Research Paper: The Market Situation of Apple Inc.

The Market Situation of Apple Inc.

Introduction

     Apple Inc. is a technology company with its headquarters in Cupertino, a city in the state of California. It is one of the world’s largest information technology companies, specialized in the design, manufacture and large scale sail of communication electronics, computer software and telecommunication services. The products of Apple Inc. include: Apple SIM, TV and Watch, electric vehicles, Software, iPhone, iPod, iPad, Mac and Apple computers. The company has wide market across the world, with more than 450 stores in a number of countries, and has online stores. It has maintained a good corporate social responsibility since its establishment, though there has been some legal and ethical issues facing it like any other corporation. This report addresses the current position of Apple Inc. in the market, describes the identified client problems and discusses the implications of the company if the problems are not addressed. The market situation of the company is then analyzed.

The Current Position in the Market

     As stated by Chen (2015), “Apple is the world's largest information technology company by revenue, the world's largest technology company by total assets, and the world's third-largest mobile phone manufacturer” (Forbes.com). The company has a high position in the market currently, due to the high quality of their products and their reliable customer services. Chen (2015) argues that the company has enlarged its market by establishment of retail stores in many countries across the world. Theses retail stores sell additional third party business commodities that further enlarge the market. According to Verrill (2013), the company has a call center formed by home-based Apple advisors who offer customer support. Verrill argues that the company actively participates in legal issues. For example, it protects and promotes its own intellectual property interests and those of others.

Clients’ Problems

     Clients include, but not limited to retail store employees and market customers. The company has faced a lawsuit by a large number of employees in states like California; this followed unreasonable security searches after day time short breaks, uncompensated line ups and violation of the Fair Labor Standard Act (Widener, 2015). From Cnet.com, Apple is said to be one of the Silicon Valley companies that were identified with legal and ethical issues regarding professional qualification and recruitment. For instance, the company was involved in cold calling, whereby they secure high tech professionals without formal recruitment. According to McMillan (2012), Apple is among the sources of environmental pollution that have been in wrangles with Greenpeace. Their production activities involve burning of natural resources to acquire energy. As far as climate conscious consumption is concerned, Apple still scores slightly above average, and has a lot to do in order to raise the score according to the expectation of the Climate Counts (Climatecount.org, 2015). Ash (2012) argued that Apple Inc. has tried to reduce its level of toxic substance release to the environment, by eliminating the use of materials like PVC, BFRs and arsenic. However, the company still has an issue with the Guide to Green Electronics, since their level of greenhouse gas emission still remains high and with unverified data. The company is also known to avoid taxation, which is its corporate responsibility.

Implications

     If all these problems are not addressed in time, Apple Inc. will maintain and even add to the existing legal and ethical issues. Corporate social responsibility is of importance to the company and needs to be maintained high for good reputation in the market. AS Widener (2015) argues, unregulated searching of employees during the day is a violation of human rights that needs to be avoided; otherwise the lawsuits with ruin the reputation of the company alongside charges by the law. Cold calling may intensify ethical issues in the company and the clients’ trust to the company’s products will be compromised. Apple Inc. needs more efforts towards clean technology, by full elimination of toxin raw materials from the industry; otherwise the company will maintain risks to life of the potential clients (McMillan, 2015). For example the emission of greenhouse gases will negatively affect the climate, putting life at risk.

Analysis of the Market Situation

     Using a SWOT analysis, Apple can be said to be in a competitive market in which it has strengths, weaknesses, opportunities and threats.

Strengths

     As mentioned earlier, the company has notable strengths in the I. T. market such as: Use of clean technology, reduced release of toxic substances, clean and safe products and recognizable attempts towards climate protection (Ash, 2012). The company has a large variety of high quality products and wide spread of retail stores or wide market reach. These strengths make the company a bit competitive in the market

Weaknesses

     From the start, Apple has had a number of issues which have compromised its performance to some extent. McMillan (2012) identifies Greenpeace as one of the antagonists of Apple due to environmental pollution through burning of coal, although this activity has been greatly reduced. The company faces lawsuits by employees due to mistreatment and poor payment of wages as stated by Widener (2015). Another weakness notable in the market is avoidance of tax payment. With these weaknesses, the company faces a challenging competition from other related companies like Samsung and Vodafone in the market.

