Apple company description
Apple Inc. is engaged in the design, manufacture, and sale of personal computers, Smartphones, wearable, and accessories (Arocha, 2017). Also, the company offers related services. Apple is in operation in Greater China, America, Europe, Japan, and Rest of Asia Pacific (Arocha, 2017). Apple products and services include; Mac, iPhone, Apple TV, iPad, Apple Watch, Air Pods, and Beats products. Services are iCloud, Apple Care, licensing services, digital content stores, and streaming. Apple was founded in 1976 by Steve Jobs and his colleagues Steve Wozniak and Ronald Wayne.
In the last four decades since its inception, Apple has witnessed both highs and lows in finances from being near bankruptcy to one of the most valuable public company in the world (Arocha, 2017). Apple Inc was incorporated in 1977 and, after that, introduced its first successful product Apple II computer. In 1978 the company witnessed the unsuccessful production of Apple III. In 1980 the company became publicly traded and sold shares of approximately 4.4 million shares for every 22 dollars. In 2001 Apple introduced an iPod that was significant for the company’s success (Arocha, 2017). In 2003 Apple introduced iTunes for digital music downloads. In 2008 Apple store was launched. In 2014, Tim Cook introduced Apple Watch as the company’s first wearable device. Referencing from the mentioned products and services developed by Apple, it is evident Apple has witnessed both rise and fall in the company operations (Arocha, 2017).
Risks and uncertainty in Apple operations
Apple is identified as a global company, thus operates in global markets (Jacobsen, 2017). The company products and services are highly competitive, and they are subjected to technological changes. It is not a guarantee the company will continue to provide products and services that meet current market demands.
For Apple to remain productive, it is paramount to stimulate customer demand. Therefore, Apple has invested heavily in its R&D department to ensure it successfully manages frequent product introductions and any transitions.
Apple’s success is heavily dependent on the performance of distributors, carriers, and resellers (Jacobsen, 2017). On average, Apple has about 500 own retailer stores, and the rest are retailer outlets. Thus, in the event, the financial condition of the resellers weakened. They may opt to stop distributing Apple products, and this will have a significant impact on Apple’s economic performance. Don't use plagiarised sources.Get your custom essay just from $11/page
Apple heavily depends on operation results from the company able to get the needed components in sufficient quantities. Thus, in the event of any supply constraints or delays, then the company production is likely to be significantly affected, translating to lower profit sales.
Government operations affecting Apple operations
Apple is a technology company, and thus, there is a need to focus on regulations imposed by different countries about technologies (Jacobsen, 2017). Every new product that is added by the company needs to adhere to new rules. For example, Apple Watch is a new product, and there are not yet clear guidelines on the regulations from cell phones and computer tech. Different countries have different privacy regulations that need to be adhered to by Apple (Jacobsen, 2017). Moreover, given the company depends on “Big data” for its effective operation in its platform, it is required to seek different approvals from respective governments that guarantee it has met the set guidelines.
Inputs that are used in Apple company production function and any challenges to securing these inputs
Apple Company depends on its raw supplies, logistical services, and product manufacturing offered by external companies (Singh, 2019). Much of Apple’s operation is not in the United States, and this makes the company depend on the international market for its sales and growth. As a result of preference to outsource most of the products from the company, Apple gets the opportunity to lower its costs. However, there is a challenge identified with their choice to outsource which is giving up much of their control to the external companies. The foreign companies are those that are currently making the supplies and distribution of the products and services.
Moreover, with heavy reliance on outsources products and services, Apple is identified to face issues concerning quality control (Singh, 2019). It isn’t effortless for Apple to ensure all the company branded products have met the needed production. Over time, by Apple, depending on the international market to makes sales and growth, the company has to deal with different price fluctuations that are experienced in different countries. Additionally, different countries have respective tax and regulations that govern the production and sale of different products. Thus profit gained by Apple is not standardizing somewhat the company has to deal with fluctuation of earnings over time (Singh, 2019).
Introduced new products in existing markets or created new markets over time and impacts to finances
Apple Company is regarded as one of the companies that have continued to add more innovative products and has continued to expand its operations into new markets to increase their growth (Singh, 2019). There are some markets such as Europe where Apple products are doing very well in comparison to its host countries where the growth is not as high as in new markets. Moreover, in the current Smartphones that have been produced, such as iPhone 6, there has been a notable improvement on the phone to create iPhone 6S. The company prides to deliver upgrades phones on its current gadgets (Singh, 2019). The ability to introduced improved versions of the phones with detailed features has enabled the company to make adequate profits over time as customers prefer to upgrade to gain the latest products in the market.
