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Analysis of the Strategic Planning and


Emergent Strategies of Apple Inc.
A Supplementary Coursework Assignment

Module Title: MN-M522

Student ID:

Word Count: 3372

Date:
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Table of Contents

1.0 Executive Summary .................................................................................................. 4

2.0 Introduction and Company Context ........................................................................... 5

2.1 PESTEL Analysis of Apple Inc. ............................................................................ 10

2.2 Porter’s Five Forces............................................................................................. 13

2.3 Bowman’s Clock .................................................................................................. 16

2.4 SWOT Analysis.................................................................................................... 18

3.0 Strategic Planning Vs. Emergent Strategy .............................................................. 22

3.1 Apple’s Strategic Planning ................................................................................... 23

3.2 Emergent Strategies implemented by Apple ........................................................ 24

4.0 Innovating to Win..................................................................................................... 25

5.0 Conclusion .............................................................................................................. 26

6.0 Recommendations .................................................................................................. 26

References .................................................................................................................... 28

Table of Figures

Figure 1: First Telephone. (Amacad, 2022) ..................................................................... 6


Figure 2: Apple Q1 report. (Snell and Moren, 2022) ....................................................... 7
Figure 3: Apple Financial Statements. (Macrotrends, 2022) ........................................... 8
Figure 4: Apple Third Quarter Report. (Apple, 2022) ...................................................... 9
Figure 5: PESTEL Analysis. (Peterdy, 2022) ................................................................ 10
Figure 6: Overview, Pestel Analysis. (Author, 2022) ..................................................... 13
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Figure 7: Porter's Five Forces- Apple. (Booth, 2015) .................................................... 14


Figure 8: Porter's Five Forces-Cont'd. (Booth, 2015) .................................................... 15
Figure 9: Bowman's Clock. (Cuofano, 2022) ................................................................. 16
Figure 10: Competitive positioning of Apple Inc. (Aroosh, 2018) ................................... 17
Figure 11: SWOT Analysis. (Shaw, 2017) ..................................................................... 18
Figure 12: Apple Inc. Swot Analysis. (Author, 2022) ..................................................... 19
Figure 13: Apple Inc. Strength and Weakness. (Author, 2022) ..................................... 20
Figure 14: Apple Inc. Opportunities and Threats. (Author, 2022) .................................. 21
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1.0 Executive Summary


Apple Inc. is one of the biggest technological giants in the world and the world’s most
profitable company, being the first hit the one trillion-dollar mark (Csiszar, 2022). This
report analyses the inherent strategies employed the technological behemoth that aided
their rise to the top of the technological and economical profitability food chain.

The analysis begins with a situational analysis of the company, exploring its standing
within the industry using a PESTEL analysis, SWOT analysis, Porter’s five forces as well
as Bowman’s clock to understand Apple’s strategic positioning in the industry. Findings
showed that Apple integrated an umbrella strategy (Aroosh, 2018), that allowed for partial
control to be harnessed by the management of the company while giving enough room
for emergent strategies to be adapted and implemented. This approach can be seen in
the way Apple applies itself to constant innovation to ensure constant development of
user-friendly, high-end products at cost effective prices. The company also applies a
differentiated strategy that does not focus on a particular segment of the market but
explores ways to create and generate revenue across all market segments.

Apple also implemented emergent strategies as can be seen in their shift in focus first
from the production of personal computers to mobile devices and then a shift in revenue
concentration from its iPhones to other web-based service offerings to diversify income
streams (Broussard, 2019).

The company also prizes itself as a champion of innovation by building disruptively


innovative products such as the Apple TV and Apple Pay as well as apply integrated
innovation to the production of other devices such as the first iPhone, with a
consciousness of easing life for its consumers and delivering the best computing
experience to all users across board (Apple, 2022)
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2.0 Introduction and Company Context


