Apple Inc is a multinational technology company that was founded in 1976 and incorporated a year after, and is headquartered in the United States. The company is renowned for its innovative smartphones and its brand stable includes iPhone, iPad, iPod, Mac, Apple TV, Apple Watch and HomePod in addition to online services such as iCloud and iOS App Store among others (SEC 1). The company has been enjoying prosperity recently with revenues growing to over 229 billion dollars in 2017. Indeed, all its product lines have exhibited growth in revenues and sales as the company continues to introduce new iPhones annually, which are the flagship products of the company (Haslam 1). The United Kingdom is a significant market for the company although in there is significant competition from companies such as Samsung, LG and Nokia. Nonetheless, major opportunities abound in the United Kingdom for Apple, which justifies an enhanced marketing plan focusing on the British market.
Therefore, this report delves into various analyses that would inform the marketing strategy of Apple in the United Kingdom market. To start with, an analysis of the external factors and the industrial structure using PESTLE analysis and the Porter’s five forces model respectively, is undertaken. Thereafter, an interrogation of the strategic position of the company using the SWOT analysis and marketing performance using the Ansoff matrix is performed. Lastly, a consideration of the ethical undertakings of the company is elucidated.
Macro Environment Analysis
The macro environment is influenced by factors that are beyond the direct control of the company although these factors have an effect on the performance of the company currently and in future. Therefore, Apple Inc. should monitor these factors closely and adjust its business strategy accordingly. The PESTLE analysis is undertaken to explain the macro environmental factors that the company has to contend with, which include the political, economic, social, technological, legal and environmental factor.
The political stability and the inter-country relations influence the performance of a company in a given country. In this case, the United Kingdom enjoys political stability and has good relations with its neighboring and other far-flung countries. Being a large and thriving democracy, United Kingdom has a history of maintaining its customs and laws, which makes the business environment in the country predictable. As such, the United Kingdom provides and conducive political environment for the operations of the company therein. For instance, the government of the United Kingdom is focused on making the country a technological giant and hub in the European region. As such, the United Kingdom strives to improve the research and development environment in the country by encouraging tech companies to have a presence therein (Trotman 1). However, the recent exit of the country from the European Union, commonly termed as Brexit, is an indication of the uncertainty and uneasiness of the political relations that the country may be having with European neighbors (Price 1). In addition, the threat of terrorism is alive in the country and may have an impact on the politics of the country, which in turn could affect the operations of the company in the United Kingdom. Further, the push for the exit of Scotland from the United Kingdom as indicated in the closely decided referendum of 2014. In the referendum, Scotland lost the vote to become independent by 55 % against to 45 % for, which is an indication that the United Kingdom may be experiencing some political tension among its constituent countries, which would have an impact on the operations of the company in future.
Economic factors influence the conduct of business in a country because they have an effect of the market and labor in the country, in this case, the United Kingdom is a highly developed economy and a global economic leader as well, which is a position it consolidated after the Second World War. The United Kingdom enjoys financial health and a conducive business environment considering that it is highly ranked for its ease of doing business. The bank of England is mandated to oversee the management of financial system in the country, which includes controlling of interest rates and the stability of the sterling pound because of the effects on international business and the economic prosperity of the country (Price 1). The exit of the United Kingdom from the European Union has economic consequences, which include the influence of the free flow of highly skilled labor that would be required for running the research and development unit located at the country (Trotman 1).
The United Kingdom is a highly developed county whose citizens enjoy a high level of sophistication as well. Because of the high living standards among the British, they are attracted to acquiring technologically advanced gadgets and products because they are able to afford them. As such, the products manufactured by Apple find fanatical following, particularly the youthful section of the British population. however, the aging population in the united kingdom could prove as an undoing to the operations of the company, whose products are popular among the young and youthful members of the British society.
The United Kingdom is famed for its technological advancements in the world. The country has a thriving research and technology atmosphere going by the large number of local and international technological companies that have presence therein. However, the company is experiencing a shortage of technically proficient workforce, a situation that has persisted since 2008 due to the financial crisis. As such, the competitiveness of the United Kingdom is experiencing a looming threat due to continuing decline in the number of specialists in engineers and technicians. Indeed, this situation has been compounded further by the exit of the country from the European Union because of the restrictions that could be placed on the free flow of labor that is skilled and has expertise in the field of information and communication technologies.
The United Kingdom has a highly developed legal environment because its legal system if highly organizes, is transparent and efficient, and the criminal justice system has simple and efficient dispute resolution mechanisms. As such, companies with presence in the United Kingdom are assured of security of their investments, which contributed to the confidence and trust the investors have in the country and legal system. Although the intellectual property rights are protected stringently by the United Kingdom legislation and enforced adequately by the criminal justice system in the country, the number of patent applications has indicated a decline recently. This is indicative of the reducing innovativeness in the country, which could curtail the competitiveness of the United Kingdom even further.
