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Apple Inc.
One of the greatest lessons that the 21st century corporate environment has taught
executives is that change is inevitable, and that the companies that do not keep up with change
will become irrelevant with continuing profitability in question. Globalization and technological
innovations are rapidly changing business operations requiring business executives to be
persistently on the move in order to exploit the various changes in the market. Apple Inc. is
without a doubt the number one company in the world that has best exploited change,
considering that it has been named by the Fortune Magazine as the most admired company in the
US for five years successively, since 2008. The following paper will examine Apple inc. and the
various drivers for change that are affecting the company. The paper will also explore how
change is affecting the company, and will focus on elements of change in for areas such as
markets, products & services and employees. Business models such as the Porters Five Forces, a
PEST Analysis and SWOT analysis will be used to analyze the company.
Company profile: Apple Inc.
Apple Inc. is a multinational company that is involved in designing and selling personal
computers, computer hardware and consumer software. The companys headquarters are at Apple
Campus, I infinite Loop in Cupertino, California. Apple is ranked as the leading publicly traded
company internationally, according to market capitalization; a recent report by the CNN stated
that the company was ahead of publicly traded giant ExxonMobil with over $150 billion. Apple
was founded on April 1976 by Steve Jobs, Steve Wozniak and Ronald Wayne and incorporated
the following year on January Third. The first products ever sold by Apple were hand-built
personal computer kits, which were marketed as assembled circuit boards lacking computer
features such as monitor, a keyboard or even a case. The company has grown to become the

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number one publicly traded organization in the world according to market capitalization
surpassing giants such as ExxonMobil. Currently, Apple has retail stores located all over the
globe with 357 retail stores along with an online store, according to an analysis of October 2011.
By September 2011, Apple had 60,400 permanent full-time employees as well as 2,900
temporary full-time employees. The companys annual revenue was recorded as $108 billion in
2011. Key people include Tim Cook, the CEO; Arthur Levinson, the Chairman; and Sir Jonathan
Ive, the SVP, Industrial design.
Porters Five Forces
The degree of competitor rivalry- The existing rivalry affecting Apple is from computer
companies such as Sony, Dell, HP, and ASUS together with other computer designers and
marketers. It is worth noting that this threat is relatively high for Apple, considering the
numerous computer companies currently in not just the market in the United States, where Apple
is dominating, but globally as well.
The threat of potential entrants- This is a relatively low threat to Apple, because of the large
start-up costs required to start a technology company the size of Apple. Brand loyalty of Apple
and other computer companies is also a discouraging factor to new companies.
The bargaining power of suppliers- The Company has a high bargaining power over its suppliers
since it can outsource its manufacturing. Apple is also able to produce some of the supplies that it
uses.
The bargaining power of buyers- Apple is currently enjoying a very high demand for its products
from its buyers, which significantly decreases their bargaining power.
Threat of substitutes- This threat is low for Apple; while consumers can easily use products from
other products if they wanted to, it is worth noting that Apple products are considered unique,
which makes the threat of substitutes relatively low.
PEST Analysis
Political - A large portion of sales of Apple are from outside the U.S. This means that events such
as wars and unfriendly international relations can influence the sales of Apple significantly.

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Considering that Apple manages to outsource its manufacturing to countries such as the Czech
Republic, China, Korea and Ireland, conflicts between the U.S. and these countries can have bad
outcomes for the company.
Economic - The 2008 economic recession had a great impact to the profitability of Apple, since it
affected consumer spending. The inflation rate is also relatively high in the United States and
other regions of the world, affecting the revenue of Apple.
Social - The music industry is a major social influence of Apple. The music industry has in the
recent past focused on the cyberspace as its preferred marketplace, enabling Apple to make
profits from its virtual media store. In addition, the present-day society has embraced
technological innovations especially computers and mobile phones, favoring Apple Inc.
Technological- The technological market for personal computers and mobile phones is currently
very large, as a result adding more competition to the market. Technology changes and
innovations are also very fast, which significantly decreases the products lifecycle.
SWOT analysis
SWOT Analysis refers to the internal factors (strengths and weaknesses) as well as the external
factors (opportunities and threats) affecting a company.
Strengths
Brand loyalty is a major benefit that Apple enjoys; the companys brand loyalty is good
not just in the U.S. but internationally as well. Another strength is that Apple is a very big
company whose stores are located in strategic locations in America and internationally. In
addition, the employees and management team of Apple are very innovative and have enabled
the company to surpass all other technology. Further, Apple has a successful history of acquiring
small corporations that are in turn incorporated into its company projects. The company has also
been named by the Fortune Magazine as the most admired company in the world for five years
consecutively since 2008 (Fortune, 2012).
Apple poses an outstanding research with development department that enables it to
design and launch new products several times in a year. Additionally, Apple markets its products

