PORTER’S FIVE FORCE MODEL FOR APPLE:

THREAT OF NEW ENTRANTS –LOW

For any new entrant to enter into the consumer electronics or smartphone industry will
require a huge amount of capital to spend on research and development. There is also a
challenge of gaining a brand recognition.

INDUSTRIAL RIVALRY – HIGH

The companies like google, Samsung and Hewlett- Packard are in direct competition with
apple. These companies also spend almost an equal amount for research and development
like apple. So, the industry rivalry is high.
THREAT OF SUBSTITUTES – LOW

This market force is relatively low for Apple due to the fact that most potential substitute
products have limited capabilities compared to Apple's products

BARGAINING POWER OF BUYERS –LOW

Bargaining power of buyers in consumer electronics industry is generally huge. However, the
bargaining power of Apple customers in particular is less compared to the industry average
because apple has

High level of customer loyalty

Apple ecosystem

Absence of dependence on a few customers. 

BARGAINING POWER OF SUPPLIERS – LOW

The bargaining position of suppliers is weakened by the high number of potential suppliers
for Apple and the ample amount of supply. The switching cost for Apple to exchange one
supplier for another is relatively low and not a significant obstacle. Plus, Apple is a major
customer for most of its parts suppliers

MINTZBERG’S 5P MODEL:

PLAN:
Apple’s plan is to keep on innovating easy to use products and consumer electronics. They
are also into expansion of the apple ecosystem. It is also planning to increase the production
of digital products and maintain profitability at the same time.

PLOY:

Apple use INNOVATION as its ploy. So far apple is staying ahead of its competitors only
because of continuous innovation.

PATTERN:

The pattern used by apple is innovation. Many of apple’s innovation has been a great success
and a failure. Still, after failures, apple is following the same pattern,

POSITION:

Apple has been projected and positioned as a high- end product. Its high-quality design in
both hardware and software are difficult to the competitors to compete against apple.

PERSPECTIVE:

The customers perceive that apple is known for its quality and thinking different. Apple is
being perceived as the best product in the marketplace.

Resource Utilization:

Introduction:

Apple has a wide range of resources both tangible and intangible. In order for any
organization to maintain a high level of performance in the market, there is need for adequate
resources to facilitate the process of meeting various goals.

One of the major company’s resources is based on its ability to maintain a high level of
innovation. Apple lnc has managed to maintain a high level of innovation in its products.
This has been facilitated by its ability to conduct an intensive research.

As a result, the company has managed to provide products which are up to date with
technological development. This has been realized through teamwork which has encouraged
the exchange of ideas among the employees. This has significantly contributed to the
company’s ability to win and retain its customers.
Apple has well developed networks and relationships in its operations. For instance, the
company has a very good relationship with OEM partners. This has provided the company
with an opportunity to outsource some of its manufacturing processes. As a result, the
company has managed to produce high quality products. The company has also managed to
reduce its operational costs.

Tangible and Intangible Resources:

Tangible Resources:
Outsourced manufacturing facilities in China
Apple retail store locations

Intangible Resources:
Research and development teams
Brand recognition and reputation among suppliers and customers
Customer loyalty
Partnerships with third party developers (i.e. Microsoft Office and Adobe)
Visionary leaders

Competitive Advantage through Resources:

Tangible Resources:
Outsourced manufacturing: - Allows Apple to lower manufacturing costs
Apple retail stores: - Effectively market Apple’s increasingly diverse product line better
than third party retailers could market the products.

Intangible Resources:

Research and development teams: - Innovative and unique products designed to be more
attractive to and user-friendly for consumers, ability to enter into new markets as a result of
careful market analysis.
Brand recognition and reputation: - Increases brand awareness and decreases the threat of
new entrants as Apple is a dominant company within its industries.
Customer loyalty: - Lowers likelihood that consumers will switch to the products of rivals.
Partnerships with third party developers: - Allows for Apple to provide the same software
programs as Windows.
Visionary leaders: - Commitment to innovative ideas keeps Apple focused on CEO Tim
Cook’s “single-minded emphasis on pursuing only projects where Apple could be the best at
making a significant, lasting difference”.