The United Kingdom actively participates in the formulation of environmental policies globally and is a signatory to many of the global treaties aiming at reducing emissions, conserving the environment and developing sustainable sources of energy to reduce the carbon footprints of industrial and business processes in the country. Therefore, the country welcomes any industry or company that would help advance the environmental policies in the country and technological firms such as Apple can contribute to such advancements. The United Kingdom government continues to encourage environmental protection while at the same time advance economic development, which presents a delicate balancing act in the governmental policies.
Industry Structure Analysis
The issues that are manifested at the industry level as the company endeavors to remain attractive and competitive in its industry influence the marketing performance of a company. The Porter’s five forces model is appropriate for the analysis of such issues because it focuses on the bargaining power of the buyers and suppliers, the threats presented by new entrants and substitute products, and the intensity of rivalry among competitors in the industry. Apple Inc. is a tech company that operates across many industries including those that focus of mobile phones, communication equipment, music and video, and software development among others.
Threat of new entrants
New entrants present a real threat to Apple in the United Kingdom. The low barriers of entry into the technology and communication industry make it easy for new companies to establish a foothold in the country. Considering that Apple establishes few but strategically place retail outlets, particularly in areas that have high customer traffic, companies that are able to crowd the market space with retail outlets can easily overshadow the visibility of apple in the United Kingdom marketplace.
Threat of substitute products and services
In the United Kingdom, Apple experiences moderate to strong threats of substitute products and services considering that other international companies operate in the industry segments in which the company operated in as well. The emergence of alternative and counterfeit products that are priced lowly, particularly from emerging and industrializing countries such as China present real threats to the operations of Apple in the United Kingdom.
Bargaining power of buyers
The buyers of Apple products have little bargaining power as the company rather that the customers set the prices of the products presented by the company. In addition, the buyers are unable to negotiate collectively with the company, which weakens their bargaining power. In addition, although large retailers such as Walmart and network providers such as Vodaphone are able to buy large inventories and avail them to buyers from their retail outlets, Apple has highly impressionable retail outlets that undo the influence of other retailers in the United Kingdom and even global market.
Bargaining power of suppliers
The bargaining power of suppliers range from moderate to high because a limited group of multinational companies supply the industry with the components and parts for their technological gadgets such as mobile phones, computers and other mobile devices. Although the large number of manufacturers of mobile phones and other similar devices exist, and their influence on the market may be substantial, the in-house manufacturing undertaken by Apple provides it with the ability to reduce the power of suppliers in the industry.
Intensity of rivalry among competitors
The intensity of rivalry among the competitors in the industry ranges from moderate to high (Khan, Alam and Alam 959). Although the main industry players are few, including Nokia and Samsung, the rivalry between them is fierce as each company strives to become a market leader by expanding its global presence including that in the United Kingdom.
Strategic Position Analysis
The strategic positioning of a company can be evaluated using the SWOT analysis as the analytical tool. In this case, the strengths and weakness of the internal factors of the company are analyzed against the opportunities and the threats of the external factors facing the company.
The company commands a robust innovation position particularly for its mobile devices and especially the iPhone. The durability and ease of use makes Apple products command a respectable position in the marketplace. In addition, Apple is able to combine horizontal and vertical integration in its operations, which enables it to avail products that enjoy exclusivity in the British and global markets (Yoffie and Baldwin 2). In addition, the company has an elaborate presentation of new products as well as an outstanding customer experience at its retail outlets, which has contributed to the loyalty that clients display for the products of the company (Heracleous 93).
The pricing strategy employed by Apple Inc may be making the company’s product uncompetitive in the market. Specifically, Apple prices its product highly as the company targets the high-end market. However, many willing buyers are unable to afford the products of the company, making the company miss a substantial segment of the market. In addition, the revenues of the company are heavily dependent on the sales of its iPhone and iPad (Khan, Alam and Alam 957). As such, any decline on the sale of these products would endanger the sustainability and survivability of the company.
The opportunities of Apple in the United Kingdom lie in the establishment of a research and development facility in the kingdom (Trotman 1). A research and development presence in the United Kingdom would invigorate market research activities therein, which would help the company develop new products that are informed by the British market, which is a significant global market that drives global trends in technology (Khan, Alam and Alam 959). In addition, capturing the British market may launch the penetration of the company into other commonwealth countries that look up to Britain for inspiration for the products to accept and embrace.
