Running head: APPLE INC, USA

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Table of Contents

Apple Inc, USA

1.

Introduction........................................................................................................................5
1.1

1.2

2.

3.

4.

5.

6.

Apples history and background..................................................................................5

Size of the company....................................................................................................5

1.3

Apples operational activities......................................................................................6

1.4

Core strategy................................................................................................................6

Business model...................................................................................................................6
2.1

Apples product & services.........................................................................................7

2.2

Customers of Apple.....................................................................................................7

2.3

Revenue of the company.............................................................................................7

Value & Supply chain analysis...........................................................................................8

3.1

Value Chain analysis....................................................................................................8

3.2

How Apple is adding value..........................................................................................8

3.3

Cost Reduction strategy...............................................................................................8

3.4

Supply Chain Analysis................................................................................................9

Competitive forces & Market conditions...........................................................................9

4.1

Market conditions........................................................................................................9

4.2

Threats.......................................................................................................................10

4.3

Main competitors.......................................................................................................10

4.4

Competitive advantage..............................................................................................11

Information Systems & Information Technologies..........................................................11

5.1

IS supports business functions...................................................................................11

5.2

IS supports employees & managers in decision........................................................11

5.3

IS supports in strategic decisions...............................................................................11

Global Context & External Environment.........................................................................12

6.1

Political Factors.........................................................................................................12

Apple Inc, USA

6.2
7.

8.

9.

Social Factors............................................................................................................12

Organization and management.........................................................................................12

7.1

Organizational structure............................................................................................12

7.2

Organizational culture...............................................................................................13

7.3

Some internal issues..................................................................................................13

Ethical Issues....................................................................................................................13
8.1

Underage employees issues.......................................................................................14

8.2

Bribery issues............................................................................................................14

8.3

Overcome underage issues........................................................................................14

8.4

Overcome bribery issues...........................................................................................14

8.5

Corporate social responsibilities................................................................................15

Conclusion........................................................................................................................15

References................................................................................................................................16

Apple Inc, USA

1.

Introduction

1.1

Apples history and background

Apple Inc., in the past as Apple Computer, was built up in 1976. It was the 1st of April

in Cupertino, California and was owned by Mr. Steve Jobs, Mr. Steve Wozniak and by Mr.
Ronald Wayne. The organization was producing electronics for consumers especially PCs,
peripherals and computing devices including displays and printers. Regardless of surprising
figures of Macintosh PCs which were sold and as a result the sales went up, but in 1984
Apple fell into serious crisis (Pride, 2008). In spite of the fact that Apple PCs achieved the
sales figure which results in success to them but regardless in market share they were left
behind, from its rivals like IBM.
As indicated by the critics that for entry of Apple in consumer market was slow due
to unavailability of the products/ softwares which supports Apple machines furthermore the
products went for a particular segment of consumers (Andrews & Smith, 1996, p.182). In the
history of Apple, the initial 30 years were loaded with good and bad times and organization
needed strength until 21st century. Machines didnt have a proper media player and clients
depended on other external softwares like SoundJam MP or Audion (Erdem & Swait, 2004,
p.196).

Apple Inc, USA

Understanding the necessity of a good media player for the Mac machines, Apple
bought the licenses for SoundJam media player in the year of 2000 from Greene & Casady,
which later became the premises of iTunes (Pride, 2008). For around 20 long years, Apple
was predominantly the producer of Personal Computers (PCs) which involves Apple I, II,
III , the Macintosh, and the power Mac lines. They have also seen the unstable sales and the
low market shares as well. Steven Jobs left the organization in 1985 because of infighting but
afterwards he rejoined as a CEO of the Apple in 1996. He carried with him a change and new
philosophy of simple design and identifiable products (Harris, 2014).
In 2001, he presented an incredible achievement of iPod MP, Apple turned out a
leader in electronics industry for consumers. He dropped the name of ''computer'' and started
to release iPhone and iPad (Erdem & Swait, 2004, p.196). In current era Apple is the biggest
company of technology in the world, having the revenue more than $60 billion for every
annum.

