Running head: APPLE INC.

University of the Cumberlands

Week 4 Research Paper – Entrepreneurship in a Global Economy

ITS 832 – Info Tech in a Global Economy

History

Apple is an American company that deals with mobile phones (the iPhones and its

respective series), computers (MacBook and iPad for the tablet computers), and other

computer and technology accessories. The company not only deals with hardware but also

offers computer software and other online services. The online services the company
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provides include iTunes, where individuals can download and even play music and other

media and Safari web browser, which facilitates connections of travelers to prospective hosts

in their new destination (Carlton, 1997). Apple smartwatches, home pod speakers, and Apple

TV are other favorite hi-tech technology products of the company. It is also renowned for the

macOS software, which runs the MacBook and iPad tablet computers.

The company was founded by three computer technologists Steve Jobs, Steve Wozniak,

and Ronald Wayne in 1976 in California, where the headquarter of the company is located to

date, for the sale of a computer which was named Apple I ad was designed by Steve Wozniak

(Norr, 2000). After the sale of Apple, I, the revenues raised by the company increased

significantly in the following years. Between 1976, when the Apple I and 1980, the revenues

of the company grew from $800,000 to $118 million. Apple had started posing significant

competition to the existing hi-tech companies such as Microsoft and IBM, which existed for a

longer time than the Apple Computer Inc. in 1980; the company sold some of its shares to the

public is one of the biggest sellers in the market during the times.

The company oversaw a slight fall in revenue in the years between 1991 and 1997. This

fall was due to their poor market differentiation, where identical were sold at different prices

to customers in the same market. This resulted in a fall in demand for their products due to

the confusion between the identical hi-tech products. However, the company recovered and

got back to a footing. In 2007 the company launched its first-ever laptop and had since

exhibited rising profitability in the market. The company has since ventured into the

manufacturing of cell phones, which have proved to be very profitable to the company

(Brashares, 2001). The company oversaw a change in its management in 2011 after the death

of the then CEO and co-founder Steve Jobs, with Tim Cook taking over as new CEO

Present Condition
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In recent years under the management of Tim Cook, the company has been able to rise to

be one of the best and biggest sellers in the hi-tech industry. The financial aspect of the

company's growth, in 2017, the company recorded quarterly revenue of $52.6 billion, which

was an increase of 12% compared to the preceding year 2016. The market share of the

company also increased by 24%, with the earnings per share being $2.07. The company

significantly made massive sales in the international market, being the primary target for the

company. The global markets were accounting for 62% of the company's revenue in 2017.

The company's CFO Luca Maestri, during the release of the company's 2017 fiscal year

financial status, highlighted that the company had experienced accelerated revenue growth

recently in the last four years, which has stimulated the growth of 24% in the company's EPS

for the quarter ending September 2017. The CFO also noted that the company maintained a

significant cash flow of $15.7 billion and made a profit return to the investors of $11 billion.

The company declared a cash dividend pay-out of $0.63 per share to the investors in

November 2017 (RELEASE, 2017).

Looking at the product development and modification if the company, it is notable that

they developed more sophisticated smartphones. Between September 2015 and June 2017,

Apple had added several products to its wide range of hi-tech products. iPhone 6S, iPhone 6

plus, iPad pro, fourth-generation Apple TV, and fourth generation iPad Mini were all

products that the company availed to its customers within the year 2015. In 2016 Apple

added the iPhone 7 and seven-plus, which exhibited higher functionality features as

compared to the previous versions. An example is the iPhone 11 displayed improved camera

features, more significant storage capacity, and a faster processor as compared to the iPhone

10, which was its immediate predecessor. The most recent products to be developed by the

company are the iPhone 11 and iPhone 11 Pro max smartphones, which were launched to the

market within the year 2017, the iPhone x another advanced smartphone launched in 2018,
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Apple smartwatch series 3, and Apple TV 4K. These products are sophisticated and offer

their customers an essential experience. Customer satisfaction is one of the main strategies

that Apple, as the ahi-tech company, has used overtime to ensure that it remains relevant and

maintain its competitive advantage in the market. The company has also integrated advanced

features it's MacBook computers and pads. The introduction of iOS is a new experience that

the company provided the customers with its software products. 

The company has experienced extensive growth in the last three years. The customer base

and market have significantly increased. Research conducted by the company in 2017

9indicated that more than 1 billion Apple products (both hardware and software) are being

actively used by its customers worldwide. This indicates the significant market growth that

the company has exhibited in recent years. 

The strongest points that have offered Apple computer Inc. the ability to be this successful

in the market include proper use of the strategies of differentiation and value creation, which

the company based on a focus on customer satisfaction and minimized cost leadership. The

company aims at providing quality products while reducing their cost of production.

 Environment Analysis.

