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1. Apple Company External and Internal
Environments Essay
Apple Computer Company started operations in the personal
computing field in 1978, but because of administration
alterations, lost chances and variation of views, the company lost
its competitive edge to corporations like Dell and Microsoft.
Apple, however attempted to make a differentiation of its brands
to restrict customers from switching to rival brands. Presently, the
company is faced with the challenge to sustaining its central
marketing competencies, originality, brand administration and
affiliation building as it operates a wider brand variety and
expounds to more markets (Naraine, 2004). This paper is an
analysis of the factors that influence the internal and external
environments of Apple.
General Environment Analysis
Ever since 2000 there was subversion of the financial system, the
electronic computer business has been scrambling. The legal and
economic segments are the major environmental sectors
influencing the company.
Demographic Segment
The 2003 U.S population census statistics were concluded at 281,
421, 05 citizens and in 2007 estimated at 294,444,407 people.
This was an increment of 13 million citizens in a span of less than
4 years. Increment in residents compounded with technological
improvements will continue to drive improved transactions in the
arising technology markets. Americans begin using computer in
early years. Figures analysis easily remonstrates a great number of
American residents are of age to use computers in various styles
or ways. Still, some of these aged generations are using computer
applications for research. Local population is comprised of 85% of
people who are aged over 24 years with minimal senior high

2. school qualifications and 28% who have had first degree or
masters (Hitt, Ireland, &Hoskisson, 2013). It was conceived that
12% of the population was living in poverty. The assessment of
world population for 2005 was 6,450,000,000 inhabitants and
for 2010 it was 6,810,000,000 (Rezvani, Gilaninia & Mousavian,
2011). Statistics indicate that in future, there will be a further
increase. This population increase forces Apple Incorporation and
the entire computer world to ensure they boost production in
order to meet expanding demand. The industry of computers is
rising swiftly in the Asian continent and according to statistics, a
great section of the population increase will be within that region.
Legal and Political Segment
Apple is faced with legal segment challenges at a national and
overseas level. Nationally, the State and Federal administration
continues to stiffen on matters of environment which hamper the
manufacture and dumping of units. Environmental matters are
issues that affect all computer companies straightforward. The
Environmental Protection Agency, in 1995, October modified the
Report of the Computer Industry Policy. The report provides
declarations that must be followed by companies that deal with
the manufacture of computer parts. Apple, intentionally
encourages the buyback as well as appropriate dumping of
computer components in the attempt to support stewardship
production from the viewpoint of the environment. Different
countries also enforce restrictions on computer parts and their
applications once set. China is a good example that provides
clarification of some of these matters. China, begun allowing
computers into the country during the mid-90s but it has
restrictions on applications (Rezvani et al., 2011). Apple also faces
the struggle of overpowering market domination of personal
computers though it does have a great chance in the world of
music. Apple and other corporations dealing with computers in
the US have come to the realization that doubling and pirating are
quite prevalent in the United States as well as other states. This

3. action which is unlawful directly affects successful operation of
corporations in electronic industry.
Competition Forces
All markets, and the business world, are assessed through use of
Porter’s five force hypothesis. Porter’s applies 5 forces; obstacles
to entry, provider power, extent of competition, purchaser power
and risk of substitutes as elements that help in examining the
status of a company alongside contenders. The risk of substitutes
as well as extent of competition are some of the most significant
factors that affect the operations of Apple currently.
Threats of Substitute Components
Apple Corporation faces the high risk of substitute components
that are obtainable promptly. Rivals like Dell and IBM persuade
buyers that they have brands that are of quality that is better
compared to those of Apple. Apple, has however made the attempt
to differentiate its brands in order to restrict customers from
making a switch to rival brands. Apple’s brands, additionally
command a market price that is high when compared to other
competing brands. Even though the prices of Apple are higher, the
company provides justification for the prices. Apple’s operating
system specialization command, however skyrockets costs when
delivered to inventive population designer when compared to
purchasers of individual computer except where they seek graphic
capacities that are superior (Boutellier, Gassmann, & Von
Zedtwitz, 2008).
Competition with other Companies
Apple is in competition with companies that enjoy the benefit of a
bigger market portion. The company therefore is forced to
compete with companies like IBM, Hewlett-Packard and Dell.
Still, minor firms such as Gateway also present a huge risk. In the
manufacturing industry of computers, rivalry is vicious and