1.2

Size of the company

In 28th of September, 2013 the organization approximately had full time employees

of around 80,300. There were 4100 employee extra on temporary basis and few of them were
the contractors. More or less the totals of 42,800 full-time employees are working in the
segment of companys retail sector (Dobrzanski et al., 2001, p.17). The huge amount of
employees of Apple Inc are exceeding around 2000 or more individuals. Apple is considered
as a huge organization which has more departmentalization, more specialization and more
rule as compared to small companies.

Apple Inc, USA

1.3

Apples operational activities

Like different companies, all departments of Apple Inc. are created by putting the

comparable functions in groups. Apples primary divisions which are finance, human
resource, productions and marketing are implemented by functional approach (Harris, 2014).
The production activities are linked with the operational management.
In Apple Inc, people make group together based on their resources and expertise. It
empowered the Apple Inc. to gain from its capacities. The current structure has concentrated
on the activities which diminish the expenses and build the adaptability in the operations.
Managers of Apple have a control on the activities of organization and avoiding tall and other
hierarchies (Andrews & Smith, 1996, p.182). The flat structure has decentralized the
responsibilities and authorities of the management. The employees and management at lower
levels in hierarchy are urged to join in encouraging the organization's qualities. The benefits
of decentralization are various i.e. control processes, improving the decision making and
planning (Pride, 2008). Apple Inc. has concentrated on the marketing operations and
specifically on the major areas like iTunes and iPod. The marketing division has shown an
extraordinary responsiveness to the world.

1.4

Core strategy
Apple Incs core strategy concentrates on how organizations' business targets can be

achieved after the strategies have been set (Harris, 2014). It comprises of three main
components which encourage the accomplishments of business objectives, which are; setting
up a competitive advantage, competitor targets and target markets. Apples core strategy is to
grab the open door which the changing in human nature shows in an orientation of marketing
to shore up its patronage and sales (Dobrzanski et al., 2001, p.17). Customer will promptly
need to get rid of an old product when another colorful +model of product is introduced in the

Apple Inc, USA

market. This provides massive chances for organizations that maintain the philosophy of
business of marketing to take benefit of the flexibility of market.

2.

Business model
Business model deals with the technique for doing business to create revenues by
which an organization maintains itself in the aggressive market place (Pride, 2008).

2.1

Apples product & services

Apple deals with the consumer electronics products, commercial servers and

computer software. When its about technology, Apple itself is a best example, the technology
which they initiated since they launched until today. Even though there were issues in some
software which they introduced and also in their OS operating systems which was not
friendly user (Erdem & Swait, 2004, p.196). But Apple continue recognizing the issue
effectively and efficiently, as using Microsofts software of power point contrast with Apple's
software of keynote which dissects PowerPoint and makes sense of how the documents
function which makes it more easy to understand. Apple is famous to present the finest touch
sensor which involves iPad, iPod, iPhone, and Mac (Travlos, 2012). Among them the best
case is iPhone as it is the leader in market of smart phone technology as well as introduced
the best system of touch screen so far in this competitive market.
Apple's Smartphone shares worldwide boost around 17% because of iPhone sales
which came to about 7 million in the year of 2009. At the same time they began to sell their
iPhone in China but Chinese made a duplicate form of iPhone with distinctive software yet
not able to defeat the original one obviously (Travlos, 2012).

Apple Inc, USA

2.2

Customers of Apple
Clients and customers are main considerations for any organization. Clients are the

beneficiary who buys the product of an organization as well as they are those who influence
the market of an organization. Apple follows the business of B2C where the organization
offers the products to their consumers (Dobrzanski et al., 2001, p.17). In the starting Apple
was mainly targeting the professional customers because their products were created for
graphical performance however it then changes to individual client when Apple began to
launch mp3 player such as iPod and the best gadget which is iPhone. It is essential for a
company to maintain client relationship by satisfying the consumer loyalty so that the
organization will have the ability to get support consistently from their clients
(Search.proquest.com, 2015).
And to accomplish that, Apple has given their services through worldwide franchise,
internet and phone and because of that, their customer can buy Apple products sitting in their
homes by either calling the company or by clicking on their websites with free charges of
delivery which is exceptionally helpful to their customers (Ferrell & Hartline, 2012). In
addition, Apple gives warranty as well as latest update to the entire range of products. In past
couple of years, Apple is continuously providing services through a wide range of techniques.
IPhone customer really believes that Apple is treating their customers as their closest
companions because customers can easily find Apple store in the majority of shopping
centers.

