This analysis was conducted as an external examination of Apple, INC. It is apparent that many threats and opportunities exist in the environment. These topics range from political and legal implications to major competition with in the market; this makes the external environment for Apple volatile, but favorable. Following are top threats and opportunities for the company in many of the macro-environmental and business ecosystem sectors, with a concentration on a selection of the top concepts from both.
Economic factors such as monopolistic competition, which characterizes the entire computer industry, drives the industry towards many major goals and presents a unique opportunity as society relies heavily on technology. The high number of firms, ranging from Asus to Lenovo, show how this competition can create other threats such as low switching and searching cost for consumers (“Global Business Environment Analysis of Apple”, 2009). In the geo-political sector, expanding business to foreign countries, in the WTO, these countries have lower investment barriers and market barriers (“Global Business Environment Analysis of Apple”, 2009).
These lenient restrictions allow companies, like Apple and their competitors, to take advantage of low labor costs and potential markets. Apple is majorly affected by technology, mostly hardware and software, and other innovation forces within the industry. “Rapid innovation on hardware by component producers (e. g. Intel, AMD) and software by competitors (e. g. Microsoft) as well as complementary products from partner gives no choice for Apple except responsively catching the new hardware technology and also continuously innovating to sustain differentiation” (“Global Business Environment Analysis of Apple”, 2009).
A specific threat for Apple being affected by a competitor is Microsoft and their continuous production of their updated operating system, which releases a new version of Windows no later than every two years. This pressure forces Apple to produce an updated Mac operating system in a competing time frame, or they will easily be overtaken by numerous competing Microsoft based computers. Another threat includes the high switching cost for Microsoft users to switch to Mac users. However a major technological opportunity for Apple is the ability to learn and respond to their competitors’ flaws, such as sustainable manufacturing.
According to an online presentation with its own independent sources, a major threat facing Apple’s socio-cultural environment includes carbon emission and pollution from the production and shipment of their products (Hang, 2013). Although this is specifically classified as a socio-cultural threat, it also relates as a threat to the ecological sector. Currently Samsung Electronics is minimizing their environmental impact of emissions by operating pollution prevention facilities to mitigate the air pollution and minimize facility emissions reducing their hazardous emissions by 40% compared to 2001 (“Samsung Semiconductors Global Site”, 2013).
In the demographic sector, with rising prices and stagnant wages (Hang, 2013), competitors have produced comparable products to sell at lower prices. This is causing a strong shift and threat in Apple’s market. In mobile technology, by looking at the chart below, it is easy to see that Android’s market share has increased at a greater percentage over the past year than Apple. One of Apple’s demographic opportunities is their chance to attract customers that are seeking high valued products (Hang, 2013).
Although competing companies such as Samsung, HTC, and Google have the appealing characteristics of similar technologies at lower costs, Apple still has the opportunity to maintain their innovative/high valued hardware and software. The technology industry has changed quite dramatically, causing competition to rise exponentially, throughout the course of recent history. This is due to companies making advancements to meet the extreme demands for technology, which has multiplied vastly over the past few decades (3). Computer, gadget, and especially phone sales have escalated at an exponential rate (8).
Competitors such as Samsung, Google, and Microsoft all pose threats to the playing field. They have learned and matched the quality that was once exclusive to Apple. Samsung has even released its latest Galaxy, which compares directly to the iPhone 5 and even offers a few features such as an FM transmitter, offerings to all phone carriers, and even a burst camera setting among other popular features. These competitors also hold top seats in the market distribution of their technology, particularly mobile phones (4).
As the economy has made it harder for individuals to afford high price tags, in the technology sector, the more cost effective computers are slowly winning the day. HP, Dell, and Acer are the current top sellers because of their ability to offer a low priced, base model computer that can handle what an average consumer will need it to (Thadani, 2012). The competition is gearing up to try and take the “tablet” throne from Apple, and thus there must continue to be progress and evolution over the course of the coming years in the tablet industry (9).
In closing, threats in the external environment are abound just as much as opportunities. Apple has to be aware of the strong forces of competition, such as Samsung and Microsoft, making sure to stay ahead and current. Some markets are technologically untapped; Apple has a great opportunity to move into foreign countries where barriers are low and competition is scarce. Other treats include the switching and searching costs associated with the firm, Microsoft is cheaper and very competitive; this causes Microsoft to be a company we must concentrate on to insure success.
Although Apple has taken steps toward sustainability, with the world working towards a sustainable future Samsung is leading the way and therefore must be competed with. With the economy in its current state Apple is threatened by cheaper and equal competitors, this presents an opportunity to get into the “mid-range” market. Although a strong company, Apple still has opportunities for growth and major areas of threatening factors. Sincerely, ————————————————- Bibliography of Sources Utilized 1. Apple – Job Creation. (2013). Apple. Retrieved March 2013, from http://www. apple.
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(2012, May 16). Technology News – CNET News. Retrieved March from http://news. cnet. com/8301-1023_3-57435257-93/samsung-top-cell-phone-maker-though-apples-no-slouch/ 9. Stanley, M. (2011). • Global tablet penetration 2010-2014 | Forecast. • Statista – The Statistics Portal for Market Data, Market Research and Market Studies. Retrieved March from http://www. statista. com/statistics/219909/global-tablet-penetration-forecast/ 10. VanCamp Jr. , B. (2012, May). grow, evolve, learn. | Brian R. VanCamp Jr. – my MBA website. Retrieved March 2013, from http://www. brianvancampjr. com