Introduction
Apple Inc. is a multinational brand that has worldwide presence. The company manages to satisfy consumers’ needs with innovative products and excellent services, which is evident from clients’ loyalty and persistent interest in Apple’s production. Apple can access markets and consumers that smaller brands cannot, ultimately facilitating brand recognition and consumer loyalty, hence, sales. However, operating internationally also leads to uncertainties when managing different political, economic, socio-cultural, and legal perspectives. Moreover, while the corporation’s investment capability is above average due to the high revenue, approaching other markets is complex due to the already established branding and direction in the business realm. Apple’s internal and external environment determines the expansion strategy choice.
The expansion to a non-traditional market is among the strategic decisions characteristic of Apple’s corporate policy. Apple was founded in 1976 by Steve Jobs and Steve Wozniak and has since become one of the most influential tech corporations alongside Google, Facebook, Amazon, and Microsoft (Ederstone, 2020). The brand’s vision is to create products that serve people and improve their life. Furthermore, the mission is to provide consumers with the best quality personal computing goods worldwide (Yie, Zhi, and Ping, 2021). Among the products Apple offers, the most popular are the iPhone, personal computers, iPod, and iPad, alongside software designed by the corporation and online services (Greg, 2020). Thus, the operation area is technology, making Apple one of the biggest suppliers in the domain. While the technology area is extensive as is, the aim is to propose an expansion strategy that would allow Apple to follow a current innovation trend, namely, manufacturing electric vehicles.
Apple’s potential in the automotive market is a question of discussion because this sphere is new for the brand. Moreover, none of the tech giants mentioned previously have invested in this area (Yie, Zhi, and Ping, 2021). As a result, the potential appears to be a positive factor that can lead to the company’s success. However, the solution requires an extensive analysis of the company’s environment presented further.
The Environment of the Organization: Identification of the General Environment of the Organization
Apple is a multinational organization managing business processes based on the environments that affect the brand’s operations. For the framework to be examined, it is essential to identify factors correlating with the economic, social, political, legal, and technological environments. Apple certainly offers products and services for people in various countries that differ based on their economics, political systems, and social climates. However, from a global context, it is vital to determine the concepts that ultimately affect the sales and the corporation’s progress. SWOT analysis and a PESTEL analysis will be applied to examine the features of the ideas above to discuss internal (strengths and weaknesses) and external (opportunities and threats) characteristics (Jeyarathnam, 2008). The exterior and interior environments are essential in how the organization builds its company structure, culture, position on the market, and policies generating interest and loyalty to the brand.
Analysis of the General Environment of the Organization
PESTEL analysis focuses on discussing Political, Economic, Social, Technological, Environmental, and Legal factors. Political context influences the sales of Apple production, and trade wars between China and the United States show that the political climate affects the company’s revenue (Edeh et al., 2021). From the economic perspective, the company is in the maturity stage that supposes that the organization has reached a peak of economic growth, and the sales are steady and high (Jeyarathnam, 2008). It exemplified that consumer interest will decrease unless investments are allocated to innovation, which is the severe technological factor that keeps the popularity of Apple stable. The social element emphasizes the company’s association with high-end elite production. Apple’s competitive advantage is the niece luxury goods segment, which is often less appealing to the masses. However, such strengths as marketing strategies, unique branding, and facilitating awareness generate success (Edeh et al., 2021). From the legal point of view, Apple dominates in the questions of intellectual property, which makes it one of the leaders in this sphere. The environmental perspective is biased because Apple offers a relatively small range of products, with a single smartphone updated yearly, yet no significant changes are implemented (Zhang and He, 2019). From one point of view, the small number of gadgets does not harm the environment as much as the extended product line does. From another point of view, it limits the choice of clients, which can be regarded as an economic weakness.
SWOT analysis focuses on the company’s weaknesses and strengths to elaborate different corporate strategies. In regards to forces, Apple provides unique products, exemplified by the extensive popularity of the brand. For example, the iPhone has dominated the smartphone market for multiple years and has become not only the brand’s most sold item but also an iconic technological device with a big following (Hussein & Hartelina, 2021). It is also essential to highlight the intellectual property of the company. Apple’s software provides consumers with a more simple yet personalized user experience. While Samsung offers a broader range of devices, including affordable and less advanced yet less costly ones, Apple’s devices have been steadily designed to please the customer disregarding the high price (Raketić and Rašević, 2017). Such areas as innovation, unique branding, and customer-centered policies help the corporation maintain a highly competitive position in the market, exemplified through demand. Last but not least, the significant sales allow the brand to have extensive capital to invest in further growth and market expansion.