2.3

Revenue of the company

In 2014 Apple reported its most astounding annual revenue with around 182.8 billion

USD generated. More than 100 billion USD of this was produced by iPhone sales, which

Apple Inc, USA

means that these smart gadgets were in charge of 56.2% average of the organization's total
revenue as the year progressed (Fogliasso & Williams, 2014). IPhone sales came to very
nearly 170 million units, which is no doubt a considerable increment compared with 150
million units which were sold in 2013 & 2010. Apple stays the leaders in business market in
the industry of Smartphone and with the iPhone adding 15.5 % of others new Smartphone
sales toward the start of 2014 (Statista, 2015).

Apple Inc, USA

10

200
180
160
140
120
100

Fiscal Year

80

156.5

60

182.8

108.2

40

65.2

20
0

170.9

8.2

13.9

19.3

24.6

2004

2005

2006

2007

37.5

42.9

2008

2009

2010

2011

2012

2013

2014

Also, Apple had expanded sales of iPad, with shipments reached around 26 million

Total
Net
Sales
in
Billio
n
U.S
Dolla
rs

Apple Inc, USA

11

units in 2014s first quarter, winning the organization revenue of very nearly 11.5 billion
USD (Statista, 2015). Generally the iPad contributed a normal share of 16.2 5% in 2014. This
results in making the organization's second best successful product after iPhone. But in recent
years Apple has seen its share drop because of expanding competition from other vendors of
tablet which are Lenovo and Samsung (Statista, 2015). Thus the worldwide market share of
iPad remained at 22.8 % in 2014s third quarter, a sharp differentiation to share of 60.3 % it
enjoyed in 2012s second quarter.

3.

Value & Supply Chain Analysis.

3.1

The Value Chain analysis

The idea was presented in 1980s by Michael Porter. Many organizations and

businesses have some processes or activities which add value to that organization. And when
such activities are connected together they shape value chain. Usually the activities of value
chain involve factors for example, marketing, distribution, product manufacturing and
purchasing process. Apple Inc has finished their 30 years in the business (Ferrell & Hartline,
2012).
This journey of thirty year has been loaded with good and bad times. It is pretty clear
with creative business like Apple. Steven Jobs, leader of this company has been in charge of
rapid progress in Apple. Few booming products have been released by Apple. However on
some occasion huge losses were also borne by them. During 1996-97 Apple was striving very
hard, but within 13 years Apples share value climbed through skies. The year of 2010 was
wonderful for Apple as its share value went forward of Microsoft (Dobrzanski et al., 2001,
p.17).

Apple Inc, USA

3.2

12

How Apple is adding value

The supplier change for Macintosh from the IBM to Intel enhanced the performance

of the system while holding the value with respect to price to their customers. The main
variable to oversee for Apple's situation is the preferences of consumers
(Search.proquest.com, 2015). The role of providing differentiating through unique features,
with promotion to make awareness of the brand, brand equity and image which gets
imperative for organizations like Apple.

3.3

Cost Reduction strategy

As indicated by Michael Porter, organizations should develop a unique configuration

of value chain in order to maintain the competitive advantage. Apple has decided to develop
over the chain: the Cupertino organization claims its own stage (iOS), improved with
contents (e.g. video, music, apps) and services (e.g. iCloud, iTunes) and an extraordinary
experience of product; and its has solid control over supply chain which behave as vertically
integrated organization, pushing costs/expenses down (Search.proquest.com, 2015).