The external environment of Apple Computer Inc. entails all external factors that affect

the operations of the company. They are those factors that the company cannot influence. The

external environment of Apple Computer Inc. can have a significant impact on the market

structure and market size, market growth, and market share of the company, which the

company is struggling to develop in the competitive sector. Some of the external environment

factors that could impact the operations of Apple Computer Inc. are competitive factors,

socio-political factors, economic factors, and technological factors. 

 Competitive Factors. It is a big company in a competitive industry and has ventured

into the production of a variety of several products. Some of the competitors to the
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products of Apple hi-tech company include Microsoft, which specializes in the

production of computer software, HP (Hewlett Packard), which has specialized in the

manufacture of computers, Samsung, HTC, Nokia, and IBM among other companies.

 Of the leading competitors in the market is Samsung. Samsung has created a

significant competition to Apple in the manufacture of smartphones. The most recent

smartphones produced by Samsung, Samsung Galaxy S8, S8 Plus, and S9 have been

compared to the Apple products. Samsung has employed market strategies that have

recently that pose a significant threat to the competitive advantage that Apple has

enjoyed over time. The competitive prices that Samsung set for their products ensure

that the products can reach several segments of the market (Stanley, 2009). This is

something that Apple has failed to factor in pricing their product. To some extent,

Apple's products are limited to some members. The prices of the products lock out the

middle earners and low earners since they cannot afford to buy the products at the

market prices. Another strategy that is giving Samsung an advantage in the market is

the skimming of costs. 

 The principal competitor to Apple is the Hewlett Packard Company. The company

has majored in the manufacturing of computers and laptops. Unlike Apple, which

manufactures MacBook's which are priced highly; Hewlett Packard has started

making slim ultra-books and notebooks that have a unique and attractive physical

outlook. The company also provides computers that are affordable to all categories of

the population. By offering machines that are cheap and affordable to high-end

computers with advanced features that are sold at higher prices as compared to other

customers gives HP Company an advantage that Apple Computer Inc. should work

hard to alleviate.
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 Clearly understand and analyse the competitive factor of the company, Porter's five

competitive forces are discussed below.

1. Socio-political factors.

This factor is a combination of two aspects of the market, the political conditions, and the

social factors that could affect the operations of the company. In the current political

circumstances, several political factors could affect the functioning of the company. Problems

and challenges such as terrorism, geopolitical uncertainties, and other factors such as health

issues affect the functioning of Apple. Political instability in those countries where Apple

source resources would mean challenges in manufacturing processes.

The other factors are social factors. The design and quality of Apple products make the

products appealing to the populations. In the modern world, having Apple products is being

used as a symbol of high life status. This has made Apple products appealing to most

individuals as an indication of life status.

c. Economic Factors.

These are factors such as inflation and rising and falling of currencies in the stock market. 

Unemployment is the most significant economic challenge that causes financial constraints

and has proved to reduce the market for Apple products significantly. Another economic

factor that affects the sale of Apple products is inflation. These factors reduce the purchasing

ability of people, therefore, reducing the market for Apple products. 

d. Technological Factors.

Apple has employed specialized and technical employees. The innovation and invention

abilities exhibited by the company have proved to give the company an upper hand in the

market. The expertise of the company to put into implementation new technologies and come
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up with new and more appealing products helps the company to become appealing to the

customers hence increasing the market base.

In Conclusion, I see that Apple Inc have their own strategy of researching and

implementing new products and services which indeed resulted greater sales of product for

them. Apple Inc spends a lot of money in research and innovating newer products and

services for number of years and come up with a product that meets the customer

requirements and promotes stakeholder’s satisfaction. Looking at the organization’s strategy,

it is clearly evident that they are following a technological approach by correcting their

problems and launching new products. With this kind of approach, it can be clearly evident

that any organization would succeed following the same strategy.

References

Brashares, A. (2001). Steve Jobs Thinks Different. Brookfield: Twenty-First Century Books.
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Carlton, J. (1997). Apple: The Inside Story of Intrigue, Egomania, and Business Blunders.

New York: Times Books.

Hangen, N. (2015, June 20). “7 Key Strategies That You Must Learn From Apple’s

Marketing.”. Retrieved June 8, 2018, from Kissmetrics.

Norr, H. (2000, January 6). "MacWorld Expo/Permanent Jobs/Apple CEO finally drops

'interim' from the title"... San Francisco Chronicle.

Porter, M. E. (1979). How Competitive Forces Shape Strategy (Vol. 59).

RELEASE, P. (2017, November 17). Apple Reports Fourth Quarter Results. Retrieved June

1, 2018, from Apple: https://www.apple.com/newsroom/2017/11/apple-reports-

fourth-quarter-results/

Stanley, F. &. (2009). Factors Influencing the Relative Importance of Marketing Strategy

Creativity and Marketing Strategy Implementation Effectiveness. Industrial

Marketing Management, Vol. 3.