Leading Core Competencies of Apple:

Research and innovation: -

Apple is well known worldwide for its focus on research and innovation. It has brought a
large range of some of the most innovative technology products to the market including
iPhone and Mac OS. Every year the company spends a huge sum on research and
development. Apple was always known for its innovative ideas and apart from product
innovation, it is also known for its marketing innovation since the time of Steve Jobs. In
fiscal 2019, the research and development expenses of Apple crossed $16 billion. The
technology industry has grown highly competitive and every technology brand invests a large
sum each year in research and development to retain its market position and market share.
The latest models of iPhone and Macbook have some of the most innovative technologies
onboard. Moreover, Apple is constantly innovating and improving its existing product line.
So, research and innovation is a source of sustainable competitive advantage for the brand.

Marketing: -

In an era of intense competition, several things depend directly upon marketing including
popularity, customer loyalty, sales, and brand recognition. However, when it comes to
marketing, Apple is considered second to none. Steve Jobs was known as one of the most
innovative marketers in the entire technology industry. While a lot of Apple’s popularity is
based upon its product quality, the company has sustained its leadership position in the
industry well through innovative marketing. Even with a lot of focus on technological
innovation, a brand can fail if it does not focus on innovative marketing. However, Apple has
always led the way in terms of innovative marketing. It utilizes several marketing channels
for marketing and promotion. However, the main reason its marketing strategy has been so
successful is because of its focus on customer experience. Apple creates unique and
innovative products and its marketing strategy is equally unique and innovative. Not just the
digital channels of promotion and media, but Apple does a lot of marketing through its own
physical stores too. So, marketing is a source of sustainable competitive advantage for the
brand which has helped it position itself as a leader in the tech industry and build a distinct
and unique identity.

Product line: -

Another one of the leading sources of competitive advantage for Apple is its large and
innovative product line. While its core product is the iPhone accounting for the largest part of
the company’s annual net revenue, Apple has also brought more computing, entertainment
and mobile technology products including Macbook, iPad, Apple Watch, Apple TV as well
as a large range of complementary services. In recent years, its income from services has
climbed a lot. In 2019, the net revenue of Apple from sales of the iPhone was $142.4 billion
while that form the sales of Mac was around $25.7 billion. Revenue from services has
climbed to $46.3 billion in 2019. Sales of the iPad generated $21.3 billion in revenue for
Apple in 2019, whereas the sales of Wearables, Home and Accessories brought $24.5 billion
in revenue for fiscal 2019. In this way, a large and varied product line has helped the
company grow its revenue faster. Apple products are mainly premium products and the heavy
profit margins that the company earns on each product cannot be matched by other brands
offering similar products or services. The uniqueness and quality of these products is a source
of sustainable competitive advantage for the brand and also the reason behind its popularity
as well as the company’s profitability.

Premium product quality: -

A company cannot earn a competitive advantage from its products unless there is something
unique and outstanding about them. However, when it comes to Apple, all its products are of
premium quality. Apple mainly targets the upper class and upper-middle-class customers
through its products. The premium products of Apple also come with premium price tags.
However, the premium quality of these products is one of Apple’s core sources of
competitive advantage. It is mainly because of their premium quality and outstanding
performance that these products including the iPhone and Macbook enjoy heavy popularity
and high demand in most corners of the world. In the case of Apple, Premium product quality
is not just a driver of demand but also of profitability for the company. Moreover, the
premium quality of these products makes them unique and inimitable. A large part of the
credit also goes to the technology inside these products. Apple’s iOS and Mac OS are the
primary sources of differentiation and drivers of demand for two of its leading products.

Talented HR: -

As the level of competition in the technology industry has grown quite intense, companies are
now competing in the area of HR as well. The demand for talent and highly skilled tech
professionals has grown a lot. Large technology brands like Google, Apple, Microsoft,
Amazon, and Facebook have very large HR budgets. They try to attract the best talent and
pay them fat salaries as well as other financial and nonfinancial incentives to retain them.
Tim Cook has done a lot to revive Apple’s organizational culture and to make the
environment more worker-friendly. Talented human resources are also a key source of
competitive advantage for the brand since the pace of innovation at Apple depends on the
ability of its people.