3.4

Supply Chain Analysis

Supply chain management arises in information channels such as in transmission of

data, flow of people, money, goods and resources. The most famous organization Apple Inc
has released iPad, which is known as a future of computing and mobile devices (Carlson,
2015). The issue was because of the large sales of new iPad tablets. Organization was
enforced to delay the international shipments. The supply chain risks are interconnected. One
of the reasons in delaying of iPad was the fact that organization didnt forecast the high

Apple Inc, USA

13

demand of iPad. And in the first week they have shipped around 500,000 iPads and taken an
enormous number of pre-orders.
The main bases of customers of Apple are in US and its output is engaged there. In
quarter of December the international sales represented 58 percent revenue of Apple as
compared to previous year revenue which was 46%. Even though international markets are
essential to Apple's development, investors seemed resolute by delay and the organization's
shares climbed more than 1% (Sernovitz, 2009). This most recent delay was second time that
Apple has delayed the iPad shipments (Ferrell & Hartline, 2012). In January, they had
declared that the gadgets would be worldwide sold in March. After investigators reported the
delay in the production so they postponed the iPad launch in US and in April it was launched
worldwide. The reasons for causing these delays are combination of both, marketing strategy
and supply chain issues (Sernovitz, 2009).

4.

Competitive forces & Market conditions

4.1

Market conditions
In 2012, CEO of Apple (Tim Cook) referred that they are quite excited with iPhone

sale which was approximately more than 35 million and sale of iPads were 12 million in the
quarter of March. He likewise said that the creative iPad is headed towards an enormous
starting with new advancement which can only be delivered by Apple. In addition, the iPad
sales, iPhone and Mac have expanded around 188% and 7%, respectively (Shostack, 1977).
Then again, the sale of iPod fall down which was 15%. In 2012, the figures of Q2 are less as
compared to Q1 (2012). Apple sold almost 5.2 million Macs in that period, iPhones of 37.04

Apple Inc, USA

14

Million and iPads of 15.43, even though the sale of iPod was better with units of around 15.4
million (Statista, 2015).

4.2

Threats
Rapid change in technology is one of the greatest threats which Apple is experiencing

nowadays. The consumers are turn out to be technology lover and in this short span of time
they need more new innovative products and due to this organizations are confronting
pressure. So the competition is high and the organizations who are not able to remain
themselves with this competition in no time be unsuccessful. One of the threats is that in USA
increment in Tax will adversely affect the growth of Apple. Only Samsung is the providing
Apple the application processors and they had asked them to pay higher cost for it. Apple
must be asked to pay more as there are no other alternatives who can give application
processors to Apple. In mobile market iOSs major competitor is Android OS. Apple iOSs
power can be commanded by OS - Android.

Apple Inc, USA

4.3

15

Main competitors
Apple enormous achievement attracts responses of competitive. PCs today are turning

out to be more commodity product (Kotler, 2002) It results Lenovo, HP and Dell compete to
seek provide best-cost and low-cost strategies by offering alternatives at different costs to the
clients. If Apple is not able to successfully compete, it confronts the danger of losing the
market share of its PC (Fogliasso & Williams, 2014). The quick development by Microsoft
which launched new versions at regular intervals (every 2 years) will make Apple into
pressure (as an example Microsoft Windows can run on computers of Dell). Apple finds no
other opportunity to catch new technologies specifically on hardware. For this situation,
Apple develops software system which is highly integrated with designed particularly for the
hardware which keeps running on.

4.4

Competitive advantage
In todays worldwide electronic business Apple enjoys to be the leader who always

takes the benefit of innovation. Apples innovative products like iPod, iPhone, iTunes and
Mac drives the organization for an incredible achievement as they have one of a kind product
features of elegant design and ease of use (Kotler, 2002). Through advancement of such
unique features which is not copied easily by its competitors, Apple can differentiate itself
and can get the chance for market expansion (Kotler, 2002).

Apple Inc, USA

5.

