Apple Incorporate Introduction Apple Incorporate is a multinational corporation that is involved in the design, manufacture and sale of mobile communication and media devices, portable music players, personal computers and their related software, computer peripheral devices among others. The company is based in Cupertino, CA in the United States. In this analysis, the focus will be evaluating the internal and external environments of Apple Incorporate and its competitive advantage. The analysis will also examine the strategies that Apple Incorporate has used to create value and gain competitive advantage as well as the guidelines used to verify its strategic effectiveness. Internal and External Environments Internal Scan-Strengths and Weakness An internal scan of Apple Incorporate shows that the company has significant strengths and opportunities which can be utilized to enhance its market leadership. However, the company also faces major threats and weaknesses which could be handled to enhance its competitive position. In terms of strengths, Apple Incorporate has enjoyed significant sales growth and cash flows from its international presence, a factor which has enabled it to acquire resources to fund research (Khan, Alam & Alam, 2015). This has enabled the company to achieve greater innovation compared to its competitor firms. Strength of Apple Incorporate is its strong brand which is valued by consumers all over the world. The introduction of the iPhones, iPads and the iMac tunes represents some of the most innovative brands of Apple Incorporate which h has enabled the company to gain a competitive edge in the electronics industry. Further, Apple has earned the trust of its customers based on the quality of its products which are user friendly and easy to understand (Khan, Alam & Alam, 2015). In terms of weaknesses, Apple Incorporates’ strategy of direct sales channels promotion lags behind its other market competitors such as Samsung Incorporate (Khan, Alam & Alam, 2015). With approximately 13 sales locations, Apple Incorporate continues to be phased out in some market segments by other firms who have more market coverage. Also, Apple Incorporate depends heavily on its iPhone and iPod products unlike their competitor firms which are well diversified in the market. Statistically, Apple derives almost 70 percent of its revenues from iPhone sales. Further, majority of their products are supported on iOS which only renders it difficult to use compared to competitors which run on Android which is regarded as much simpler and cheaper. External Scan-Opportunities and Threats The opportunities that Apple Incorporate has are to make more presence especially in the developing markets which are predominantly occupied by competitor firms such as Samsung Incorporate (Khan, Alam & Alam, 2015). However, the company must be able to handle the enormous threats from other competitor firms such as Samsung, Techno and Huawei technologies which has established bases in these countries. This can be achieved by offering products at prices that match the purchasing power of consumers in such markets. Also, Apple Incorporate faces enormous threats from its global supplies especially in the Asian countries in that any economic or political turbulence in the source markets could affects in supply chain networks. This may affect the ability of the company to continue in its production and lead to losses (Khan, Alam & Alam, 2015). Apple’s Competitive Advantage Indeed, Apple Incorporate has significant competitive advantage which has enabled it to achieve a significant market share. The company’s competitive advantage lies in its ability to innovate quickly and come up with exciting products which are highly liked by the consumers (Sun, 2015). The introduction of the iPhone series represents one of the significant sources of competitive advantage. Despite the fact that Samsung introduced similar models of the smartphones, the iPhones are considered as luxury brands which enables Apple to charge premium prices and obtain higher profits (Sun, 2015). In addition, Apple Incorporate gains competitive advantage from its protected ecosystem since only Apple devices run on iOS. The ability of Apple to differentiate itself from other electronic firms whose gadgets run on Android is likely to keep Apple ahead of its competitors in the foreseeable future. Whereas the prices for Android smartphones keep falling each year, Apple’s iOS brands continue to enjoy premiums. This is due to the fact that any firm can develop and sell Android phones thus making competition stiff. The non-replicability of the iOS makes Apple enjoy a superior market dominant over its rivals (Sun, 2015). Strategies Apple Uses to Create Value and Gain Competitive Advantage Apple Incorporate uses premium pricing strategy as well as product differentiation to create value and gain competitive advantage (Nielson, 2014). Premium pricing strategy is evident in the way that Apple Incorporate creates amazing and premier products and charges a premium price for it. High quality user experience with unique features attracts consumers who can pay a premium on the product. The strategy of premium pricing has enabled Apple to enjoy competitive advantage especially in high income countries where consumers are willing to pay an extra dollar to acquire the product (Nielson, 2014). However, the strategy is less popular in the less affluent countries where consumers are price sensitive to mobile product. Additionally, the differentiation strategy involves the process of differentiating product using innovative advertising and brand loyalty to create value. Under this strategy, Apple focuses more on customers who can pay more and maintain a premium price (Nielson, 2014). The iOS run mobile devices clearly differentiates Apple’s products from those of the rival firms. Also, Apple uses a retail strategy known as “minimum advertised price” (MAP) to reach consumers which is enforced through marketing subsidies to the resellers (Nielson, 2014). Measurement Guidelines of Apple and their strategic effectiveness Basically, Apple measures the effectiveness of its strategic fit by observing the results of its operations year after year. The company also checks on products reviews and adoption rates by its customers in formally organized meetings by its executives. By checking on product reviews, the company understands that raw sales numbers are not overly convincing. The company wants to create a product that consumers can associate with and continue to visit its stores (Ferrers, 2013). This measurement guideline is important in ensuring that Apple continues to innovate and offer products which are valued by consumers. In my view, the strategic measurement of Apple is very effective since it helps the company to understand the feelings of the consumers regarding its products which is critical for long term success of the company. The strategic measurement guideline has enabled the company to continually innovate with new models of iPhones based on the views and opinions of the customers. However, Apple need also to examine its effectiveness with the premium pricing strategy which seems be unpopular in certain regions of the globe. In my suggestion, the idea of market segmentation would help Apple enter new markets where it is facing stiff competition through differential pricing. Conclusion To summarize, Apple is a company with great strengths in strong financial strength, strong brand and innovation. Opportunities exist in entering new markets especially in the less advanced economies. The threats that face Apple include increased competition and disruption of supply network. The company faces weaknesses of overreliance on iPhone products. However, the premium pricing and differentiation of Apple products has enabled it to gain a competitive advantage. References Ferrers, R. (2013). Apple's Innovation Success and how to measure it. Retrieved at: http://www.managementexchange.com/hack/apples-innovation-success-and-howmeasure-it Khan, U. A., Alam, M. N., & Alam, S. (2015). A Critical Analysis of Internal and External Environment of Apple Inc. International Journal of Economics, Commerce and Management, 3(6), 955-961. Nielson, S. (2014). Apple’s premium pricing strategy and product differentiation. Retrieved at: http://marketrealist.com/2014/02/apples-premium-pricing-strategy-productdifferentiation/ Sun, L. (2015). Apple Inc.'s Sustainable Competitive Advantages. Retrieved at: http://www.fool.com/investing/general/2015/05/18/apple-incs-sustainable-competitiveadvantages.aspx
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