Apple (Case #4) 1. What are the current challenges facing Apple?

What are key changes in the general and industry environments that affect Apples operations? One of the current challenges Apple faces is their lack of internet services. Apple needs to broaden their scope by broadening their product mix. Technology is a specific industry where it is an ever so changing market. As the major competitors fight for market share, it will become of utmost importance to create innovative products like internet services. From the failure of MobileMe to the failure of IOS Maps, it is quite evident Apple needs to address this huge weakness. Another current challenge Apple faces is their cloud services. Initially as Apples iCloud service launched, it came out with a whole host of issues and problems. They have since addressed and fixed these issues, however, Apple does not compare to its competitors Google Drive, Microsoft SkyDrive, and Dropbox. The third challenge that Apple faces is their excessive focus on style, design, and how their product looks. Apple needs to allocate more time to actual performance to compete better against their competitors. For example, the chips Apple uses for their latest and greatest generation of Ipods & Iphones do not compare favorably with Intels microchips. Some of the key changes in the general and industry environments that affect Apples operations are the technology factor. Within a fierce competition industry like technology, where success is largely dependent/measured on performance, size, and innovation, it is crucial for Apple to have competitive R&D. Apple invests billions of dollars in R&D, which is needed to leverage their position to the top of their industry. Adherence to creativity and innovation is of paramount importance for Apple future because their current main products are reaching the end of their product life cycles. 2. Explain some of the factors in the general environment which have a significant impact on the Apples profitability (e.g. demographic, socio-cultural, technological, and political/legal)? Some of the factors in the general environment that have a signif icant impact on Apples profitability are political factors, economical factors, social factors, technological factors, environmental factors, and lastly legal factors. Political factors include elements such as tax policies, changes in trade restrictions and tariffs, and the stability of governments. Economic factors include elements such as interest rates, inflation rates, GDP, unemployment rates, levels of disposable income, and the general growth/decline of the economy. Specific economical factors may influence consumers to save more/spend less causing them to avoid Apples products. Social factors include trends in demographics such as population, size, age, ethnicity, as well as cultural trends such as attitudes towards product. There could be trends down the road that suggest Apples products are outdated, slower, and less affordable. Technological factors include changes in R&D and increased automation. As rapid changes in technology occur, Apples technology might eventually be surpassed. Environmental factors include natural disasters and weather patterns. Lastly legal factors include laws involving issues such as employment, healthcare and safety, discrimination, and antitrust. As Apple fights Samsung over patents, this could drastically change the future for both companies. All and all, Apple will need to familiarize themselves with all of these new factors as they change throughout the

years and respond proactively to overcome all potential obstacles. Apple must continually find new ways to maintain profits and sustain their high-perceived value for customers and shareholders alike. The maturing technology market is become overly saturated, so Apple must continue to look to new and expanding markets to be successful in the future. 3. Taking a Resource-based view of Apple, list and analyze the companys four types of tangible resources, three types of intangible resources, and summarize the companys organizational capabilities (Dess, Lumpkin, Eisner, p. 93). Tangible Resources: Financial- Apple is one of the largest companies in the commercial electronics industry. This firms ability to raise equity is excellent which is one of the reasons Apple has outstanding financial performance. Physical- Apple is a worldwide company with a global distribution system that allows it to keep up with the increased emerging market demand. Apple creates, develops and innovates, excellent products with cutting edge technology. Technological- Apple has massive technical patents copyrights and trademarks that have allowed them to be an industry leader. Apples products are forward thinking, user friendly, and unique. Organizational- Apples organization resource is very effective and efficient in making strategic decisions. Intangible Resources: Human- Apple has very talented software and hardware designers, engineers, design teams, and a host of other key human resource positions. Apple has successfully positioned themselves to a comfortable market position through the learning and collaboration of all employees. Innovation- Apple has successfully innovated products and services to be some of the best products in the world. Apple creates products that are high in quality and exceptional in design. Reputation- Through losing CEO Steve Jobs, there was a huge concern on whether or not Apple was going to die or stay alive as a company. Apples reputation was cemented by Steve Jobs as a thriving and prosperous company. Tim Cook has allowed Apples brand image to stay alive and maintain a high quality reputation. Organizational Capabilities are what businesses distinctively do well, better than their competitors do. The main organizational capabilities of Apple are their ability to innovate and develop amazing products. Apple simply introduces products that truly wow the market and make people want to buy their product. 1. Innovative product design 2. Strong brand image 3. High perceived value 4. Massive technical patents 5. Strong financial performance