16

Information Systems & Information Technologies

5.1

IS supports business functions

Production and manufacturing systems: IS supply information to monitor, control and

work the process of production, for example, quality control, resource management,
engineering, scheduling, purchasing, receiving and shipping so forth (Technology, 1998). For
example, IS system in Apples factory measures samples of their products and receive the
information from that. Later they analyze the samples statistically and demonstrate that
operators must take corrective actions or not (Luther, 2001).
Marketing and Sales systems: IS also support the functions of marketing and sales by
facilitating the movement goods and services from manufacturers to customers. Example: In
Apple their stores sale system will record automatically and it totals the purchase
transactions as well as print out its packing list (Fogliasso & Williams, 2014). This helps
Apple to enhance the service towards customers and also maintains the data of customers.

5.2

IS supports employees & managers in decision

IS takes information as an input and after that it forwards to create information. Such

information is utilized by managers for the organizational change. Example: In Apple their
existing customers information are available in bank which are analyzed by IS. Later,
significant information are generated like good employees and bad employees etc. Such data
can be utilized by managers when making decisions for organization (Shostack, 1977).

5.3

IS supports in strategic decisions

Once the data has been analyzed which were gathered from various sources, IS can

give valuable data, for example, which products to launch and in which area; so that

Apple Inc, USA

17

organization can take advantage over their rivals utilizing this data. IS helps Apple to secure
and manage its essential employees, customers and corporate information. IS enhances work
process and provides many other advantages to Apple (Solomon, Marshall & Stuart, 2011).
For example TPS- Transaction processing systems which are utilized in Apples functional
area, this processes the transactions in routine more efficiently and accurately.

6.

Global Context & External Environment

6.1

Political Factors
There are numerous issues which are uncontrollable by the organization, for

example, health issues, authority to work, war against terrorism, geopolitical uncertainties
which can globally affect the product sales of Apple (Cummings et al., 2002, p.17). As to
decrease an operating cost of Apple, it has outsourced itself in various nations like Cork,
Czech Republic, Korea and china (Luther, 2001). If these nations face any sort of political
unsteadiness or any issues which delays in operations of manufacturing, this will ruin the
likeness of Apple in the view of its dealers and customers.

6.2

Social Factors
The quality and the design are the two factors which have always been as the front

product for Apple. The pattern of buying the luxury products are climbing up due to the fact
that the buying power of the customers has ascended. Every individual wants to purchase
iPod, iPhone and iPad. Having iTunes as the music store in Apply, the number of listeners in
the music industry has been expanded and its a big social impact (Solomon, Marshall &
Stuart, 2011).

Apple Inc, USA

7.

18

Organization and management

7.1

Organizational structure
Apples organizational structure is very effective with respect to empowerment and

innovation. Their policies are quicker and easier to implement, Apple Inc, is popular for
unique competence in its product innovation design (Luther, 2001). Apple is following a
functional organizational structure as they are very well sorted/organized along with the
functional line. However one disadvantage is that if organization has to change its culture and
leadership, which can create a damaging outcome because some parts of the strategies are not
fixed. This was the situation when Jobs resigned and every single other successor battled with
the company until he was reinstated later.

7.2

Organizational culture
Apple is following the role culture and they have bureaucratic type of culture. Apple

is very much adheres to the guidelines and rules of the organization. By following this
culture, Apple have a tendency to work as solid pillars, where value of individual have less
significance, while the positions play essential roles (MIT Sloan Management Review, 2008).
They are involved in a secrecy level as at all points opinions of individual are not accepted
and due to this some flaws in communication were also faced. While considering the view of
HR, this has affected the development of products at different stages. While concerning the
perspective of product development, this was demonstrated a more demanding and
challenging quality of huge significance (Cummings et al., 2002, p.17).

Apple Inc, USA

7.3

19

Some Internal Issues

Apple Incs finance treasure department gives financial policies to the organization.