Apple has introduced wearable products such as the Apple Watch, which has been marketed to improve an individual lifestyle (Singh, 2019). Thus, the company is now considered to not only be keen to help consumers with the latest technology gadgets, but the wearable is identified to help improve the lifestyle of the consumers. As a result, this has translated to an increase in the growth and profits of the company, which is essential.
If the price of its products increased or declined over time and analyze the reasons for price fluctuations
Over the years, Apple products and services are identified to be exclusive and primarily are designed for high-end users due to the target of the market being in the high end (Yun, Lee, and Aoshima, 2019). Tim Cook, since succeeding from Steve Jobs, has, in several occasioned, debated whether to lower the Apple prices and ensure the products are available to all persons. However, conclusions were made the company great design offer the consumers exceptional experience while using the company products and services. Therefore, there are no suggestions made Apple seeks to lower its prices, given the sales of the company are still progressing despite the high costs (Yun, Lee, and Aoshima, 2019). Apple products are considered in many markets to be prestigious to own, and with the high value attached to the product, it has continued to increase in purchases made on the products.
Apple maintains an inelastic demand for all its products (Yun, Lee, and Aoshima, 2019). This allows the consumers to prefer making purchases of the Apple products irrespective of considerations made on their competitors. Apple’s primary focus is on premium products and high-end consumers, and this allows them to yield significant profits from the different units that are sold daily at premium prices. Anticipations of Apple products are projected to continue over the next years with its continuing to focus on the high-end consumers who can purchase the products.
Identify the economy or industry influences on its costs, operations, and profitability
Apple has, in the past, been affected by a significant global recession in the world. For example, in 2012, Apple was selling approximately 50 percent compared to 9 percent presently (Gardere, Sharir, and Maman, 2018). Across international markets, Apple has to deal with fiscal problems that require Apple to develop ways to deal with tough economic situations. Apple has, in the past, using different strategies such as low cost of production, premium pricing, and product segregated policy for it to efficiently target high-income earners who are a small market (Gardere, Sharir, and Maman, 2018). Apple uses an integrative approach of full package of both hardware and software.
The competitive environment in which the firm operates
Rivalry among Apple competitors is very high (Arocha, 2017). Given Apple has a well-diversified portfolio based products enables it to sell both hardware products and offer software services with ease. For example, Apple has registered a decrease in phones being sold over time, as many people continually prefer to purchase android phones as they are cheaper. However, Apple products are highly differentiated from competitors’ products, which is positive for the company.
The potential entry of new competitors into the Apple market is low (Arocha, 2017). Apple has positioned itself to majorly cater to the high-end consumers and for any potential new entrants into this market and make a significant portion is meager. Moreover, there are low threats as a result of the patents, copyrights, and high switching costs among the competitors.
The competitive pressure from substitute products is considered moderate. For example, IPad can be substituted by Samsung Tab; the iPhone can be replaced by Samsung galaxy. Apple OS, iCloud, Apple app store does not have any substitute and identified to be the company’s strong point.
The bargaining power of suppliers is low to moderate (Gardere, Sharir, and Maman, 2018). The power is considered moderate as they have been given unique capabilities by the company to manufacture its products. Additionally, Apple consults several suppliers for its products to reduce the risks, and with its capacity for high purchase in bulk gives the company high buying power.
The bargaining power of the consumers is low as the company brand is trusted by many consumers to produce high quality products and is identified as one of the best innovators (Gardere, Sharir and Maman, 2018).
Apple Company makes mistakes over time
There are different identified mistakes that Apple Company has done over time (Le Coze, 2019). First, Apple CEO allowed Eric Schmidt to be part of the Apple board for a period, and after leaving having known all the company secrets opted to support Android phones. The greatest mistake was for Steve Jobs to consider Google as a potential partner. By failure, to buy them out, they became the company’s biggest competitors as they support Android platforms (Le Coze, 2019). Second, CEO Tim Cook considered Apple to be social. Still, the company was slow to buy out Twitter, which in the following years becomes one of the biggest social media sites people depended on breaking news. Apple company has been reluctant to spend cash on any acquisitions, and this has made the company not to emerge are a giant company in the current market (Le Coze, 2019). Third, Apple opted not to purchase Motorola, which would have kept them out of the IP litigation where they spent a lot of money and time trying to get needed patents. If Apple had been part of the consortium, then it would have obtained the Nortel patents and kept them away from Google. Fourth, for many years Apple users have complained about the difficulty of sharing videos and photos on non-compatible gadgets. It is a nightmare to share pictures of pictures with Android users. Five, on several occasions, Apple has been blamed for allowing Samsung its rival competitor to introduce different smartphone features and then make a copy version. Thus, there are minimal features that were first introduced by Apple and subsequently copied by other platforms (Le Coze, 2019).