Opportunities

     Apple has a good business opportunity. This is because of the current rapid growth of telecommunication industry and its needs among the consumers. Telecommunication technology has gained great preference among many consumers, creating great opportunities for such companies. Considering the current position of Apple Inc. in this market, there is a room for future expansion especially if the few threats are eliminated.

Threats

     There are a small number of threats in the IT market, in relation to Apple. The law poses threat to the company due to the employees’ complaints, tax avoidance and cold calling claims. Greenpeace advocates for clean technology, and threatens to close the company’s activities that are associated to pollution technologies (Greenpeace.org).

Internal Environment

     Following the current market situation, there is a challenging competition from related companies, which calls for effective organization of the company. The following figure shows the McKinsey 7s analysis, which crucial to fit the internal environment of such a company in the current market.

                              

McKinsey Framework (Mindtools.com).

Strategy: The Company needs effective plans to be more competitive in the current market.

Structure: Organization of the company in terms of administration and the general staff needs to be more effective and achieved without cold calling.

Systems: Daily activities and routines should conform with the set goals.

Shared values: These are needed to maintain corporate culture.

Style: The style of leadership is good and should be maintained and extended to the retail stores.

Staff: The Company should secure qualified staff and treat them well for good performance.

Skills: Apple is a technology company and needs highly skilled staff for effective competition.

Conclusion

As discussed earlier, Apple is a successful technology company. It has a wide market reach and a large variety of products. There a few weaknesses, which tend to compromise its reputation in the market. However, the company has capabilities to eliminate the issues and perform better, becoming more competitive in the market.

References

Ash, A., Apple power cables to become even more environmentally friendly. Key Noodle. Viewed 14 December, 2015. http://www.keynoodle.com/apple-power-cables-to-become-even-more-environmentally-friendly/. >

Chen, L., 2015, The world's largest tech companies: Apple beats Samsung, Microsoft, Google. Forbes.com. Viewed 14 December, 2015.  <http://www.forbes.com/sites/liyanchen/2015/05/11/the-worlds-largest-tech-companies-apple-beats-samsung-microsoft-google/.>

McMillan, R., 2012, After Greenpeace protests, Apple promises to dump coal power. Wired Magazine. Viewed 14 December, 2025. < http://www.wired.com/2012/05/apple_coal/.> 

Shar, B. How do you like them Apples? Apple, Inc. wins dismissal of class action brought by employees at retail stores in california. Squire Patton Boggs (US) LLP. Viewed 14 December, 2015. http://www.natlawreview.com/article/how-do-you-them-apples-apple-inc-wins-dismissal-class-action-brought-employees >

Verrill, A., 2013,  How Apple gets at-home workers to work. TechCrunch.com. Viewed 14 December, 2015. < http://techcrunch.com/2013/07/28/how-apple-gets-at-home-workers-to-work/?ncid=tcdaily/.>   

Widener, B., 2015, Apple, Amazon and the wage payment issues arising from employee security screenings. The National Law Review. Viewed 14 December, 2015. http://www.natlawreview.com/article/apple-amazon-and-wage-payment-issues-arising-employee-security-screenings >

The Market Situation of Apple Inc. (PPT SPEECH)

Introduction (the presenter should introduce himself/herself) (Slide 2)

     What is the common current market status of technology companies in the world? Which are the leading technology companies in the world today? Which industry is currently showing the fastest growth rate? What are some of the most common issues affecting technology companies in the current world? What are the most common strategies applied to handle such issues? How do such strategies affect the income flows in the companies?

     This is a presentation of the market situation of Apple Inc., which is an information technology company with its headquarters in Cupertino, a city in the state of California. In my presentation, I will cover the current market situation of the company by identifying the issues affecting the company’s market and competition status. I will suggest a strategy to address these issues. My strategy will comprise of set objectives, the appropriate strategic planning models and the expected project budget.