This division is in charge of handing the companys international capital transaction, risk
management and liquidity guaranteeing. In Apple Inc. Financial managers role is vital for
overseeing the strategic management (Technology, 1998). For R&D the capital is raised by
Finance division who keeps up Apples development position. Internal problems were the
sale getting to the corporations (Jefferson & Anthony, 2014).
Apple depended on 300 manufacturers whereas IBM had almost 6000 to 7000
immediate salesman. So Apple has concentrated to build up more staff for sales. Numerous
issues focusing on to sales person were observed with respect to the costs of products. The
marketing problem in Apple Inc. was also failed as they didnt communicate properly the
Macintoshs image in business market (MIT Sloan Management Review, 2008). This was due
to the reason that the marketing strategy was not meeting the requirements which in the result
didnt make it popular in business market. It additionally did not concentrate on technology.
Products are made as per the needs of customer and Apple required that major significance
for getting near to the business market.

8.

Ethical Issues
8.1

Indentured servitude issues

Apple audit has uncovered a system where their employees need to pay recruitment

charges which bond them to indentured servitude. And these will cause the workers to pay
out loads of fees of recruitment and this will force those workers to work with the company.
Such issue is linked with violations of human rights (McCormick, 2014). Workers feel

Apple Inc, USA

20

hesitant to work in the company; however they have no other option. Such issue will affect
them to harm themselves, for example, suicide.

8.2

Bribery issues
Bribery issues happen in the organization cause workers to feel hesitant to proceed

with stay in the company. This happens due to the organization doesn't have proper
management and workers feel that the company is dishonest and then they leave at the
earliest (Jefferson & Anthony, 2014). In Apple manager sometimes get affected by such
bribery issues. Bribery issues causes managers fail in their performance. And customer also
observes and notifies such issues which make them to run away from organization. This is
due to they feel that organization is irresponsible with respect to their ethical problems. And
as a result they will discover other organization (Kerin & Hartley, 2015).

8.3

Overcome issues of indentured servitude

Apple must consider this issue very seriously. Employees who are not volunteering

themselves to work, its better for them to leave the organization (Kerin & Hartley, 2015). If
not, later on they had made a number of issues. This will result in workers to do suicide. This
can demonstrates that they are really miserable and hesitant to work. Apple must meet each of
the employees and allow them to share their views. Other than that, HR must utilize an
ethical approach to employ the right employee. Individuals have the privilege to pick which
organization they want to work. Apple must treat proper to each workers and providing them
support in order to increase their level of confidence (Jefferson & Anthony, 2014).

Apple Inc, USA

8.4

21

Overcome bribery issues

Apple must seriously consider this issue because this will impact the stakeholders. In

order to resolve such issues, Apple has to find out that how it happens. They must know how
seriously this problem is affecting the working environment (Andrews & Smith, 1996,
p.182). As bribery is illegal in workplaces, so organization have to handle it by utilizing
simplest and prompt way. If it cannot be well handled then organization make legitimate
move. It is necessary to arrange meetings with every manager and to discuss about these
issues. While meeting they must address these problems and find out the ways of solving it.
Other than that, organization additionally needs to have a meeting with each employee, in
order to minimize the bribery issues.

8.5

Corporate social responsibilities

Report of Apples supplier responsibility uncovers that the organization is making a

move to stop practices like unethical or dishonest among their suppliers. These issues like
underage employees, bribery issues, dangerous working conditions and misrepresentation of
audit documents should be prevented (Harris, 2014). Apples employee development and
education program allow employees to enhance their knowledge in various subjects.
Moreover, recently Apple has joined the association of fair labor whose slogan is Improving
life of workers worldwide (McCormick, 2014).

Apple Inc, USA

9.

22

Conclusion
It is cleared that Apple has numerous great approaches which are quality for the
organization including leading, strong management, dedicated people and skilled resources.
But also it has been observed that organization's culture is not up to date which is described
by lack of ethical and absence of people alignment with companys strategy (Jefferson &
Anthony, 2014). Therefore change in culture of an organization is essential and must be fast
approaching to sustain suture success (Cummings et al., 2002, p.17). Initiatives must be taken
by future leaders to address such issues, their implementation and openness to change
organization would be important element to achievement. It also has to be observed that if
Apple has found an immaculate successor (Mr. Cook) as compared to Steve Jobs, a leader
who always has been in front of competitors to make clear vision for future.

Apple Inc, USA

23

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