In year 2005, Apple Inc had controlled 4.2% of the US PC market. The revolutionary iPods had controlled 70% of the hard drive MP3 player market. Apple Inc sits on the throne when it comes to the mobile phone market, generating over 71% of the industry’s profit and 6.5% of the international mobile phone market. (OPPapers.com 2012).
This puts Apple Inc in one of the top positions when it comes to music players and mobile devices.
(The graph shows it all)
(Source: Company filings)
Lets look at the macro factors, it will give us a clearer on Apple Inc's situation and see how factors such as political, economic, social, technology, legal and environmental analysis helps determine the current situation of Apple Inc., identifying potential influences of the political, economic, social and technological sectors; and maybe predict the future of Apple.
Political Influences:
In 2007, it was reported that 52% of Apple's sales came from outside the USA. The influence of war and terrorism might very well have been the primary cause of this.
These are factors that no company large or small can control, not even Apple. Much of Apple's production is based overseas in countries such as Korea, China, Czech Republic, Cork and Ireland, this gives Apple an absolute advantage. Any political conflicts between either of these countries and the USA will most likely result in a decrease in production accretion..
Economic Influences:
The global economic depression might have an immense impact on Apple Inc. With inflation soaring
high and a stagnant or decrease in consumer salaries, coupled with ever increasing unemployment rates, consumers will less likely splurge on 'luxury' products. Not forgetting the devaluation of the U.S dollar which would result in a loss in the currency exchange process. However the astute Apple purchased much foreign currency to minimize the economic repercussions. On the contrary, I found out that while the U.S dollar depreciated, Apple's international market revenues rose.
Social Influences:
Globalization includes the interaction of people worldwide, in which technology plays the main
role. Imagine what the world would be like without technological devices such as computers and mobile phones. Many regard Apple Inc as the King of technology as a result of widely accepted design and quality.
The other big social influence is the music industry, which over the last decade has become one of the most lucrative industries. Apple took advantage of this and developed the largest virtual media store, iTunes, which is currently well ahead of its competitors in this field. Although media piracy might pose a threat, another factor has politically made it illegal to do so, invoking deterrence, namely the government.
Apple Inc portrays the modern individual’s lifestyle, combining technology with design. Apple in this aspect has created a strong brand image and attracted a large pool of loyal customers. Hence social influences have positive effects on Apple Inc.
Technological Influences:
The market for computers and mobile phones has grown in astronomical proportions and competitiveness. Technology innovations and changes are ever changing dynamically, what is defined as advanced today might become obsolete the very next. As a result, a products' life cycle is very short. Investing largely in Research and Product Development is key to a success. People want innovation and Apple is constantly bringing its 'A-game' into the market. This might spin off a series of 'copy-cat' competitors. However, innovation occupies a large part of Apple's brand image and it has been statistically proven to have paid off.
(Refer to statistic image in Introduction)
Legal Factors:
In a technology centred industry, patents are what protects a businesses' blueprint from being infringed.
In August 2011, Apple and Samsung were litigating 19 ongoing cases in nine countries; by October, it increased to ten countries. ("Every Place Samsung and Apple Are Suing Each Other". PC Magazine. Ziff Davis)
By July 2012, the two companies were still embroiled in more than 50 lawsuits around the globe, with billions of dollars in damages claimed between them(Source: Company filings)
Lets look at the macro factors, it will give us a clearer on Apple Inc's situation and see how factors such as political, economic, social, technology, legal and environmental analysis helps determine the current situation of Apple Inc., identifying potential influences of the political, economic, social and technological sectors; and maybe predict the future of Apple.
Political Influences:
In 2007, it was reported that 52% of Apple's sales came from outside the USA. The influence of war and terrorism might very well have been the primary cause of this.
These are factors that no company large or small can control, not even Apple. Much of Apple's production is based overseas in countries such as Korea, China, Czech Republic, Cork and Ireland, this gives Apple an absolute advantage. Any political conflicts between either of these countries and the USA will most likely result in a decrease in production accretion..
Economic Influences:
The global economic depression might have an immense impact on Apple Inc. With inflation soaring
high and a stagnant or decrease in consumer salaries, coupled with ever increasing unemployment rates, consumers will less likely splurge on 'luxury' products. Not forgetting the devaluation of the U.S dollar which would result in a loss in the currency exchange process. However the astute Apple purchased much foreign currency to minimize the economic repercussions. On the contrary, I found out that while the U.S dollar depreciated, Apple's international market revenues rose.
Social Influences:
Globalization includes the interaction of people worldwide, in which technology plays the main
role. Imagine what the world would be like without technological devices such as computers and mobile phones. Many regard Apple Inc as the King of technology as a result of widely accepted design and quality.
The other big social influence is the music industry, which over the last decade has become one of the most lucrative industries. Apple took advantage of this and developed the largest virtual media store, iTunes, which is currently well ahead of its competitors in this field. Although media piracy might pose a threat, another factor has politically made it illegal to do so, invoking deterrence, namely the government.
Apple Inc portrays the modern individual’s lifestyle, combining technology with design. Apple in this aspect has created a strong brand image and attracted a large pool of loyal customers. Hence social influences have positive effects on Apple Inc.
Technological Influences:
The market for computers and mobile phones has grown in astronomical proportions and competitiveness. Technology innovations and changes are ever changing dynamically, what is defined as advanced today might become obsolete the very next. As a result, a products' life cycle is very short. Investing largely in Research and Product Development is key to a success. People want innovation and Apple is constantly bringing its 'A-game' into the market. This might spin off a series of 'copy-cat' competitors. However, innovation occupies a large part of Apple's brand image and it has been statistically proven to have paid off.
(Refer to statistic image in Introduction)
Legal Factors:
In a technology centred industry, patents are what protects a businesses' blueprint from being infringed.
In August 2011, Apple and Samsung were litigating 19 ongoing cases in nine countries; by October, it increased to ten countries. ("Every Place Samsung and Apple Are Suing Each Other". PC Magazine. Ziff Davis)
Mueller, Florian "Apple seeks $2.5 billion in damages from Samsung, offers half a cent per standard-essential patent". FOSS Patents.
Nokia has filed various lawsuits against Apple Inc, claiming the violation of 13 additional patents by iPhone, iPad and iPod touch, this apart from US complains covering 24 Nokia patents. Also, in China Apple Inc has been fighting the battle for its right to the iPad trademark.
Apple has been going through a storm of legal battles back to back, despite this Apple is still seen as the leading brand in technology devices.
Environmental Factors:
Apple adopts a comprehensive life cycle analysis approach to determine the contributing factors of greenhouse gas emissions generated from the manufacturing, transportation, use, and recycling of products, as well as the emissions generated by their facilities. 98% of Apple's carbon footprint is directly related to their products and the remaining 2% is produced from facilties.
(Source: Apple published reports)
Apple is of one of the companies that has achieved 100% renewable energy at all their data centers, at facilities in Austin, Elk Grove, Cork, and Munich, and at the Infinite Loop campus in Cupertino. On average, Apple is at 75% worldwide when renewable energy is concerned. Apple claims to strive till the target of 100% is reached.
(Source: Apple published reports)
In this analysis it is clear that Apple is headed generally towards the right direction and know what they are doing. However under a VRIO analysis Apple still has much to accomplish under the factor(s) of immitability which led to their biggest problem, the numerous legal disputes. A stronger competitive advantage is required if Apple were to go even further.
No comments:
Post a Comment