Brand equity: -

Apple’s focus on quality and technological innovation has earned it a leadership position in
the industry. Premium quality products and improved customer experience have also led to
higher recognition and stronger competitive advantage compared to the rivals. Overall, Apple
enjoys very strong brand equity which has also led to higher customer loyalty. Brand equity
is a very important source of competitive advantage for any large brand considering that
consumers’ trust matters more than anything else in the hypercompetitive environment. How
much your customers’ trust you affects the level of sales and revenue. Apple has been able to
win the trust of its customers through a sustained focus on quality and innovation. It is why
despite the premium prices; sales of Apple products are so high. Moreover, Apple places a
special focus on its users’ privacy, which is also a key reason behind higher brand equity and
overall trust.

Global recognition: -

Apple is a globally well-recognized brand. The company is famous for its innovative
products, quality, and marketing. Strong brand recognition translates into easy brand recall
and higher sales. The company has also achieved higher customer engagement and trust
through a consistent focus on quality and customer experience. Its strong recognition is also
one of the primary factors driving faster growth of the brand.

Supply chain: -
Managing supply chains has become critical to business success in the twenty-first century.
As competition in the tech industry has grown ensuring the availability of quality raw
materials has grown important to produce great quality products and find faster business
growth. Innovative supply chain management ensures low operational expenses as well as
timely production. Apple has a large and global supply chain. It sources from several corners
of the world. However, the largest part of its supply chain is based in Asia and mainly China
which is because of the availability of quality raw material and labor.

Bargaining strength: -

Apple’s strong position in the technology industry and its strong financial position also offer
it higher bargaining power against its suppliers. This helps Apple purchase good quality raw
material at lower prices and maintain higher profit margins.

Global Sales & Distribution: -

Apple has a global sales and distribution network which includes physical and online
distribution network. Apple utilizes multiple channels for sales and distribution including
authorized resellers, e-commerce, and physical stores to sell its products. In several of its
leading markets, Apple has established its branded retail stores which work as both sales and
marketing channels for the company.

Strategic Fit with Environment:

Apple is not only the world’s most recognizable brand but also the most valuable, with an
estimated value in 2020 of $205.5 billion. The main contributors to that value are its iPhone
range and its Macs, with laptop sales recently regaining market leadership. Apple is now
going green with a goal of becoming 100% carbon neutral by 2030.

We look at six sustainability initiatives that are helping them reach that target.

Lowering the Use of Carbon Materials

Since its introduction in 2007, the iPhone has sold over 1.5 billion units. Their phones also
play a major part in the world of e-commerce marketing. But with demand for products
growing, how do you find balance? One approach is to increase the amount of both low
carbon and recycled materials in products, be innovative in recycling old products, and make
design more energy efficient. One innovation is “Dave”, a recycling robot designed to
recover rarer materials such as earth magnets and tungsten from old phones, as well as a
percentage of the steel used. Apple also has a specialist Material Recovery Lab located in
Texas and has partnered with Carnegie Mellon University to research new recycling
solutions. Sales channel strategies that incorporate environmental policies will have more
appeal to the modern, climate-conscious consumer.

Renewable energy

Making the move to renewable energy is the cornerstone of Apple’s green policies. Apple’s
new headquarters opened in California in 2017 and is 100% powered by solar panels. The
company also planted 9,000 new trees on the site. In 43 countries, all of its stores, offices,
and data centers are entirely powered by renewable energy. This is contributing to a positive
effect on pollution both globally and at a local level. Apple extends this to its supply chain.
More than 70 suppliers have committed to using 100% renewable energy. This will be equal
to taking over three million cars off the roads. Apple has always been at the forefront of
industry innovations, such as being able to send fax from computer. Now they are applying
innovation in green policies into their business model. With many consumers increasingly
caring about eco-centric issues, this can play a big part in the psychology of closing sales.