While Apple’s internal environment presents various strengths, specific weaknesses are to be mentioned. As mentioned, Apple offers luxury devices, which exemplifies the lack of opportunities regarding consumers’ purchasing power. The high prices limit sales, and while the branding creates the image of a unique luxury product, in reality, the devices are not affordable, especially compared to competitors (Amron, 2018). Price is a significant facilitator of consumer behavior, and Apple keeps them high.
Identification of the Task Environment of the Organization
The task environment is connected with the definition of opportunities. In terms of the task environment, Apple operates in the technology industry. The market is one of the primary areas of the economy and has been developing and improving as new advances are being constructed. Another opportunity to determine the brand as a multinational organization is its presence in the global market. Apple can maximize its potential by introducing its products in various world areas. As a result, specific political, social, economic, and technological difficulties correlating with the situation in a particular area will not affect the company indefinitely. The approach to consumers and the consumers themselves differ. However, adhering to various demographic minimizes impacts such as political changes, crises, and similar national shifts.
Competitors Analysis
Competitors are the primary threat to Apple’s strategic development. According to researchers, the competition is mainly between Apple, Samsung, Huawei, and Xiaomi (Chen, Liu, and Gong, 2021). Apple is the only luxury brand, which may create more consumer demand for a less costly alternative to iPhones and Mac (Petricevic and Verbeke, 2019). Moreover, Samsung, Xiaomi, and Huawei are significant competitors in the Asian market, which aligns with the countries of origin of the corporations, namely China and South Korea (Zhang, 2018). The Chinese market is significant in sales, which is why Apple’s position is less favorable, which is a weakness (Zhao and Zhang, 2022). Moreover, Samsung, Xiaomi, and Huawei offer more products for customers to choose from, differentiating demographics by their economic, social, and technological characteristics compared to Apple (Duhaime, Stimpert, and Chesley, 2012). In this case, Apple has become a more generic brand as it does not offer nuanced technology, creating a competitive disadvantage.
The Strategic Direction : Evaluation of the Competitive Advantage of the Organization
An expansion strategy to a non-traditional market, such as the automotive industry, might give Apple a competitive advantage. Electric cars have become popular and sustainable alternatives to vehicles that operate on fossil fuel. It is essential to mention that Apple has already invested in creating an electric vehicle, which means that the corporation has relevant experience in this sphere. Project Titan has been rumored to be Apple’s take on the new trend in the automobile industry. Yet, no official commentary or direct publication of the corporation’s aim has been presented (Husain, 2022). Therefore, Apple tried to enter the market of electric vehicles, but the first attempt was far from ideal.
Technologies are the most critical part of the electric vehicle, and Apple has relevant experience designing software and hardware. At the same time, Apple would have strong competitors on the market due to certain brands’ technological and intellectual capital. Namely, if Apple were to design an automobile, the strongest competitors would be Testa with the S Model and BMW with i3 (Graham and Brungard, 2021). The biggest competitor would be Tesla, as the corporation only focuses on electric cars. The brand is as recognizable as Apple, and the company’s innovation brought to the automotive industry was and remains unprecedented. However, Apple would have certain competitive advantages in the seemingly complex market due to its specialization in the consumer-friendly interface, while Tesla and BMW focus on automotive technologies.
Apple’s firm-level organizational capital includes the company’s economic advances and investment opportunities, intellectual capital, and experience in the technology business. Apple is the most expensive company in the world and generates profit that is not comparable to Tesla despite both corporations being recognizable (Hasan and Cheung, 2018). The significant popularity and the already established name that consumers are aware of giving the organization a competitive advantage that the main rival, Tesla, does not have. Moreover, it is essential to point out the strategies for selling channels. Tesla’s model differs from those of other automotive corporations. Namely, the consumer can make purchases exclusively in Tesla stores or online (Falát and Holubčík, 2017). Such a significant limitation is a downside for customers who cannot easily access their products in some regions. On the other hand, Apple’s competitive advantage would include the extensive and diverse selling challenges that will give customers more opportunities to test the vehicles, experience them, and, ultimately, invest in the car.
It is also vital to highlight that compared to Tesla, Apple has experience showcasing resilience. It was exemplified in the 2000s when personal computers decreased, and smartphones became the preferred technology for communication and internet browsing (Harris et al., 2020). Apple managed to adapt to the change and became the biggest seller of smartphones, creating the unique product, iPhone. In this case, in case new advancements on the market appear regarding the optimization of electric cars, Apple will likely implement it more efficient and less time-consuming than their rival, Tesla.
