This paper focuses on one of the largest and most successful organizations of the modern days – Apple Inc. The legendary story of its creation and rise still serves as the example for many aspiring business people. The discussion below includes the products and services provided by Apple, the organizational external environment, stakeholders, and corporate social responsibility.
Nature, Structure, and Types of Products and Services of Apple
Apple Inc. as a company began its existence in the middle of the 1970s when Steve Jobs and Steve Wozniak initiated this business and built their first Apple computer (Johnson, Li, Phan, Singer, & Trinh, 2012). Apple’s personal expression of the nature, structure, and type of their products and services is formulated in their annual report and is the following: “designing, manufacturing and marketing mobile communication and media devices, personal computers, and portable digital music players and sells a variety of related software, services” (Johnson et al., 2012, p. 5).
In other words, the company is focused on the production of the computer and digital software and hardware, marketing it, and providing maintenance and support services. As explained by Reuters’ profile of Apple Inc., some of their most significant products include mobile devices such as iPhone and iPad, personal desktop and portable computing devices such as Mac, music and medial players such as iPod, serviced that organize and digital files (audio and video) such as iTunes application, a variety of other applications for different purposes (among them – App Store, where all the applications can be accessed), iOS operation system installed on all the Apple devices, and a cloud service called iCloud for storing files (Apple Inc (AAPL.O), 2016).
Using a variety of their products, Apple has created something that can be likened to an ecosystem where everything is interconnected and the use of one Apple device leads to the use of another. For instance, the users of iPhones and iPads will inevitably be using iOS, App Store, and iTunes as well. The self-sufficient structure of the Apple’s set of products ensures that all of them are popularized in this network. This approach is a smart generation of profit as Apple produces the devices, provides software, offers maintenance and support thus taking over all the possible spheres of the consumers’ life and fulfills many of their potential needs without letting the buyers’ money go to the other competitors.
Two Key Factors in the Organization’s External Environment that Can Affect Its Success
In the organization’s external environment, there are two key factors that can and do affect its success on a daily basis; they are technological and demographic factors.
The technological factor represents the computer hardware and software manufacturing industry. The correlation between Apple’s success and the development of the industry is rather simple. Practically, the faster the industry progresses in terms of the emergence of never, more advanced, and cheaper technological solutions – the stronger Apple’s competition will become (Johnson et al., 2012). As a result, due to the appearance of better products, Apple would have to respond and either lower its prices or step up their game and come up with a product superior to the ones that already exist.
These are the responses any business needs to provide in order to remain at the top of the competition. Besides, the changes may occur due to the appearance of new industry segments (such as the development of new devices) and because of the shifts within the existing ones. For instance, one such change appeared in 2012 when the popularity of PCs dropped and that of tablets and smartphones grew due to the shift in the consumers’ preferences (Johnson et al., 2012).
The demographic factor is represented by the population of the consumers. Since the beginning of the 2000s, the use of the Internet increased dramatically and so did the need for PCs (Johnson et al., 2012). However, while 15 years go the major consumer segment was comprised of the generation X representatives, the contemporary consumer base mainly includes the Millennials (Johnson et al., 2012). Accordingly, the number of purchased devices, and their type changed significantly as the younger generation preferred smaller and lighter devices such as tablets and smartphones.
Five Ways in which the Primary Stakeholders Can Influence the Organization’s Financial Performance
Apple’s organizational performance can be affected by multiple groups of stakeholders. Some of the most important stakeholders of Apple are its workers, consumers, other corporations, governments, and subcontractors (Myers & Fellow, 2013).
Each of these groups of stakeholders has the capacity to affect the financial performance of the company. For instance, the effects produced by the consumers and the shifts in their preferences have been discussed in the previous section. Any change in the tastes or choices of the buyers is able to produce an effect on the company’s revenue-maximizing it in the case of Apple’s products’ popularity growth, and minimizing it some other products distract the consumers. Besides, other companies may either attract Apple’s clients and thus cause decrease in Apple’s income, or disappoint their clients making them shift to the competitors increasing Apple’s income.
The governments may implement policies restricting the import of Apple’s products or making in more costly to trade and thus affecting the company’s expenditures. Subcontractors are chosen based on the cost of their labor, the subcontractors who require more resources would be more costly; however, they are likely to bring more sustainability and fewer CSR risks (such as illegal employment, child labor, and workplace hazards). Finally, the workers represent the internal environment of the company. Their job satisfaction is based on a multitude of factors and their treatment defines the company’s reputation as an organization, which reflects the number of consumers, trust of investors, and translates into income.
One Controversial Corporate Social Responsibility Concern Associated with Apple
As pointed out by Aula and Heinonen (2015), the constantly growing value chain of Apple is one of the main issues when it comes to corporate social responsibility. Namely, having to reduce their production costs, Apple, just like many other large corporations, engages the subcontractors from the countries where labor cost is lower. However, under such circumstances, the large corporation becomes responsible for whatever human rights violations may exist in the subcontractor workplaces. For example, the subcontractor may underpay the workers who assemble iPhones, employ children, or fail to maintain safe work conditions; in particular, Apple’s subcontract in China, Pegatron was known for pushing excessive workloads and hours on the underpaid employees (Aula & Heinonen, 2015).
Apple is a large corporation known worldwide. It has massive revenues and strong brand image. However, its business is impacted by a variety of internal and external factors. Apple needs to manage all of these influences daily in order to stay on top of the competition. This is a challenging task because many factors develop spontaneously and are not under the company’s control.
Apple Inc (AAPL.O). (2016).
Aula, P. & Heinonen, J. (2015). The Reputable Firm: How Digitalization of Communication Is Revolutionizing Reputation Management. New York, NY: Springer.
Johnson, K., Li, Y., Phan, H., Singer, J., & Trinh, H. (2012). The Innovative Success that is Apple, Inc. Theses, Dissertations and Capstones. Paper 418, 1-43.
Myers, C. & Fellow, K. (2013). Corporate Social Responsibility in the Consumer Electronics Industry: A Case Study of Apple Inc.