The inability to access highly skilled technical labor is a major threat of the success of Apple in the United Kingdom, particularly due to the withdrawal from the European Union, which could stifle the flow of skilled labor into the kingdom. In addition, economic downturns would erode the purchasing power of customers, which in turn would make the loyal customers of the company consider switching to competitors such as Samsung who offer products at a lower price.
The Ansoff matrix is an appropriate tool for analyzing the marketing strategy of Apple in the United Kingdom that would facilitate the growth of the company in the kingdom in future. The Ansoff matrix enables the comparison of current and new products with the United Kingdom market, which facilitates the choosing of the right marketing approach for its products in the United Kingdom market. The Ansoff matrix comprises of four components that combine products and markets, which include market penetration, market development, product development and diversification.
Apple could improve its penetration into the British market by offering it products that have been developed in the kingdom. Considering that the British are very loyal to their homegrown products, Apple would improve its market penetration by undertaking more innovation of products or refining of existing products to make them conform to the British customs and preferences, especially considering that the United Kingdom has different electrical standards compared to other markets such as the United States.
This strategy involves expansion into new markets with the same products offering. In this case, Apple could target a different customer segment such as the industrial clients other than the young and the affluent individuals. The company’s rich technology can be leveraged to supply information technology equipment such as iMac laptops that are targeted to the industrial users such as design houses, which are based in the United Kingdom.
Apple could venture into creating new products and services that are customized to the British and indeed the European market, considering that the United Kingdom is a gateway into Europe. In this case, acquisition of technology firms that are based in the United Kingdom would help augment the technological capabilities of the company and help it develop new products aimed at the British market. It would also advance the company’s progression towards convergent technologies (Heracleous 92).
This strategy requires the combination of market and product developments in order to introduce new products into new markets. In this case, Apple count enhance its vertical integration in the United Kingdom by working alongside other British companies that would make accessories that would be used together with the products that the company offers such as headphones, chargers, speakers and other related products (Heracleous 94).
Corporate Social Responsibility Practices
Although Apple had not corporate social responsibilities during the leadership of Steve Jobs, the company has since undertaken various CSR initiatives thereafter (Khan, Alam and Alam 962). Considering that the company outsources many of its manufacturing processes and the making of certain components for its products, the company has been confronted with labor related issues and issues regarding the manufacturing processes as well, forcing it to implement a supplier code of conduct back in 2005 and releasing supplier responsibility reports in 2007 as well. To display its commitment to ethical practices, Apple support local communities in its areas of manufacturing through the Global Volunteer Program. In addition, the company offers education, training and development programs as part it its employee benefits, particularly in factories that manufacture the company’s products. The company has also improved its working conditions by implementing changes at the workstations of its employees following an ergonomics research. The company also embraces employee diversity by being sensitive to gender balance and providing employment opportunities to minority groups as well. Furthermore, the company engages in the utilization of environmental conservation practices such as using renewable energy in its data centers worldwide.
Apple Inc. is a renowned brand that has significant presence in the United Kingdom. The United Kingdom remains a potential market to the company considering it comprises of four nations and is advantaged geographically for its proximity to Western Europe, this makes it a possible hub to the European market. The expansion of the research and development activities into the British market would help the company serve the British market better with customized products while leveraging the highly skilled labor in the country. However, the country should be alive to the challenges that might be presented by the exit of the United Kingdom from the European Union and possible cessation of Scotland in future.
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Heracleous, Loizos. “Quantum strategy at Apple Inc.” Organizational Dynamics, vol. 42, no .2, 2013, pp. 92-99.
Khan, Usman Ali, Mohammd Noor Alam, and Shabbir Alam. “A Critical Analysis of Internal and External Environment of Apple Inc.” International Journal of Economics, Commerce and Management, vol. 3, no. 6, 2015, pp. 955-961.
Price, Rob. “Apple has quietly bumped up the prices for loads of its products in the UK after Brexit.” Business Insider, 8 September 2016,
SEC. “Form 10-k, Apple Inc.” Securities and Exchange Commission, 26 September 2015.
Trotman, Andrew. “Apple to open research and development center in Cambridge.” The Telegraph, 10 November 2014, http://www.telegraph.co.uk/technology/apple/11221574/Apple-to-open-research-and-development-centre-in-Cambridge.html Accessed 12 December 2017
Yoffie, David B. and Eric Baldwin. “Apple Inc, in 2015.” Harvard Business School, 28 May 2015,
https://edisciplinas.usp.br/pluginfile.php/3864003/mod_resource/content/0/715456-PDF-ENG.pdf Accessed 12 December 2017
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