Apple: An External Analysis
Group 1

March 7, 2013

To whom it may concern, 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