      Apple Inc. is one of the world’s largest information technology companies. It specializes in the design, manufacture and large scale sale of communication electronics, computer software and telecommunication services. The products of Apple Inc. include: Apple SIM, TV and Watch, electric vehicles, Software, iPhone, iPod, iPad, Mac and Apple computers. The company has wide market across the world, with more than 450 stores in a number of countries, and has online stores. It has maintained a good corporate social responsibility since its establishment, though there has been some legal and ethical issues facing it like any other corporation.

Issues Identified with Apple Inc. (Slides 3 -5)

     In my research, I realized that Apple Inc. is one of the most successful companies in the world today. It was established in 1976, and since then the company has shown a tremendous growth up to date. However, like any other corporation, Apple Inc. has encountered a number of challenges along the way. It has successfully tried to cope with most of them, and a few have remained dominant due to the fact that their elimination is associated with other numerous challenges compromising the performance of the company. Some require huge sums of money to be eliminated, others require slow-down of operations or shut-down of some important activities, others require drastic changes in management and staffing strategies while others require changes in the line of production. The most dominant issues are associated to the corporate social responsibility of the corporation, that is, legal and ethical issues.

External environment

     External environment of a company comprises of factors that affect decision making by the management. In an external environment, Apple Inc. has had issues in relation to its corporate social responsibility. Such issues include environmental pollution through burning of fossil fuels like coal to produce energy, release of toxic substances and manufacture of products containing harmful substances like PVCs, BFRs and arsenic. These are environmental hazards that have been compromising the reputation of the company in the market, since environmental pollution negatively affects all the stakeholders. However, the company has made positive attempts in reduction of environmental hazards by establishment of clean technology. The current problem is that the goals set in the cleat technology strategic plans have not yet been achieved fully. The concerned clients have not been satisfied fully. For example, a research conducted by McMillan in 2012 shows that Greenpeace, which the leading environmental conservation non-governmental organization, has been in constant wrangles with Apple Inc. since 1976 due to environmental pollution. The organization has recently recognized Apple Inc. among the companies in the clean technology practice, but with an average rating; this means that Apple Inc. still has something to do about the issue.

     Ash’s research of 2012 reveals that the Climate Counts is another corporation that has been in a constant opposition with Apple Inc., though the company has made some attempts to resolve the issue. The company has been able to score a better mark than before according to the Climate Counts, but still has some points to work for. This means that in terms of climate maintenance, Apple Inc. needs effective strategies to change a certain situation and attain a better one to resolve the issue. For instance, Ash argues that the company’s level of greenhouse gas emission has unverified data; the company still remains one of the agents of climate deterioration.

    In regards to environmental protection, the company faces numerous challenges since all the stakeholders are directly affected by any attempt to pollute the environment. The stakeholders include the potential consumers, governments, non-governmental organizations, other industries, suppliers and retailers. A good relationship with all these is crucial; therefore, the company always needs strategic plans to change such a situation.

Internal environment

     The internal environment of Apple Inc. comprises of all the levels of management, retail store staff and operational setups. The company has been associated with internal issues that extend into ethical issues and ruin its reputation in the market. A lot has to be done. Although the company has already tried to solve the issues, it is not yet 100% successful according to their set goals and objectives. This regards a research by Widener in 2015, which revealed that the company has faced lawsuits by the retail store employees. Most retail employees, who also represent stakeholders within the company, have argued that they have been mistreated in the company by irregular security checks during day time breaks in allegations that some of them are risking the company property. When the company starts facing the law due to employee issues, it displays a very bad picture to the external stakeholders and ruins its reputation in the market. This calls for an effective strategy to change the situation. 

     Another internal issue that brings about ethical issues the cold calling noted in Apple Inc. among other companies, as explained in Cnet.com. This is whereby the recruitment committee decides to recruit high tech professionals in unlawful procedures by directly luring them to join the company as a place of work. The law recommends for formal recruitment in every corporation,; therefore, failure to adhere to this regulation brings about ethical issues to a company and it may face the law as it happened in Apple Inc. and the other involved parties. The company therefore needs strategic plans for effective formal recruitment procedures.

