Business Level Strategy Corporate Ownership

Question: Discuss about the Business Level Strategy for Corporate Ownership. Answer: Introduction This assignment is about analyzing the importance of strategic analysis on a company or business. In order to develop this assignment, the company Apple has been selected. In this assignment, background information for the business entity Apple has been provided. There are various significant information added in this section. They are such as history of the company, operating revenue, main products and services of the organization and sustainability issues. The external analysis of the company has been provided in the next section. It includes Porters five force analysis and PESTLE analysis. They help to find out the major business opportunities and threats of the company. Finally a conclusion has been provided depending on the Porters five force analysis. In addition, the competitive forces and their effect on the information technology industry and the organization Apple have also been discussed in this assignment. Organizational Background Apple is considered as an American multinational technology company founded by Steve Jobs and Steve Wozniak on April 1, 1976 in order to develop and sell personal computers (Zhang et al., 2013). It designs, develops and sells consumer electronics, computer software and various other online services. It includes various iconic products such as Macbook, iPhone, iPad, Apple Watch and Apple TV. The company works on different industries such as computer hardware, consumer electronics, computer software, Fabless Silicon Design, Corporate Venture Capital. The company has more than 470 stores in more than 17 countries. The company has more than 115,000 employees. The total revenue of the company is US$60.024 billion. Gibbons (2015) stated that total revenue generated by the company is 1.25% of the United States total GDP. It has been found that the name Apple was inspired by Steve Jobs visit to an farm od apple (Bergvall-Kreborn Howcroft, 2013). According to Jobs the name Apple was fun, spirited and intimidating. The company is known for its innovation and innovative products. Every year customers wait for the new products developed by the company. For this reason, brand loyalty for the company is considered very high. For this reason, the profit margin for the company is significantly high. In the year of 2011, the profit margin of the company was 40% compare to 10% to 20% of other electronic companies. The company is also concerned about environmental practices and initiatives. Due to a Greenpeace protest, the company Apple has stopped using coal and shifted to 100% renewable clean energy. As of 2016, U.S. operation of the company Apple runs 100% on renewable energy sources. Porters five force analysis Competitive rivalry The company Apple has to face high level of competition in the technological sector. Mullin (2016) stated that Apple has direct competition with companies like Samsung, Google, HP. All these organizations expend a significant amount of capital for research and development and marketing. In addition, it has been found that switching cost in this industry is lower. It has made industry rivalry for the company more intense. Braining power of customers Due to lower switching cost, the bargaining power of the customers is considered as a key force of the company Apple. It can be mentioned that individual bargaining power for the company Apple is considered negligible as loss of single or two customers represents a negligible quantity of revenue for the company. However, collective bargaining power for the company is considered high. For this reason, Apple always focuses on developing customer friendly products like Apple watch and Apple Pay (Purkayastha Samad, 2015). It helps to improve customer loyalty for the organization. Braining power of suppliers McDowell (2014) stated that bargaining power of the supplier for the company Apple is considered weak. Due the availability of high amount of probable suppliers and ample mass amount of supply, the bargaining power of the company has become weakened. Apple is considered as the major customer for most of the suppliers; hence, therefore, they are very reluctant of losing Apple. Threat of product substitution There are various substitutes available for the products of Apple. For example, in case of Macbook, middle level customers prefer to have Windows P.C. as it requires low price. Similarly in case of iPhone, middle class customers prefer to use Android phones. Companies like Samsung, HTC can develop equivalent android smart phones that have comparatively lower price. Threats of new entrants Threat of new entrants in the market place information technology is considered very low. There are two major factors that have affected the threat of new entrants. They are such