Another competitive advantage is Apple’s existing products regarding their integration into the car. Tesla does not produce each individual’s goods and offerings since solar panels are not as widely used in day-to-day life as computers, smartphones, headphones, and tablets. Thus, Apple will have the opportunity to create a personalized automobile to help Apple product owners enjoy using their devices alongside driving a car that is in sync with the other technological advancements. In this case, giving potential consumers such an option is a competitive advantage in the automotive industry and the technological one. Thus, Apple car owners are motivated to purchase devices, and device owners are more likely to invest in the car. Nevertheless, competition is an essential motivation for growth (Raketić and Rašević, 2017). Thus, having rivals and generating or using existing competitive advantages is critical to the brand’s internal and external improvement and development.
Strategic Direction Design
The brand is known for creating technological products that provide comfort and utility to its consumers. In terms of the strategic direction design, the automotive industry falls in line with the current marketplace of Apple. Electric cars are also technological advancements that give drivers the physical and aesthetical pleasure of driving a safe, innovative, and unique vehicle. The strategic direction of creating electric cars is practical regarding the branding of Apple products. They are being presented as more personalized, unique, and creative alternatives to existing offerings provided by other companies. An electric car manufactured by the brand can have a similar vision, implying it is an alternative to the more affordable yet less environmentally friendly, innovative, or unique than cars that operate on fossil fuel.
It is vital to apply the results of PESTEL and SWOT analysis for the company’s subsequent development. Introducing a new product completely different from the ones that Apple produced before is a challenging task that requires balanced decisions. For instance, it is essential to consider the economic and political situation in the target market, analyze the consumer need for electric vehicles produced by Apply, and cooperate on the questions that the company cannot solve without external help from other brands. It is possible to hypothesize that cooperation with a company specializing in the automotive industry like BMW might be effective in this case. Apple might receive support for in-vehicle technologies, and BMW might receive a user-friendly interface for electric cars. The project created by two brands might become more popular among the target audience and have better quality. It makes cooperation one of the best decisions in the company’s strategic development and its brand expansion.
Therefore, Apple does not need to change the direction of its strategic design in market expansion. High-quality of the product, its sustainability, luxurious character, technological innovation, and convenience are the characteristics that Apple promotes in all products of the brand. As a result, the shift from consumer electronics to electric vehicles, which is also part of the technological innovations sphere, might become the logical development of the corporation. For this reason, it is essential for Apple to preserve its values and apply them in the strategic planning of electric vehicles. Apple’s competitive advantage is connected to its relevant experience in the technological sphere and the production of high-quality consumer electronics.
Conclusion
Apple is a multinational corporation with a well-established vision and mission to provide consumer-centered technology. Regarding competitors, placing the brand on the same level as companies such as Samsung is challenging. Despite its mass popularity, Apple has taken a luxury niche, both a downside and a positive aspect of the organization. On the one hand, the prices appeal to the brand since the products are less available and accessible, and one must invest more in a unique product. On the other hand, competitors are advantaged by reaching a broader demographic. The corporation’s innovation, capital, and branding highlight the internal environment’s strengths.
Summing up, working in the sphere of electric vehicles is a challenging task for Apple due to the completely new sphere of work. It is advised that Apple cooperates with other corporations or companies that either have experience in manufacturing electric cars or in researching the necessary technology to achieve the required result. Electric vehicles might allow Apple to generate significant revenue, but they should also be environmentally friendly. Sustainability is already an agenda within Apple’s premises, which makes the strategic development of the company clearer (Apple Inc., 2022). Thus, cooperation with various organizations and fellow manufacturers for the greater good is encouraged. For example, in case the government of a particular country enables the agenda through tax cuts and funding, Apple can collaborate with such countries more extensively. As a result, the strategic direction will improve product awareness and brand availability in some regions of the world and facilitate profit and fulfillment of ethical objectives.
High competition in consumer electronics threatens Apple, mainly because of the prices and number of products manufactured by its rivals. The proposed strategy is to enter a new market with a nuanced product, an electric car. It aligns with the intellectual and economic capital of the corporation, yet competition occurs when it comes to Tesla, a major electric vehicle brand. Tesla has limited selling channels, a less recognizable brand name, and fewer opportunities to invest in innovation. Apple’s branding, existing products that can be integrated into the new idea, and cooperation options provide the organization with a competitive advantage.
A critical reflection highlights that the organization can enter new markets if technology is at the plan’s core. Moreover, one of the most popular brands in the world has a significant advantage of having an existing consumer base and loyalty associated with the offerings. Thus, a recommendation is to pursue expansion by entering the automotive market and implementing their competitive advantages to minimize the limitations of high competition. As a result, the company will acquire more recognition and opportunities to exercise its intellectual, economic, and technological potential and lead through innovation which will delay the decline stage that follows maturity.
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