Innovations in materials

Most people see innovations in terms of features in their iPhones, Macs, and other solutions,
such as a cloud phone system. But Apple is currently working closely with two of its
aluminum suppliers to develop the first carbon-free aluminum smelting process. They have
developed extremely low carbon aluminum that is being used for parts and components in the
16-inch MacBook Pro. Another problem is fluorinated gases, which contributes to global
warming. Through working with partners, Apple reduced use of these gases by more than
242,000 metric tons in 2019.Green credentials can extend to software too. If the company
producing software tools – for example, time management tools – have solid environmental
policies, then this can help with overall sales.
China: China is a major part of Apple’s manufacturing chain. An estimated 30% of all
iPhone 6 orders are built there. But due to its coal-burning power plants, China faces major
pollution issues. To help with this, Apple launched the China Clean Energy Fund and has
invested just under $300 million toward developing clean energy there. The fund aims to be
able to produce around one gigawatt of clean renewable energy. It is hoped that all iPhones
manufactured or assembled in China will be in plants powered by renewable energy by the
end of 2020.

Reducing the use of conflict materials

Although ‘blood diamonds’ is a phrase most people recognize, fewer people are aware of the
term “conflict minerals.” These usually come from areas of the world where there is some
form of conflict and are obtained through the exploitative use of workers, with human
trafficking and slavery often involved and the proceeds helping to prolong and fund the
conflict. The main three conflict minerals are tin, tungsten, and tantalum (the 3 Ts), but gold
can also be included. A common source of these minerals is the Democratic Republic of
Congo (DRC), an area with ongoing violence and human rights violations. Apple has now
ceased relationships with any mineral providers that fail Apple’s intensive auditing process.
By working with suppliers and smelters that are certified as ethical and conflict-free, Apple
hopes to reduce the demand from areas such as the DRC.

External Work

The company realizes that this is a global issue and so have extended their efforts outside the
Apple family. Some of their initiatives include:

 A carbon solution fund that seeks to invest in restoring and protecting forests and
other ecosystems around the world.
 Partnership with Conservation International that has seen investment in a multitude of
projects, including restoring damaged savannahs and mangrove forests.
 Partnerships with Conservation International, WWF, and The Conservation Fund,
which have helped to protect, restore, and manage more than one million acres of
forests and other natural climate barriers around the world.

Environmental policies implemented by Apple could give ideas for material to include for
virtual team building with new channel partners.
Apple was long criticized for its negative environmental impact. In recent years, however, it
has made a huge amount of progress. If it applies the same effort to these subjects as it does
to providing conference calling provider solutions, then it will no doubt continue to hit its
targets. As companies look to solutions such as call-center tracking as part of their digital tool
kits, solutions providers who have green credentials will have an advantage. Its 2019
Environmental Responsibility Report showed that the company had reduced its carbon
footprint by a massive 35% over the previous three years. Apple even received a special
award in 2019. With ambitious goals in place, and programs to tackle environmental issues
both within the company and on the global stage, Apple is setting an example for other
corporations to follow.
Mckinsey 7s Framework of Apple

The McKinsey 7s model is a strategic tool and framework that helps managers and businesses
assess their performance. The McKinsey 7s model identifies 7 key elements for an
organization that need to be focused and aligned for successful change management
processes as well as for regular performance enhancements. The 7 elements identified in the
McKinsey 7s model can be categorized as being hard or soft in nature. They are identified as:

Hard Elements: Strategy, Structure, Systems

Soft Elements: Shared Values, Skills, Style, Staff

Apple makes use of the McKinsey 7s model to regularly enhance its performance and
implement successful change management processes. Apple A focuses on the 7 elements
identified in the model to ensure that its performance levels are consistently maintained and
improved for the offerings.

Hard Elements in Apple McKinsey 7S Model

Strategy:

Apple pursues differentiation business strategy with a particular focus on the design and
advanced features and capabilities of products. The company aims to benefit from the first
mover advantage to a maximum extent as it was the case with introduction of iPod, the first
device of its kind that stored thousands of songs with simple shuffle capabilities through
songs and the development of Macintosh, the first computer to use a graphical user interface.
Accordingly, Apple products and services are generally more expensive compared to the
competition. Moreover, Apple business strategy involves the creation of a sort of closed
ecosystem, where it’s various devices and software sync easily and work well with each
other. Advantages the company gains from this strategy include high switching costs for
customers and this provides the opportunities to leverage relationships with existing
customers to offer other products and services. Furthermore, the multinational technology
company has developed a strategy to reduce dependence of the business on the sale of
iPhones. This strategy involves putting greater emphasis on services divisions of the business
and more investments on research and development of new products and services. The
iPhone maker has also specified unparalleled customer experience as a cornerstone of its
business strategy.