as high cost of developing company in this industry and high cost of developing brand name in this industry. Any new company has to made massive amount of investment in RD and manufacturing department in order to generate profitable revenue (McDowell, 2014). PESTLE analysis Political factors Enhanced free trade policies (opportunity) Stable political condition in developed countries like UK and US (opportunity) Economic factors Swift growth of developing countries like India and China (opportunity) Stable economic condition in developing countries like UK and US (opportunity) Social factors In the last decade, mobile usage among people has been increased (Jacques, 2013) (opportunity) Tso et al (2012) stated that, in developing countries like India and China people are becoming for inclined towards using Apples products like iPhone and iPod (Jacques, 2013) (opportunity) Technological factors The trend of using cloud computing has been increased in the last few years (opportunity) Technological integration in developing countries can be considered as one of the major opportunities for Apple for business expansion (opportunity) The growing app market helps the company Apple to develop exclusive apps for iPhone and Macbook (opportunity) Legal factors Government of different countries is now realizing that their privacy issues are now connected with the digital technology usage. Hence, more privacy regulations are implemented on the business of Apple. This factor can be considered as threat as it develops new challenges for the organization in case of products that involve transmission of private information. (threat) On the other hand, governments of different countries are becoming strict about various telecommunication regulations. It can be considered as a major threat for the company Apple, as it can limit the usability of Apple products. Environmental factors Business sustainability trend can be considered as the major opportunity for the company Apple. The company has tried to maintain business sustainability with the help of recycling and various programs (opportunity). Due to the increasing energy efficiency trend, the company Apple has become more concern about using renewable energy sources. Due to a Greenpeace protest, the company Apple has stopped using coal and shifted to 100% renewable clean energy. As of 2016, U.S. operation of the company Apple runs 100% on renewable energy sources (Cant et al., 2014). Conclusion On the basis of Porters five force analysis, it can be mentioned that company Apple is considered as one of the leading information technology company globally. The company is known for its innovation. The company has made huge amount of investment in Research Development. It helps the company to meet the demands of customers. It has made customer loyalty high for the company. However, the suppliers of the company have limited capability. As Apple is considered as one of the major customer for more of the suppliers, they feel reluctant to lose Apple. However, the company Apple has to face intense competition from companies like Samsung and HP. Due to the lower switching cost of products, this competition has become more intense. Reference list Bergvall-Kreborn, B., Howcroft, D. (2013). The Apple business model: Crowdsourcing mobile applications. InAccounting Forum(Vol. 37, No. 4, pp. 280-289). Elsevier. Cant, M. C., Machado, R., Seaborne, H. C. (2014). Brand advocates-An apple phenomenon? An exploratory study on brand advocacy amongst apple consumers.Corporate Ownership and Control,11(2 G), 535-541. Gibbons, G. (2015).The seasons of Arnold's apple tree. Houghton Mifflin Harcourt. Jacques, M. W. L. (2013). The effect of brand equity on price premium of apple iPhone.Jurnal Riset Ekonomi, Manajemen, Bisnis Dan Akuntansi,1(4). 45-49. McDowell, G. L. (2014).Cracking the Tech Career: Insider Advice on Landing a Job at Google, Microsoft, Apple, Or Any Top Tech Company. John Wiley Sons. Mullin, J. (2016). Supreme Court Takes up Apple v. Samsung, First Design Patent Case in a Century.Sup. Ct. Preview, 67. Purkayastha, D., Samad, S. A. (2015). Apple and Conflict Minerals: Ethical Sourcing for Sustainability.The IUP Journal of Operations Management,14(2), 59-77. Tso, Y. C., Wang, S. J., Huang, C. T., Wang, W. J. (2012). iPhone social networking for evidence investigations using iTunes forensics. InProceedings of the 6th International Conference on Ubiquitous Information Management and Communication(p. 62). ACM. Xuqing, Y., Wenxiang, S. (2014). Business Performance Evaluation of Huaniu Apple Enterprise in Tianshui Maiji Distict Based DEA Method.Forestry,2, 10-15. Zhang, Y., Tao, F., Laili, Y., Hou, B., Lv, L., Zhang, L. (2013). Green partner selection in virtual enterprise based on Pareto genetic algorithms.The international journal of advanced manufacturing technology,67(9-12), 2109-2125.