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to a large variety of consumers, making it secure. These include education consumers,
government consumers as well as consumer creative professionals. The last but not least strength
is that the products provided by the company are original, which makes many consumers to
return to the company to obtain them.
Weaknesses
A major weakness is that Apple has received a lot of criticism in the past for its IPod
factory, reports that were publicly announced in well-known papers such as The Washington Post
(Musgrove, 2006). The product life cycle of the companys products is also very small and the
company has to keep in launching new products. In addition, Apple has weak relationships with
its competitors, mainly Microsoft and Intel (Gordon, 2002).
Opportunities
There are many expansion opportunities in emerging markets globally. Another major
opportunity for Apple is that the world populace is embracing computers and technology, which
means that the demand opportunities for Apple are bound to increase in the future.
Threats
Competition from other companies in especially the laptop segment is a major threat for
Apple. The illegal downloading of free music online is another significant threat; this could
negatively affect the sales of Apples iTunes. Further, the future economic environment is
unpredictable, and increased inflation can negatively affect the spending of consumers.
Drivers for Change
Apple has grown to become the most admired company in America and, importantly, the
largest publicly traded in the world because of both internal and external drivers of change. One
of the leading internal driving forces is the companys technological capacity. The company
constantly embraces the latest technological innovations and upgrades the technology of its highend products, especially the iPhone, iPod Touch and the iPad. Many times in a year the company

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launches new versions of its products that always have improved technological features; this has
enabled the company to manage to always be ahead of its competitors (Stickler, 2011).
The other leading driver for change affecting Apple Inc. is its organizational culture. The
organizational culture at Apple is a cohesive culture that constitutes shared strategic values of
innovation, consumer delight and excellence. Central to the companys culture is a deliberate
commitment to achieving excellence. Apples processes focus on achieving excellence in its
designs that embrace simplicity as well as just the correct balance of form plus function. The
Company also has a common understanding as well as passionate commitment to everything that
it takes to deliver the best capabilities together with experiences to ensure that the needs of
consumers are met and are therefore delighted. It is also worth noting that unlike its competitors,
Apples culture is not a just good enough culture; rather it is a think different culture. The
company is constantly coming up with designs that always get accepted in the market (Lsted &
Elmaghraby, 2012).
The effect of change to the company
Change is affecting all of the corporate processes at Apple Inc., and the company has
been forced to invest in strategies that can help it embrace change without affecting its
profitability. One of the major changes affecting Apple is the markets. It is worth noting that
since the invention of the Internet, the brick and mortar stores have been losing popularity as the
online market continues to grow. Before the turn of the century Apple only cared about its
physical retail stores and invested numerous resources to expand its stores in a variety of
locations in America before going international. Currently, however, as the online market
continues to be the preferred market by consumers because of convenience, Apple has no choice
but to embrace the online market. Apple has launched an online store that is of various versions
so as to meet the needs of consumers from different parts of the world (Lsted & Elmaghraby,
2012).

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Consumers from different parts of the world are now able to order Apple products,
including the iPad and the iPhone 4 online. After the order, these products are delivered as
required. To the meet the needs of the Chinese customers, for example, the company ships iPads
within 24 hours and iPhones in two weeks. Additional changes affecting the company are the
changes that were raised by the government with regard to employee pensions. The companys
operations have been affected by the changes proposed by the government since it has been
required to re-examine its policies with regard to employee pensions and responsibilities. While
these changes are yet to be put into full effect, they will certainly for the foundation for future
pension law, requiring the company to adjust its policies with regard to employee compensations
so as to meet the needs of the government (Bessette, 2010).

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References
Bessette, Amy.(2010). Apple Launches Online Store in China.
http://www.apple.com/pr/library/2010/10/26Apple-Launches-Online-Store-inChina.html.
Fortune. "The World's Most Admired Companies 165 ." Fortune (2012): 139140.
Gordon, Richard L. (2002). Antitrust abuse in the new economy: the Microsoft case. New york:
Edward Elgar Publishing.
Lsted, Marcia Amidon and Adel Elmaghraby. (2012). Apple: The Company and Its Visionary
Founder, Steve Jobs. Washington: ABDO.
Musgrove, Mike. "Sweatshop Conditions at IPod Factory Reported." The Washington Post
(2006): http://www.washingtonpost.com/wpdyn/content/article/2006/06/15/AR2006061501898.html.
Stickler, Verena. (2011) Music and Media Business Enterprise: IBus - a New Business Venture
for Apple Inc. New York: GRIN Verlag.