The economic dimensions of the world are constantly changing through the prism of time,
and these changes have played a pivotal role in shaping the world we currently have.
Some of the most significant changes that have positively impacted the state of the world
that we see today include the agricultural revolution of the 17th century, the 18th-century
industrial revolution and the technological revolution that had its roots in the 19 th century
(Aljafari, 2016). In recent times, the world has begun to experience a remodelling
surrounding evolutionary, revolutionary and innovative technological advancements in
the information and telecommunications industry. These innovations have essentially
shrunk the world into a global village, making information much more available.
Communication across continents has transitioned from being a function of weeks of
travelling mails to seconds of instant messages. The economic revolution driven by the
Information Technology industry through the innovation of digital communication devices
geared at simplifying the efforts and yearning for connection between humans and the
provision of easy-to-reach information has had a dynamic effect on the quality of life and
general lifestyle choices of the modern age (Beyrouti, 2006). Starting with the invention
of the first telephone in 1876, credited to Alexander Graham Bell, communication has
over time steadily become more and more a reference point for technological
advancements and Information Technology companies that adopted the philosophy of
this change in its early stages and championed its cause as well as new start-ups that
provided fresh perspectives and led the spike in innovation across the industry have since
then become major players in not just the industry but in the economy of the world as a
whole (Bărbulescu et al., 2021).
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Figure 1: First Telephone. (Amacad, 2022)

One company that has spearheaded the modern race for faster, more efficient, and user-
friendly communication devices is Apple Inc. Founded in 1976, Apple is currently one of
the world’s largest publicly traded companies and arguably the most well-known brand in
the technological industry. The first publicly traded company to ever hit the $3 trillion
market cap, a feat achieved on the third of January 2022, Apple has established itself as
a force to be reckoned with in the information technology industry. Apple is a technological
giant whose growth has not shown any signs of halting, as seen in the 11% increase in
its first-quarter revenue of 2022 compared to the first quarter of 2021, with a record-high
revenue value of $123.9 Billion (Csiszar, 2022).
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Figure 2: Apple Q1 report. (Snell and Moren, 2022)

After the Coronavirus pandemic that shut down the world for over a year, many
companies’ revenue streams took a significant hit. However, Apple has stayed on a
consistent high, with the company’s stock splitting 4-1 in the summer of 2020. At the end
of the first quarter of 2022, the total shareholder equity of Apple stood at $63.09 billion,
with the revenue at the end of the 2021 fiscal year standing at $365.817 billion. In the
third Quarter of its fiscal 2022, which ended on the 25th of June, Apple posted a revenue
record of $83.0 billion, a 2% year-over-year increase with quarterly earnings of $1.20 per
diluted share.
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Figure 3: Apple Financial Statements. (Macrotrends, 2022)


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Figure 4: Apple Third Quarter Report. (Apple, 2022)


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2.1 PESTEL Analysis of Apple Inc.

Figure 5: PESTEL Analysis. (Peterdy, 2022)

The PESTEL analysis of Apple inc. explores the myriad external factors such as
technological, economic, social and political factors that influence its operations alongside
environmental and legal aspects. It analyses the extrinsic scenarios that have significant
impacts on the brand and its processes. This analysis is imperative for conglomerates,
the likes of Apple, as it helps to comprehend the shifting dynamics of its industry and
market as well as effectively drive innovative processes that optimise the efficiency of its
operations and ensure continual profitability (MBA Skool, 2021).