Structure:

During the period of 1997 – 2011, when Steve Jobs was at the helm, everything revolved
around him. However, since the takeover of the CEO role by Tim Cook on August 2011,
Apple organizational structure and culture has been modified to grant more autonomy for
decision-making for employees at all levels. Nevertheless, Apple organizational structure still
remains to be largely hierarchical due to the large size of the company. Also, project-based
teams represent an important feature of Apple’s organizational structure. Two main elements
of Apple organizational structure can be specified as product-based grouping and effective
collaboration between groups and divisions throughout the company. Functionality can be
specified as another important element of Apple organizational structure. Although, product-
based and project-based teams effectively operate to contribute to the bottom line, the line of
reporting and supervision is functional. Specifically, senior vice presidents reporting to CEO
oversee functions such as marketing and engineering, not products. Apple organizational
structure offers certain advantages such as strong control by senior management, employee
motivation due to promotion opportunities and clear division of authority and responsibility
within the company. At the same time, there are certain disadvantages such as lack of
flexibility of the business and less efficient communication across the business.

Systems:

Apple business operations rely on a wide range of systems that include but not limited to
employee selection and recruitment, employee performance appraisal, team development and
orientation systems. Moreover, the multinational technology company depends on transaction
processing systems, business intelligence and knowledge management systems. Apple
employee recruitment process comprises the following stages:

 Pre-recruitment: announcement of a vacancy with job description and requirements

 Candidate screening: screening for candidates who meet the basic qualification
criteria
 Hiring event: meeting and interacting with candidates to assess if they will fit Apple
organizational culture
  Interview: one-to-one or group interview that might involve role-playing activities
 Second interview: individual interviews where deeper questions are asked to assess
the suitability of candidate to the role
 Third interview: the last interview with a higher-level manager, where more technical
questions are asked
 Background checks: hiring managers check references of candidates and law
enforcement records as the last stage of recruitment process before making a job offer.

Moreover, the competitive advantage of the world’s largest IT company by revenue is based
on effective new product development systems to a greater extent compared to other systems.
Specifically, the company places design at the forefront of the new product development
process and the design teams are separated from the larger company in order not to
compromise their focus. Moreover, “the design process at Apple is not over when
manufacturing begins. In fact, Apple iterates the design throughout manufacturing. The
product is built, it’s tested and reviewed, then the design team improves on it and it’s built all
over again.

Soft elements

The soft elements of the McKinsey 7s model, in turn, include shared values, staff, skills, and
strategy. These elements are less tangible in nature and are more influenced by the
organizational culture. As such, the management does not have direct influence or control
over them. These elements are also harder to describe and directly identify – but are equally
important for an organization’s success and improved performance.

Shared values:

The core values at Apple is defined and communicated to foster a creative and supportive
organizational structure that will allow employees to perform optimally and enhance their
motivation and organizational commitment. The core values at Apple includes, but are not
limited to:- Creativity, Honesty, Transparency, Accountability, Trust, Quality & Heritage

The Apple business also ensures that all its activities and operations are conducted with high
ethical and moral standards that redefined and benchmarked against international criteria.

The corporate culture at Apple also encourages innovation and creativity by allowing
independence for growth to individuals and teams –thus helping them refine their careers as
well as personalities. Lastly, the corporate culture at Apple also has a supportive leadership
which works towards increasing employee motivation and job satisfaction by giving way to
visibility and accessibility. Apple ensures that all its job tasks and roles are aligned with the
core values that the company propagates. This means that all activities, tactics, and strategic
tactics employed by Apple will reflect its core values and will not deviate away from these.

