According to Caruso, Di Battista, and Gattone (2020), the group of forces affects the organization's work from within and its operating elements. It can be analyzed using Porter's five forces analysis, which examines alternative products, new competitors, and competitiveness from opponents', buyers', and suppliers' bargaining power (Indiatsy, Mucheru, Mandere, Bichanga & Gongera, 2014).
Apple's Micro-Level Analysis
1. Threat of substitutes: So far, there are no alternative smartphone products; even smart boards are not substitutes. What is meant by substitute products is not competing for products; instead, products that can replace the same service here are the landline phone or calling via the computer, which is almost uncompetitive (Lan, 2021).
2. Threat of new entrants: The cost of this highly developed industry makes for very few new competitors. They can only formally compete in markets that depend on low prices, but it also will not take the share of Apple, which does not compete in these markets and does not have a share in them (Maverick, 2022).
3. Unity of competition from opponents: Great competition exists among the major companies in the technology market. Companies such as Samsung, Google, and Amazon actively try to take Apple shares, even if the smartphone competition was and still is in favor of Apple. However, the market remains open for tablets, laptops, and other accessories (Khan, Alam & Alam, 2015).
4. Bargaining power of customers: Despite the intense competition between Apple's prices and its competitors, Apple has built a broad base of customers who are entirely loyal to its brand. Buyers who turn to Apple know that they are paying a higher price because of loyalty, not because of the power of technology or the higher capabilities of the phones.
5. Bargaining power of suppliers: The abundant offers in front of Apple make it choose comfortably between suppliers; this cannot be considered a threat to Apple because current suppliers do not risk losing a contract with the company
Macro-level analysis
According to Thai & Turkina (2014), the macro-level analysis goes deeper into the relationship between society in all its layers and institutions. That is why this type of analysis concerns what is beyond the immediate environment and background of the individuals already known. Apple can be analyzed using the PEST tool concerned with political, economic, social, and technological factors.
1. Political factors: Apple increased its annual lobbying budget to $7.41 million last year, considered minor compared to Google and Microsoft. There are always doubts and concerns about using Apple devices to spy on government personnel, whether hackers use them inside or outside the United States. Since Apple keeps most of its operations abroad, it avoids paying hefty taxes to the US government (Froud, Johal, Leaver & Williams, 2012).
2. Economic factors: Approximately 59% of the company's sales come from outside the United States, but it is negatively affected by the UK government's tendency to strengthen the US dollar; another point about employment is that Apple was and still relies more on Chinese labor for the abundance of materials and resources in this market
However, the cost of Chinese labor exceeded $6.5 per hour in 2020, which made the company seriously consider moving its factories to India and other countries (Yie, Zhi & Ping, 2021).
3. Social factors: Apple's sales target the wealthy and upper middle class to sell their devices in the developing world; these social groups can change their Apple devices every year or two, but marketing in this direction needs to be more robust to upgrade them. Most users have stuck to their current devices for more than ten years due to the large amount of personal data saved (Zhang, Shi, Abdullahi, Shao & Huo, 2020).
4. Technological factors: Although its competitors are the most substantial companies operating in the technology sector, such as Samsung and Google, competition is still in favor of Apple, as it always imposes its prices on the market due to innovations and unique services with each release (Froud, Johal, Leaver & Williams, 2012).
Challenges and opportunities associated with both analyses
ChallengesApple's challenges lie on the macro level much more than the micro level. The international conditions surrounding the company are only sometimes good; attention should be paid to the tense relationship between the United States and China and the international laws protecting the environment and workers. Increase privacy laws in the European Union. On the micro level, you find that the chances of Apple's current competitors are on the rise, especially since competitors such as Samsung, Google, Microsoft, and Amazon are pioneers in this field.
Opportunities: Chances at the micro level are much better for Apple than at the macro level, as alternative products are almost nonexistent and new competitors have a long time to enter the real competition in the market. As for the buyers, they are loyal to Apple, and the negotiators cannot easily sacrifice Apple in favor of any other company. As for the macro level, the stable policies in developed countries are led by the United States. The increasing access to mobile phones and their extreme importance in the lives of individuals. Finally, the trade environment between countries should be improved.
Conclusion
Apple should always take advantage of opportunities and find alternative strategies to overcome challenges. So far, Apple's massive success and vast market value have been caused by the company's strategies to be No. 1 in the phone market, and the iPhone is the most profitable device in the world.
References
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