• Political

Apple being an American company that has most of its manufacturing operations
outsourced to China and Chinese companies, is significantly susceptible to the
increasing trade wars between America and China. This impacts Apple in the
sense that should America choose to increase the tariffs on importation from
China, then it is very likely that the Chinese government would also impose heavier
taxes on Apple. As one of the preeminent Tax Payers in the world, any major
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political issue would largely impact its overall performance commercially (MBA
Skool, 2021). Apple would also incur inordinate costs in a search for alternative
manufacturing options to China, which would cause an upward influence on the
prices of their product and consequently a loss of revenue. America’s stringent
labour laws, especially surrounding work visas, also significantly hamper Apple’s
competitive edge in the labour market (Khan et al., 2015).
• Economic
The global fluctuating and deteriorating economic conditions primarily driven by
the global recession and inflation that followed the Covid-19 pandemic have the
capacity to significantly affect Apple’s revenue generation as the upward
movement of the poverty quota curve can have a hazardous effect on the
purchasing power of Apple customers and cause a decline in the sales
experienced by Apple. There is precedence for this as Apple has experienced a
decrease in sales as a result of the global recession, as was evident in 2013, where
there was a 41% decrease in sales in the United States between 2012 and 2013
compared to 2011-2012 (Khan et al., 2015). The growth of developing countries
can also significantly impact the distribution line of Apple products and,
consequently, their international revenue (Chen et al., 2021).
• Social
The increasing socialising power that technology offers has significantly
contributed to changing perspectives on what it means to be a part of the Elite.
This shifting paradigm has tremendously and positively impacted Apple’s status in
the Information Technology industry. Apple has successfully cemented their
reputation as a high-end user-friendly product that bestows on its user an elite
status, effectively making Apple a premium brand globally and a status symbol
(Airan, 2015). Apple has also begun targeting young individuals and music
enthusiasts by venturing into the entertainment sector and providing exclusive
services to them, one of which is their flagship product, Apple Music. However, the
marketing strategy employed in deploying this product has attracted significant
backlash from many musicians, potentially damaging Apple’s overall image
(PESTLEAnalysis, 2015). Another socio-cultural factor influencing Apple’s growth
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is the fact that several international customers, particularly in Asia, are beginning
to switch to cheaper, locally sourced products to support innovation within
domestic brands (Chen et al., 2021).
• Technological
With technological advancements driving towards a necessity for cloud-based
computing, Apple has a tremendous advantage for growth as the company
currently offers its users the ability to access up to 2TB of cloud storage. Apple Inc.
has the opportunity to optimise its profitability by leveraging its cloud computing
technology to get ahead of the competition in the industry, with already growing
revenue generated from cloud computing services (Chen et al., 2021). However,
Apple is not the only brand taking advantage of this opportunity as competitors
such as Google provide users with variety by offering cloud computing services.
• Environmental
Climate change and corporate social responsibility towards its mitigation have
become a recurrent theme across all industries ((Airan, 2015). Every company, the
world all over and their production processes, including supply chains, is being
subjected to the scrutiny of environmental agencies as well as laws and
legislations to ensure that the damage done to the environment is kept at a
minimum. Apple has made significant efforts to comply with these stands, which
can be seen in the way all Apple offices, data centres and retail stores are run via
100% renewable energy, as well as pronounced efforts to recycle and reuse
material to mitigate wastage in the production process (Hasan, 2013).
• Legal
Over the years, Apple Inc. has been embroiled in a number of legal issues and
ethically questionable practices. For instance, in 2010, it was discovered that
Foxconn, one of Apple’s manufacturing partners, was employing child labour in its
factories (Etzioni, 2018). There have also been allegations of inhumane treatment
of workers at another manufacturing plant in the Apply supply chain (McLaughlin
and Bridgman, 2013). Apple was legally held accountable for these questionable
practices and has made significant efforts to increase compliance in all ethical
considerations (Myers and Fellow, 2013). Apple also recently entered a market
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with stringent regulations on financial services with their product Apple pay which
significantly increases the levels of governmental oversight and risks of litigation
(PESTLEAnalysis, 2015).

P E S T E L
•US-China •Recession •Status •Cloud • Climate •Financial
Trade wars and Conscious Computing change sector
inflation Society Technology and Legislation
•Tax Recycling
Regulations •Developing •Adoption of •Competent •Ethical
Countries domestic Competitio issues
•Labour products n
Laws

Figure 6: Overview, Pestel Analysis. (Author, 2022)

2.2 Porter’s Five Forces


Developed by Michael Porter in 1971, Porter’s Five Forces is an analytical framework that
explores the reaches of competition within an industry (Dudovskiy, 2021). It is a diagnostic
tool that market analysts and investors use to gain clearer perspectives about a
company’s strengths and standing within its industry (Maverick, 2022). The analysis
covers the level of competition within the industry, bargaining power of the buyers, threats
of substitution, threats of new entrants, and the bargaining power of the supplier. When
applied to Apple’s standing in the IT industry, the forces can be analysed as follows;
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Figure 7: Porter's Five Forces- Apple. (Booth, 2015)


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Figure 8: Porter's Five Forces-Cont'd. (Booth, 2015)


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2.3 Bowman’s Clock

Figure 9: Bowman's Clock. (Cuofano, 2022)

Bowman’s strategy clock is a strategy tool that expands on Porter’s five forces to provide
options for positioning within a market on the premise of perceived value and pricing.
Relatively easy to use, Bowman’s clock analyses and compares the competitive standing
of an organisation with rival businesses’ competitive abilities and advantages in relation
to differentiation advantage or cost advantage (Nilsson and Rapp, 2005). The marketing
concept adopted by Apple with respect to market segmentation, marketing concepts and
strategies, positioning strategies, and target marketing is a strict marketing paradigm that
combines the values and considerations created explicitly to address the needs of the
customer (Lamb et al., 2011).
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Figure 10: Competitive positioning of Apple Inc. (Aroosh, 2018)