Style:

Apple has a participative leadership style. Through a participative leadership style, Apple is
able to engage and involve its employees in decision-making processes and managerial
decisions. This also allows the leadership to regularly interact with the employees and
different managerial groups to identify any potential conflicts for resolution, as well as for
feedback regarding strategic tactics and operations. Through its participative leadership,
Apple is able to enhance employee motivation, and increase organizational commitment and
ownership amongst employees as well as other stakeholders. With its supportive and
encouraging organizational culture, Apple gives way to internal collaboration and
cooperation between employees, systems, teams, and departments. This cooperation and
collaboration at Apple is important since its operations are spread globally, and also because
tasks and responsibilities within the company often require inter-departmental feedback and
input. Moreover, with increased expansion, and synergy, the business also regularly forms
project teams – which function effectively because of the cooperative and collaborative
culture within the Apple organization. The human resource management system, as well as
the organizational training, supports all employees in their growth fairly and transparently.
This leads to effective team formation instead of nominal groups within the organization for
various projects, as well as department-specific tasks and roles.

Staff:

Apple has a sufficient number of employees employed across its global operations.
Employees for different job roles and positions are hired internally as well as externally –
depending on the urgency and the skill levels required. Based on this, it is seen that Apple has
employees who are skilled as per the requirements of their job roles and positions. All
employees are given in house training to familiarize themselves with the company and its
values. External training along with in-house training is provided for skill level enhancement.
All job roles and positions are designed to facilitate the achievement of business goals, and as
such, employee skill level at Apple is sufficient to achieve the business goals of the company.
Apple has a well-defined system for identifying potential needs of capabilities and capacities
for the organization. The human resource function of the business has a systematic process
that aligns all other departments to identify potential vacancies or skill gaps. Based on the
nature of the need, the human resource department arranges for recruitments which may be
permanent or contractual in nature, as well as arranges training sessions if need be for the
current workforce.

Skills:

Apple has a commendable workforce, with high skills and capacities. All employees are
recruited based on their merit and qualifications. Apple prides itself on hiring the best
professionals and grooming them further to facilitate growth and development. Apple pays
particular attention to enhancing the skills and capacities of its employees. It arranges regular
training and workshops – internally as well as externally managed- to provide growth and
development opportunities for its employees. Apple focuses on personal as well as
professional growth for its employees and works accordingly with them. The human resource
is one of the core competitive advantages of the company. The skills of employees are
developed specifically for job roles and requirements at Apple and provide a competitive
benefit to the company – where players cannot imitate employee skills or training. This
creates a unique and non-substitutable competency for Apple.

Shared Values: Norms, principles, and standards that are the ‘company guidelines’ that all
staff members follow.

VRIO Analysis:

Core Competency Valuable Rare Inimitable Organized Result

Research & Yes Yes Yes Yes Sustainable

Innovation competitive advantage

Marketing Yes Yes Yes Yes Sustainable

competitive advantage

Product Line Yes Yes Yes Yes Sustainable

competitive advantage

Product quality Yes Yes Yes Yes Sustainable

competitive advantage
 Talented HR Yes Yes No Yes Competitive Parity

Brand Equity Yes Yes Yes Yes Sustainable

competitive advantage

Global Recognition Yes No Yes Yes Competitive Parity

Supply Chain Yes Yes No Yes Competitive Parity

Bargaining Yes Yes No Yes Competitive Parity

Strength

Global sales and Yes Yes No Yes Competitive Parity

Distribution

BALANCE SCORECARD

The term balanced scorecard (BSC) refers to a strategic management performance

metric used by various organizations to identify and improve various internal business
functions and their resulting external outcomes.

Strategic Measures Targets Initiatives

Objectives
Financial Financial stability Shareholder value Increase sales Creating Apple
(Increase revenue) Ecosystem

Customer Customer Purchase rate, Increase retention Good feedback

satisfaction Retention rate of consumer system

Internal Efficient Efficiency ratio, Maximum Core competency

utilization of Operational efficiency of through hours
Business
resources efficiency innovation, rate, Apple’s
Process Workplace safety Tendering

Learning and Employee Employee attitude Employee Product

learning and new excellence, diversification
Growth
product revenue Sustained demand
Almost every time a company embarks on a new project or strategic goal, the leadership
relies significantly on task delegation, activities, and timetables to assist shape and align each
goal. However, there is frequently little significant visibility or transparency into the status of
the target. While this method isn't inherently incorrect, balanced scorecards can assist in
avoiding potential issues.

