program series of music production. Apple mainly manages its business on a geographic basis, reportable operating results will come from five different departments in the Americas, Europe, Greater China, Japan, and other Asia Pacific regions. The Americas section covers North and South America. The European section covers European countries as well as India, the Middle East, and Africa. Greater China covers mainland China, Hong Kong, and Taiwan. Other Asia-Pacific regions, including Australia and Australia. Each reportable operations department provides comparable hardware, software products, and comparable services, managed separately to better position themselves as well as consistent single market dynamics for each geographical region. (Apple Inc.: Technology and communications, 2016)

Pestel Analysis

Political

Apple CEO Mr. Cook defends globalization while mentioning that Apple is facing political pressure in the U.S., as it was asked to move from China in China's speech. He highlighted globalization’s benefits unfair distribution within nations and explained that the move will not benefit the countries as it isolates them. From the point of view of US President Donald Trump, US manufacturing is a key objective of the renaissance. Which is why Apple’s production factories are requested to shift back. This raises China's concern, as it is currently the main manufacturing station for Apple and other global companies. Analysts mentioned this will increase Apple’s cost for moving back its production factories. (Dou, 2017)

Legal

Apple request California court issue preliminary injunction to block Samsung new Galaxy Nexus smartphone's sales, this infringes four Apple patents. One of which, involves a case scenario whereby a customer using Samsung Nexus smartphone, was able to access by app, similar to Apple device’s search function. Another is the similarity function involving auto-correcting wording while using the app. As a result, Apple forecast there will a loss of sales on top of the 14% declined compare to Samsung’s 23% incline. Other Apple products which includes iTunes, will also be affected. The U.S. court concluded that it will not grant the motion to block Samsung’s indignant involving this issue. (Sherr & Vascellaro, 2012)

Economic

A decrease in China’s smartphone market is affecting Apple’s growth even though there is a demand. Analyst mentions that market growth will remain slow this year due to the lack of sales for smartphone. First quarterly reported, purchases was affected by the market saturation. Other factors such like winter mostly in the northern state, deters potential buyers, according to Canalys analyst Nicole Peng. Mr. Cook said, on the investor call, Apple is still optimistic in China, and claims bullish growth despite the doom and gloom side. (Dou & Wakabayashi, 2016)

Social

From CSR theory, Apple has faced many complaints based on poor laboring circumstances, excessive extra time and even self-murder at its supplier, Foxconn’s factory (Elmer-Dewitt, 2010). Despite Apple takes measures to correct any violations of human rights, its business operates in China. This means that decent employment standards are often avoided, so the only way "to go beyond "is to implement Western self-discipline and supervision, or to bypass doing business in China. It will increment production costs, and also bring impact to consumer. (Morrison & Bridwell, 2011) 

Environment

Apple is one of the global companies that seeks to reduce energy consumption and switch to renewable energy, including wind and solar, to reduce costs and mitigate climate change. BlackRock Inc., one of Apple's largest investors, including this in the topic discussed last year with the investors. Lisa Jackson, Apple's Vice-President of the Environment, believes that adopting a cleaner form of energy is a good policy and a good awareness issue. CEO Tim Cook urged the United States to continue to participate in the Paris Climate Treaty and to send climate change memoranda to staff. (Apple inc. say facilities now using 100% renewable power, 2018)

Technological

In February 2017, WSJ reported Apple and SAP announced plans about releasing a tool called SAP Cloud Platform SDK for iOS which help developers create iPad and iPhone apps that leverage SAP database services and analytics and other third-party systems. The SDK is built into Swift, Apple's modern programming language, to present a plentiful library of prebuilt user experience (UX) components and easier access to Touch ID, location services and notifications. The combination of OS and SAP has an impact on the business which will help achieve further, more well-organized and effectual method cross-industry. Now more developer will able to use the new SDK. Susan Prescott, VP of product marketing, said that they can't wait to see how it helps to change business. (Niall O'connor - CIO, apple inc, 2017) 

Porter 5 Forces Analysis        

Competitive Rivalry – Medium

The war between Amazon and Apple has begun to boil. They compete in more areas as they consolidate their positions as digital life control points for consumers. Their battle stand out from other rivalries due to their similar strategies - tight software control, covert corporate culture and breadth of customer data. The relationship between them is complicated because they profit from each other. Amazon’s Kindle app is the fifth-best free iPad app ever to be downloaded. Amazon sells large amount of iPods and iPhones on its website. Coincidentally, Apple has been working on a small tablet similar to Amazon’s Kindle Fire. According to developers, Apple is also watching out for Amazon’s app store. Apple executives also commented that they think Amazon uses a controlled, iTunes-liked approach to be more competitive than other app stores. Apple attempts to erode Amazon’s e-book business through new technologies, creating an interactive e-book called iBooks Author. Someone familiar with the matter said Amazon has tested its own technology with publishers. (Vascellaro & Bensinger, 2012)