Apple’s differentiation strategy, as seen above, positions Apple to gain a much higher
competitive advantage by producing high-quality products at a standardised price. The
model adopts two theories; product valuation and expense, including eight intervals in
four quadrants without frills. The model also spots focused differentiation, low value, low
cost, hybrid and high price strategies. This strategy was deployed on the introduction of
the iPad in 2010, as it is one of the most efficient strategies for market development. This
is because the model combines high-quality features with reasonable prices, making the
product much more attractive to the target market (Thomas and Baden-Fuller, 2016).
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2.4 SWOT Analysis

Figure 11: SWOT Analysis. (Shaw, 2017)

The SWOT analysis is another analytical framework that is used to evaluate and
understand the competitive standing of a company in its industry. The SWOT analysis
explores intrinsic and extrinsic factors that can substantially impact the company's
profitability and industrial standing, as well as its current and imminent potential (Kenton,
2022). The SWOT analysis is meticulously orchestrated to provide a realistic, data-driven
and fact-based overview of the strengths, weaknesses, imminent threats and
opportunities for innovation within its industry. This analysis, applied to Apple
Incorporated’s business model and structure, yielded the following findings;
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Figure 12: Apple Inc. Swot Analysis. (Author, 2022)


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Figure 13: Apple Inc. Strength and Weakness. (Author, 2022)


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Figure 14: Apple Inc. Opportunities and Threats. (Author, 2022)


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3.0 Strategic Planning Vs. Emergent Strategy


Strategic planning entails the formulation and implementation of decisions that determine
the general direction of an organisation’s future (Kerzner, 2001). This is vital to the
survival of any organisation because it is the template for adaptation in the dynamic
ecosystems that businesses exist in and applies to all levels of management and
organisations. Strategic planning ensures that the business’ capabilities are evenly
matched to the industry market within which it conducts operations for the present and
the future (Hooley et al., 2017). On the other hand, emergent strategy places its focus on
strategic learning and adaptation by involving employees across all levels in the
organisation, collecting and analysing data and information from the operational
processes and environment in a systemic and dynamic way, enabling the organisation to
adapt and correct its direction as the current realities direct or demand (Fuller-Love and
Cooper, 2000). This strategy, overall and over time, through consistent implementation,
increases the reflex, resilience and agility of adaptation of the organisation and enhances
its complexity by disrupting its inherent top-down communication processes to create a
cyclic one (James, 2018). Mintzberg (1996) categorised strategy classified strategy into
five distinctive categories that, rather than explored in isolation, are treated as existing
within a continuum. These strategies include; Intended strategy, emergent strategy,
deliberate strategy, unrealised strategy and realised strategy.
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Figure 15: Mintzberg's classification of strategies.

3.1 Apple’s Strategic Planning


Apple’s vision statement gives insight into the strategic planning template that its
operations are based on. The vision statement states that the company is committed to
providing its users with a top-notch computing experience to every user ranging from
students and creative professionals to educators all over the world, through innovative
hardware, software and internet service offerings (Apple, 2022b). Due to the constantly
changing nature of the information technology industry, it would be imprudent for a
company like Apple to have a stringent strategy. External factors and extrinsic industrial
elements significantly impact the company and its processes; as such, the ideological
strategy that would be largely beneficial to the company would be an umbrella strategy
as this enables the decision makers and managers partial control, as well as target and
boundaries setting prerogatives to certain degrees while allowing a lee-way for adaptive
and responsive decision making in the events of influence from the external elements
(Mason, 2019). These can be seen in Apple’s implementation of its Business-level
strategy, where it employs a cost focus and broad differentiation strategy that involved
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the integration of smartphone sensors that cost less to drive an overall improvement of
the company. This increased performance can be seen in the introduction of the virtual
mouse, GPS navigation, camera stabilisation, intelligent consumption of power and
fingerprint sensors that, in turn, caused an upward movement of the efficiency curve of
the Apple smartphone (Sivakumar, 2020). The broad differentiation strategy implemented
through elegant product design, high-end branding, user-friendly interface, cutting-edge
aesthetics and seamless connectivity across devices also works to help Apple stand out
in the technology market (Meyer, 2015). The implication of this strategic planning is that
Apple must constantly apply itself to developing innovative products via research and the
growth of its market reach. Apple’s strategic planning also does not focus on specific
market sectors or segments but rather, competes by offering a wide range of services
that serve the various market segments of both information technology services and
consumer electronics, consequently, penetrating the markets and providing the company
with a much wider reach.