1. Learning and growth are analyzed through the investigation of training and knowledge
resources. This first leg looks at how well data is acquired and how well employees use that
data to turn it into a competitive advantage in the industry.

2. Business processes are evaluated by investigating how well products are manufactured.
Gaps, delays, bottlenecks, shortages, and waste are all tracked through operational
management.

3. Customer perspectives are collected to gauge customer satisfaction with the quality,
price, and availability of products or services. Customers share input on their current product
satisfaction.

4. To understand financial performance, financial statistics such as sales, expenditures, and

income are used. Dollar quantities, financial ratios, budget variances, and income targets are
examples of financial measurements.

These four legs comprise an organization's vision and strategy and necessitate active
management to analyse the data gathered. A Balanced Scorecard helps a company's
management make important decisions that are in line with the company's goals, allowing
them to innovate and achieve new heights of success. It establishes a foundation on which to
build until the intended outcome is reached. Apple Inc., a prominent technological business,
is a well-known example of a company that uses the balanced scorecard in its operations.
iPhone, Apple TV, Mac, iPad, and iPod are some of Apple's most popular products.
Furthermore, Apple, Inc. sells its goods through Apple stores, third-party physical retail
locations, and its direct sales force all over the world. Apple Inc. utilises five performance
indicators:

 core competencies

 employee alignment and commitment

  market share

 shareholder value.

Apple Inc. did not always prioritise its customers. They used to focus on their technology
and products, but since then, they've shifted their focus to client satisfaction, which is now a
main pillar of their business. In order to better serve their customers, Apple, unlike other
corporations, decided to create their own surveys.

To help employees expand their abilities, it's vital to supply them with new solutions like
user-friendly interfaces and effective distribution mechanisms. Many Apple officials,
however, fear that assessing the impact of these remedies will be challenging. In the long
run, this American software company will use quantitative metrics to establish the answers
they need and to see if empowering employees in this way leads to development of their
skillsets.

Apple Inc. believes that employee commitment and alignment are essential. As a result, they
undertake a complete employee survey of every organisational branch every two years, with
surveys distributed at random among employees. The goal of the surveys is to see how well
each employee understands their individual plan and how well they can connect it to the
bigger organization's strategy in order to succeed.

Market share is another significant metric, especially for a company in the tech industry.
This is because Apple Inc. benefits not just from capturing as many market shares as
possible, but it also has an impact on the software developers with whom it collaborates.

To increase shareholder value, Apple Inc. invests in its sales vision, product design, global
manufacturing, and operations. This link is used to investigate new business opportunities
and assess a unit's performance. It's also connected to the company's evaluation system. By
doing so, the company hopes to raise funds for future expansion.

Instead of allowing a "managing" strategy based on short or medium-term results, these five
indicators contribute to the management of "long-term performance." By focusing on those
five pillars, each unit may improve its operations and performance over time. Overall, the
balance scorecard helps Apple Inc. maintain track of their performance so that they can fulfil
their established objectives and goals.
RECOMMENDATIONS

