Our second critical thinking exercise deals with external analysis for an organi

Question

Our second critical thinking exercise deals with external analysis for an organization. The topic for CTE 2 is “Apple, Inc.”. In the electronics/telecommunications industry, Apple has played a dominant role since more than a decade. However, a popular perception is that the issue of “stagnancy in innovation” in its products and services has plagued Apple over the last few years. And while it has been an undisputed market leader in the U.S., the same cannot be said for Apple at the global level of smartphone industry. This week, as the company’s CEO, Tim Cook takes the stage on Sept. 12 to announce its new products and features at the Apple’s annual convention in California, let’s examine the Strategic Group in which Apple is embedded and the PESTEL factors that affect its performance (see this week’s chapter and study notes to understand Strategic Groups and PESTEL). Find all the information that you can about the Strategic Group in which Apple exists and the PESTEL factors affecting Apple’s performance. Finally, answer the following questions: 1) Identify at least one factor from each of the six PESTEL factors affecting Apple, and explain how each factor affects or is likely to affect Apple. For example, if you think that “lifestyle changes” of people is one of the Sociocultural factors likely to affect Apple, please explain how in detail. 2) Create a list of all other players (companies) in Apple’s strategic group, and explain why you chose to consider them a part of this strategic group. For example, you may consider Samsung to be a part of Apple’s strategic group because they both compete directly, in the same markets, and target the same type of customer segments. Support your claims using examples and evidences. 3) Explain how each of the six factors identified by you in step 1) affects or is likely to affect each of the companies in your list from step 2), and whether that is beneficial or detrimental for Apple. For example, is “lifestyle changes” a relevant Sociocultural factor for Samsung? How? Is that good news or bad news for Apple? Taken together, these three answers will provide evidence of your level of critical thinking in the areas of external analysis. There is a minimum limit of 500-words to your response. However, you don’t need to post a reply to your classmates’ posts. Your responses are due by September 16 at 11:59 PM. Your responses will be graded based on the following criteria: Logic and reasoning in arguments Supplementary evidence and supporting examples Detailed and clear explanation Insightfulness Creativity/novelty in the information provided Please make sure to support your answers with examples, evidence, and detailed, well-articulated explanation. Answers that do the "bare minimum" (e.g., one or two sentences total) or "state the obvious" (e.g. "a business must be aware of global changes because they are important for success") will not earn any points.

Explanation / Answer

Five forces analysis on smartphone industry that could threaten Apple is as follows.

Political factors

Politically mobile phone industry has been very badly affected. Changes in policies across different countries and international levels huawei world affecting the trade between different countries and reduced the impact of mobile phone industry as compared to Apple. Apple has a competitive advantage as their policies are very strong and availability of other factors are also relatively high.

Environmental factors

Many of the mobile phone manufacturers are facing different kind of issues as compared to Apple because of the strict environmental rules. For reducing the overall price of the devices, other manufacturers are using different kind of chip manufacturing processes which are directly creating hazard for environment. As apple is caused dominating and provide premium product their research and development strategy is relatively providing premium content rather than going for the environment harming contents.

Social factors

Social factors are also one of the most important parts in increased sales of the Apple. Apple is considered to be a status symbol which is socially accepted as a premium device. Other devices from the similar segment are not as effective as the Apple is branded to the people.

Technological factors

As many other organisations are also developing their structure of operation in terms of providing better services for mobile phone industry, competition level is also increasing which is affecting business of apple in the Global scale. Technological advancement and availability of other substitute Sa also affecting business of Apple in international markets.

Legal factors

As increasing number of patent infringement activities as well as availability of different rules and regulations in operation of mobile phones and manufacturing have also been affecting apple in a very large why. This type of approach reduced its limitation to Limited amount of market as well as also reduced its freedom to innovate and to implement freely on to their phones.

Some main companies which could be included included in strategic group of Apple are as follows.

Samsung
Google
Huawei

What are the factors involved in analysis directly pose a similar thread on these companies as well as availability of opportunities for these companies are also affected by sem political as well as technological or environmental factors. Due to extremely large operating environment these companies are also prone to the very similar power where availability of authority and dominance can vary widely affect the overall outcome of operational capabilities for these companies. Google has been successfully launching a new range of mobile phones as well as implementing new product line criteria for maintenance of a strong Marketplace as well as service provision. This level of specific implementation of different Strategies for mitigating external factors and their effect using the analysis will be the most appropriate way of tackling the specific conditions.

As people are suffering Android over iOS due to their wide availability and for being relatively cheaper than Apple devices, this threat of substitution is directly creating an impact on the overall sales generated by apple in their operating environment and availability of resource allocation is also accordingly done. As in international market the overall serviceability is highly volatile availability of the specific options directly decline the standard of operation and creates negative impact on the total market opportunities generated by Apple for the specific smartphone industry.

All in all we can say that highly volatile market as well as changing Trends have affected the overall business capabilities of apple in the respective market segment the availability of other brands provided better pricing, samsung and major manufacturing companies as a strong threat to the overall operational capabilities. As International markets are expanding very quickly and Chinese manufacturers are also entering the specific market segment, availability of market opportunities is decreasing for Apple as these organisations are providing extensive availability of marketing opportunities to these substitute brands and affecting the business operations of apple in a negative way.

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