Objectives (Slide 6)

     In regards to the above identified issues, the company needs to set specific objectives before adopting the appropriate strategy to change the unwanted situation. The realizable objectives pertain to the specific issues, which are of different categories in the company. Therefore, I highly recommend the following objectives for the company:

ü  To attain 100% points award by the Climate Counts by reducing the company’s contribution towards climate change to zero.

ü  To be ranked first by the Greenpeace's Guide to Greener Electronics, by producing the minimum possible amount of environmental pollutants.

ü  To attain full satisfaction of retail store employees, consumers in the market and other stakeholders.

ü  To be ranked the best corporation in terms of corporate social responsibility, by governments and non-governmental organizations.

     To realize the above objectives, the strategic management of the company should apply the most appropriate strategies in the form of strategic planning models. There are a number of strategic planning models; therefore, the most appropriate model to be adopted depends on a number of factors within the company. The factors include: Availability of resources, opportunities, the target product market, availability of professional skills, capital and the number of issues facing the company. Two models are effective for Apple Inc. at its current situation. They are issues-based strategic planning model and conventional strategic planning model. The issues-based model should applied first to eliminate the current issues, and then the second model follows to enable the company achieve the set goals. 

Issues-based Strategic Planning Model (Slide 7)

     Since the company ought to address the few it has currently, the best strategic planning model would be “issues-based strategic planning.” The procedure is:

Identify the most important current issues facing the organization.

Suggest action plans to address each issue over the next 6-12 months.

Include that information in a Strategic Plan (McNamara, 2015).

This should be the first strategy for Apple, in order to eliminate the few issues; the strategies for a full pledged corporation should then be applied when the company is free from the existing issues.

Conventional strategic planning model (Slide 8)

     The best strategic model to follow thereafter should be the conventional strategic planning model, whose procedure is:

Develop or update the mission and optionally, vision and/or values statements.

Take a wide look around the outside and a good look inside the organization, and perhaps update the statements as a result.

As a result of this examination, select the multi-year strategies and/or goals to achieve the vision.

Then develop action plans that specify who is going to do what and by when to achieve each goal.

Identify associated plans, for example, staffing, facilities, marketing and financial plans.

Organize items 1-3 into a Strategic Plan and items 4-6 into a separate one-year Operational Plan (McNamara, 2015).

     I prefer the above two strategic models for the company because it has just a few issues to be addressed. It has the characteristics of the company category that needs the issues-based strategic planning model at the moment. When the issues are addressed to some extent, the company will shift to the category that requires the Conventional strategic planning model. The second model becomes more suitable for the company to achieve further objectives, like the targeted 100% satisfaction of the market clients and other stakeholders.

Project budget (Slides 9 & 10)

     Such a project is a bit demanding; most of the issues to be addressed here are very expensive and needs a good amount of financing. This calls for a careful budgeting in order to prevent unexpected losses that may compromise the company’s performance and draw it backwards. Effective of cash flows is needed, and I intend to do this by careful consideration of the current financial status of the company.

     Research from Markets.com shows that the current financial status of the Apple Inc. is quite management-friendly; it has a large net cash flow as shown below.

The proposed project needs a certain cash flow, profit and loss. The budget should not reduce the profit to zero.

Currently, Apple Inc. is worth approximately $203 billion, 90% of which, (La & Paul, 2015), is located U.S for taxation purposes.

Currently, net income = $53,394,000, net cash flow -Operating = $81,266,000, net cash flow -Investing = $56,274,000, net cash flow -Financing = $17,716,000, and the net cash flow = $7,273,000 (Markets.com, 2015).

The cash flow required for this project will fall under net cash flow –Financing.

If the total cost to be incurred on the project is $10,000,000, then the net income should adjust to $63, 394,000 in order to maintain a net cash flow of $7273,000; the $10,000,000 should be an additional profit.

If no additional profit is made to adjust the net income, the company will incur a loss of approximately $10,000,000.

The same case applies to project budgets of other values.

Conclusion

In conclusion, I can say that Apple Inc. has created a bench mark for innovation and their service in comparison to any other phone company or manufacture is incomparable. Apple have set industry standers and I believe that through research that it is far in-front of its current market as it has reached out ot all the possible markets from children down to old age pensioners.