Apple has to drastically decrease dependency on iPhone. Since 2007 when Steve Jobs
made the ground-breaking announcement of the iPhone which was huge success . After that
whenever a new iPhone was about to be launched the eagerness to see the new product never
came down and the reason why this happened was because I phones that apple launched
back then for genuinely ground-breaking and if you look at the delta between iPhone and
other phones you will see a stark difference in both of them to tell you about it while other
phones at qwerty keypads the first iPhone was revolutionary because of a huge leap into
touch screen and the introduction of the iconic App Store while other phones were catching
up with touch screen iPhone 3G was twice as fast as the iPhone and the App Store began to
have a turn off apps which increase the utility value of the phone to a large extent. Similarly
iPhone 4 was ground-breaking because of FaceTime HD recording camera and most
importantly because of the announcement of I cloud that enabled apple users to seamlessly
navigate between apple devices then we had the iPhone 5 which had fingerprint and Siri was
fully functional this was followed by iPhone 6 which is not just want the best design phones
in the world but also said the gold standard for a camera in a mobile phone this is the reason
why iPhone 6 became the highest sold iPhone in history with more than 222 million units
sold but by this time that is by 2015 apple dangerously become dependent on iPhone where
in more than 60% of the entire companies revenue came from just iPhone sales. This is
where things started to change as take got more accessible and competition began catching
up there were only a limited number of ground-breaking announcements that apple could
make for iPhone and as we saw every other phone started having fingerprint, face unlock,
great camera and all thanks to Google Assistant seems to be way better than Siri now and
not so surprisingly iPhone after touching a record of 231 million units has not reached
similar sales in 6 years now and although in 2021 the revenue has gone higher than 2015
with a drastic increase in the cost of the iPhone the unit sales still seem to be lower than
2015 . Therefore, apple is on the edge of hitting the ceiling because it can no longer increase
the price of the iPhone that is very less scope to acquire new users unless the price drops
drastically . Lastly if the price drops the profit margins are going to take a hit which makes
the most important pillar of Apple's which is profit at stake.

Apple should plan to increase its revenue from software services - which essentially means
that apple is not going to transform from being a hardware company to becoming a software
services company. Apple built its ecosystem with three types of products the first was the
entire product that got you into the ecosystem then you add retainers which are services like
I messages, apple arcade, filming pro because of is when you go to buy another laptop you
are more inclined to choose a Mac book pro which is an upsell product and then after you
buy the second apple product you have the special ecosystem features like airplay and I
cloud that type this device is so well together that it makes it even more difficult breakout of
the apple ecosystem but now apple wants to make a small change instead of having these
apps to just act as retainers apple should build more apps and services and turn them into
money machines. apple is deploying the razor blade model – it is a model wearing a
company says the first product at lesser margins so that they can sell you a low cost high
margin products regularly to create a recurring income for the company now in case of apple
this is a very big deal because the most powerful companies in the world is transforming to
this business model. apple is so powerful that it is both capable of creating new category of
products as well as disrupting an age old industry a classic example the same was the iPad
that created a new category of devices and then we saw in accessories industry being
disrupted by Apple Watch within just two years able went to become the largest watch
manufacturer in the world. So now apple should specifically get into software services it
should basic principle of the razor blade model selling software services a high margin
recurring income channel on top of that as a by-product they also act as retainer hooks to
keep people in the ecosystem and if you look at the numbers it's quite evident from 2015 to
2021 while the revenue from iPhone has steadily risen from approximately 155 billion to
191 billion dollars ,which is an increase of 23.8% . The revenue from services has increased
by 243% going from just 19 billion to 68 billion dollars while the profit margin from iPhone
is just 35% the margin from software services is nearly 60% E.g. App Store was being run
at a profit margin of 78% as of 2019 according to Bloomberg.

By apple entering the sass or software as a service domain. There are three specific areas
that apple should try to cash in the first is using its large amount of data about which apps
are the bestselling apps in the App Store it has actually details about who buys them and
what they use it for apple could directly launch a service that is in direct competition to an
existing app creating an unfair advantage where competition either has to raise its prices or
cut its margins short whereas apple wins both ways. Another way is by getting into super
high potential spaces which includes healthcare and fintech and as you must have seen
already they have already laid a solid foundation with apple card and the Apple Watch while
one side apple customer by default the most premium model in the world making let them
perfect audience for financial services on the other side Apple Watch already has a
tremendous amount of data to sell healthcare services to its customers and this is such a
revolution that it has a huge scope of application and aging parents should share their heart
health data which includes pack integration of data because of which healthcare centres all
across the United states can seamlessly access and share patient data with each other this
will enable patients to get done with hospital procedures within a few seconds as compared
to the existing TDs procedure Apple is playing its foundation into a much needed healthcare
system starting from the United states therefore with apple be held up it wouldn't be
surprising if apple became the biggest health insurance company or even the largest credit
card company in the world. Lastly apple should also diversify into product launches like the
apple car project an apple glass which could go on to become the next major pillow for the
company.