4. expenditures switching is low. Apple as well is dependent on
advancement of its individual operating system. The possibility of
success is minimal as contestants chase niche markets rather than
make attempts to contend with larger firms. Apple placed itself
years’ before the competition as such, it has made room in the
industry of computers like Dell, Gateway and IBM (Naraine,
2004).
Strategies to Address Future Competition Forces
Apple is supposed to persist with the promotion of inventive
expert and educational markets. Apple is a firm with the best
systems in position for such markets as such, it should
concentrate on unrelenting funding for every regulatory approach.
The backing outlay in the perspective of a market niche is
supposed to get reexamined economically so that Research and
Development expenditures do not drag into a situation that is
unfeasible in making a return (Boutellier et al., 2008). Apple also
has the option of incorporating its operating systems so it can
work within Wintel operating program but this is not supposed to
be limited to Wintel setbacks. Apple has also proved to be a
controlling system that is superior and less susceptible to hitches
that Microsoft faced and its operating system software (Naraine,
2004).
Key External Threats
The technological revolution speed and competition are threats
that are most serious that Apple Computer Company faces. Its
strategy shifts into communication gadgets and mobile
entertainment that is portable placing the firm in situations that
are competitive from varying sides. New contestants, prospective
brands as well as opponents that are lowly prices threaten to
lower the worth of Apple brands and its policy success.
Opportunities

5. Apple’s Diverse Operating System
Apple can use its operating system variations by spinning it into a
chance formulating perfections to Macintosh program in order to
achieve greater design and optional benefits over its rival
software. Different computer viruses as well as cyberpunk
irregularities present quite impressive prospect for the company
to embellish and benefit some small sections of such an upset
market.
Apple’s Engagement into the Music Business
The investment of the company in the world of music with its
iTunes is a presentation of good prospect to enhance the
knowledge of the brand. Introduction of iPods Music Shop also
fronts fetches in excess of 2 million downloads in 15 days. All
downloads were run on Macintosh mainframes. The
establishment of the company of its international music shop
would be an ideal prospect.
Microsoft Upgrade Expenditures against Advantage
Microsoft customers find it is less practicable to upgrade software
programs except in instances when they can actually perceive a
gain for the spent. The latest improvements by Microsoft are
beleaguered with bugs which present a major magnificent
prospect that Apple can use its benefit only if it avoids making the
same mistake with its upgrades.
Apple’s Greatest Strengths and Significant Weaknesses
Strengths
Merchandise Differentiation
In the mid-1980s when the company was new in the market, its
brand distinguished it from other company brands and up to date,

6. it has capitalized on this fact for its products. The system is still a
strong point for Apple since its operating system is not in any way
susceptible to computer bugs and espionage invading other
systems. The limited portion market that is held by Apple is
enlarged whenever Microsoft is faced with setbacks.
Brand Identity and Reputation
Product brands aids in keeping the customers updated of
company merchandise. Whenever a firm institutes fashionable
brand name or reputation, it obtains several advantages. There
are a number of advantages related with brand reputation and
these include, capacity to trim down on production from
acknowledgment viewpoint. Apple computers have obtained
business identity from Steve Job’s and this has borne fruits.
Dealing with Software and Hardware
The top management of Apple is acting on blend of software and
hardware development and it does not make any proposals to
dismiss its workers since employees contribute to the company’s
success. Apple will continue to operate in an excellent manner
while management practices of the business of manufacturing
software and computers that even some of the tough opponents
deem finest. The company does not make software and computer
components for its machines as such it has capability of regulating
its design with the purpose of conforming it to operational
applications as well as artistic wanted by the customers.
Weaknesses
Financial and Political Ambiguity
The functional operations of the company are influenced by
political and fiscal ambiguity that glooms the US. Educational
institutions at times defer procurement due to budget deficits and
restraints. Business enterprises also are not expanding and