3.2 Emergent Strategies implemented by Apple


As stated earlier, Apple implements a hybrid, umbrella strategy that allows for adaptation
of the generic strategy in response to developments and pressures from extrinsic factors.
There are several examples of Apple’s adaptation of emergent strategy to drive business
growth and revenue generation. One such example is the release of the iPod in response
to falling demand of personal computers which was the initial focus of the company at the
time and the change of the name of the company from Apple computers to Apple Inc
cemented its adoption of the emergent strategy to diversify its original niche. The adoption
of this strategy has played a significant role in the status of the company as one of the
most innovative and valuable brands in the world. Apple also leveraged on an emergent
strategy to decrease its dependence on the sale of its smartphones and leverage its other
services to diversify and increase its revenue stream. This emergent strategy was
implemented by a reshuffle of the leadership structure into other departments to refocus
revenue generation mechanisms (Broussard, 2019).
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4.0 Innovating to Win


Apple has since inception established itself as a leader in innovation and a company that
has refused to settle for the status quo. The company’s vision statement to provide its
consumers with the best computing experience through research-centred innovation has
rung throughout its illustrious years in business. Starting with the Apple II computer that
completely revolutionised what it meant to have a personal computer, to the iPod that
changed the way people listened to music by expanding the horizons and pushing the
frontiers of what a music player could be (Mullaney, 2016), Apple has consistently proven
that they are constantly putting people at the forefront of their innovation in a bid to make
lives easier. The iPhone, when it was released, was a combination of an iPod, Mobile
Phone and Internet service provider, a combination that had not yet been explored fully,
all amalgamated into a seamless easy-to-use design. Apple has not relented in their
efforts at innovation with products such as the Apple Airpods, Apple Watch, Apple Pay,
Apple TV, iPads and iPhones blazing new trails in the world of information technology.
These innovations have contributed immensely to Apple’s success as a company.

Figure 16: Apple innovations. (TelecomTV, 2017)

Apple has been able to drive these levels of innovations by working around a strategy
that prioritises people and their needs. Apple looks into how to make life easier and more
convenient, a strategy that can be seen in the way Apple amalgamated the iPod and
Mobile phone into the iPhone (Nielson, 2014). It also incorporated its corporate culture
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with innovative strategy such that it is the driving force of all their corporate decisions.
Another way Apple was able to drive innovation as splendidly as it did was by balancing
structure and flexibility in a way that allows freedom for innovation within the rigid
deadline-driven corporate world. Apple also valued customer feedback immensely as this
is one way to understand the populations pain-points in real time and create innovative
ideas to alleviate these pains

Apple is currently looking into more innovations, particularly on the automobile frontiers
with talks of a self-driving car, “Project Titan”, under development. It is without any doubt
that should Apple stick to their innovative trends, the car would be a roaring success that
would greatly make life easier.

5.0 Conclusion
Apple has already made a name for themselves as gamechangers in the technological
world by driving innovation and creating high quality products that revolutionise what
technology has the capacity to be. It is able to do this by using an amalgamation of
strategic planning as well as efficient adaptation of emergent strategy to help the
company stay at the top of the food chain, a feat that in admirable and commendable.
Apple has learnt to understand the current realities of the world that we live in, find the
loopholes and pain areas and explore integrative ways for innovation to solve those
problems. This is one of the reasons that Apple has remained relevant and profitable over
the years. With its current strides in the world of technology, there is little doubt that its
momentum would continue on its upward trajectory through the years.

6.0 Recommendations
Strategic planning is vital to the success of any business, however, the technological
industry is highly unpredictable and stoic unchangeable and unadaptable strategies
would inadvertently lead to the failure of the company. Every organization should have
provisions to react and effectively adapt to changes within the ecosystem of their business
to survive, thrive and lead the pack. This is a lesson that Apple has internalised and made
a part of its core values and is currently reaping its benefits. However, the technonological
giant can make some changes to further increase its revenue streams. It would be greatly
beneficial to the company to look into relaxing its stringent restrictions concerning third-
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party apps and allow for greater customisation options as this would help to even out the
growing threat that Android devices currently pose to the company. Apple can also look
into adaptive marketing strategies that can help to increase sales in other countries as
well as consider a review of their pricing across board to make the device more affordable
and keep up with the global decline in purchasing ability.
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