7. employment cutbacks experienced render less disposable income
therefore reducing sales. Failure in recovery might persist thus
impacting the firm as well as providers unconstructively. The
entire market has been greatly undermined by the political and
fiscal vagueness as well as other restrictions.
Research and Development Expenditures higher than of
Business Rivals
Apple has operated exceptionally hard in order to attain this and
as such, incurred more costs for development and research than
contestants. The heightened expenditure unconstructively
impacts income margin and with contestants reduction to product
prices, it becomes complex to contend on the same playing field.
General and Administrative Expenses are more than
their Rivals’
Growth into international outlets has led to an increase in the
company’s expenditures. Marketing expenses for promotion of its
exceptional operating system and its innovative equipment also
impacts the bottom line, though the costs are essential.
Contestants also have the capability of benefiting from comfort of
application of operating systems that manage substantial quantity
of market share therefore, they fail to use as such for purposes of
advertising operating system.
Justifications
Apple has the ability to enhance diversification by introduction of
new products into the market. By ushering new products, it will
be able to edge its market share since majority of people have the
desire for attractive and the latest products in the market. Apple is
also renowned as a trendsetter in fields of personal computers,
operating systems, individual music machines, software
applications, cell phones as well as advertising and retail. Apple is
committed to concentrate its central strengths with senior leaders

8. in management of iPods, Macs, software applications,
international marketing and computer engineering. In the
approach of differentiation, Apple attempts to be exceptional in
the industry about aspects that the purchasers esteem (Moriane,
2004). It picks on one or more features that majority of
purchasers in the industry consider significant and positions itself
exclusively to fulfill such wants. Apple has also formulated its core
strength of understanding purchasers and formulating products
in order to improve digital ways of life. Through persisting to
devote in raising customer insights, the company transforms the
lessons into products presenting exclusive attributes and
requiring a high price.
Company’s Resources, Capabilities and Competencies
The competencies of the company are focused in markets of
learning and innovative expert fields. Apple has already
established supremacy in both fields and continues to concentrate
on them. It has already started enlarging its retail channels in
order to get its products to the people and is achieving great steps
in the world of music. These improvement also keep the clients
focused and deliver sizeable revenue. Apple’s engineering,
innovative capacities as well as scientific Advancement abilities
are highly significant aspects that are competitive assets of the
company. The outstanding creativity is the most noteworthy
source of the company’s competitiveness in the long term. The
most significant abilities and resources of the corporation are the
top leaders in the company, Steve Jobs and the incorporated
software and hardware system the company has efficiently
promoted and established to acquire value. Whilst the designers
of the company, engineers and IT experts comprise the major
resources, the capacity of the company in exploiting their talents
to build products is its main capability (Zhouying & Ying, 2011).
Assessment of Apple’s Value Chain

9. The main actions of Apple in its value chain differ slightly from
the conventional model where materials get worked into finished
products for retail to a buyer, earning value in every step of the
process. The major activities of the company in its value chain are
reliant greatly on reinforcement activities of human resources and
management. Apple also constantly attempts to employ the most
experienced and capable individuals to guarantee it shines at
development and research of its programs and technology
(Naraine, 2004). As a matter of fact, Apple repeatedly offers
examinations and skill challenges to help recruiters sort through
enormous curricula vitae they receive. Next to employees, a large
section of expenditure structure goes to systems and
infrastructure. Apple’s in-house software and computers make it
possible for it to carry out service, operations, sales and supply.
Every action adds to the value chain by increasing the company’s
income.
Through transferring activities geographically, Apple is able to
take advantage of diversity from the viewpoint of human
resources, lowering wages in other countries apart from the US.
Application of the competencies of Apple in different product
markets lowers the reliance of Apple on profits from one market.
Related diversification makes it possible for the company to share
its activities, technologies and resources across different product
lines and transfer of skills and intangible core competencies also
offers successful avenue for acquisition of significant market
share. On top of this, affiliations with other powerful brand names
helps boost the promotion experience of Apple and it boosts
customer confidence (Zhouying & Ying, 2011).
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10. References
Boutellier, R., Gassmann, O., & Von Zedtwitz, M.
(2008). Managing global innovation: uncovering the secrets of
future competitiveness. California: Springer.
Hitt, M. A., Ireland, R. D., &Hoskisson, R. E. (2013). Strategic
management: Concepts and cases: Competiveness and
globalization (10th ed.). Mason, OH: South-Western Cengage
Learning.
Naraine, R. (2004). Apple: Real Networks hacked iPod. Retrieved
from http://www.internetnews.com/bus-
news/article.php/3387871
Rezvani, M., Gilaninia, S., &Mousavian, S. J. (2011). Strategic
planning: a tool for managing organizations in competitive
environments. Australian Journal of Basic & Applied Sciences,
5(9) 1537-1546.
Zhouying, J., & Ying, B. (2011). Sustainable development and
long-term strategic management. World Future Review, 3(2) 49-
69.