Introduction

In the face of fierce competition and a rapidly changing external environment, companies

should pay close attention not only to improving their products, but also to their position in the mar-

ket. The development of technologies and means of communication, changing consumer needs, ac-

celerated environmental change, as well as a number of other reasons have led to a sharp increase in

the importance of strategic management. However, strategic management is not feasible without a

pre-developed strategy. A properly developed strategy affects the success of the enterprise, allows

new companies to develop a niche, and market leaders to maintain their dominant positions.

The purpose of this work is to develop recommendations for choosing a strategy and further

development of Apple based on strategic analysis. To achieve this goal, it is necessary to perform

the following tasks:

1. Give a brief overview of the company’s activities, define its main goals and mission;

2. Perform an analysis of the external environment using PEST analysis technology;

3. Explore the internal strengths and weaknesses of the organization, as well as opportuni-

ties and threats, using SWOT analysis;

4. Using the BCG matrix to investigate the position of individual products of the company

on the market;

5. Develop effective intervention strategies and provide recommendations for short-,

medium- and long-term actions.

6. Systematize and summarize the information received, draw conclusions.

Analysis of the company’s external environment

Apple is an American corporation founded in April 1976 by Steve Wozniak, Steve Jobs and

Ronald Wayne. The company specializes in the production of personal and tablet computers, audio

players, smartphones and software (Linzmayer, 2004).

The final consumer of the products and services of the selected organization are all users of

electronic devices: entrepreneurs, businessmen, schoolchildren, students, working population.

 The industry in which the company operates is electronics, information technology, software

development. The target audience is the whole world, students, teachers, creative professionals. The

key indicators that the company aims to achieve in the future are computers of the highest quality

for people all over the world. Accordingly, the geographical distribution of production is the whole

world.

The main goal of Apple’s management strategy is to ensure sustainable development and

obtain stable profits. To achieve this goal, the company develops the following areas:

• improving the trading and production activities of the enterprise;

• ensuring the profitability of product sales;

• mastering new technical solutions in trade and production activities (O’Grady, 2008).

PEST analysis was applied to assess the external environment, the process of which is pre-

sented in Table 1.

Table 1. Summary matrix of PEST analysis, reflecting the degree of influence of environ-

mental factors on the activities of Apple

Based on the source: Green (2023)

Political Economic
Factor Value Factor Value
Stability of the political situation 0.23 Unemployment rate, amount and condi- 0.26
tions of remuneration
The probability of the development 0.17 The level of disposable income of the 0.19
of hostilities population
Tax policy 0.09 Inflation rate and interest rates 0.07
Future and current legislation 0.07 Exchange rates of major currencies 0.06
Trends towards regulation or 0.06
deregulation of the industry
Social Technological
Factor Value Factor Value
Attitude to imported goods and 0.19 Degree of use, implementation and 0.15
services transfer of technologies
 Attitude to natural and environ- 0.16 The level of innovation and technologi- 0.13
mentally friendly products cal development of the industry

Globalization 0.13 Access to the latest technologies 0.12

Lifestyle and consumption habits 0.11
Sex and age structure of the popu- 0.08
lation and life expectancy

In the conditions of the economic crisis provoked by the pandemic, the unemployment rate

is rising, and the real incomes of the population are declining. Since the products of the company in

question are quite expensive, they can be considered as a luxury product. As a result, during a diffi -

cult financial situation, most of the population will give preference to essential purchases rather

than purchasing a luxury item. If the purchase of equipment becomes a necessity, then it is likely

that buyers will choose a cheaper option. In such circumstances, the company should improve the

loyalty program for regular customers and attract a new audience through special promotions and a

wide advertising campaign (Podolny, and Hansen, 2020).

The SWOT analysis methodology implementing this study is presented in Table 2. The re-

sults of the analysis can be seen at the intersection of the fields.

Table 2. Summary matrix of Apple’s SWOT analysis

Opportunities Threats
Obtaining patents through ac- Rapid development of technol-
quisition; ogy;
Development of antivirus soft- Development of services for
ware; downloading free music;
Improving relationships with Development of cheaper ana-
customers and suppliers; logues of the company’s prod-
Creating a loyalty system for ucts;
regular customers; Increased competition in the
Conducting a large-scale ad- personal computer market;
vertising campaign. Decline in purchasing power.

Strengths Strengths and Opportunities Strengths and Threats

 The company occupies a sepa- Since the brand is world-fa- 1. The development of services
rate niche in the industry and mous and has a good reputation for downloading free music
has no direct competitors (in among buyers, conducting ad- will put the income from the
terms of price); vertising campaigns and creat- iTunes Music Store at risk.
The company is a leading com- ing a loyalty system for regular 2. Since the company “sets the
pany in the industry, an author- customers will allow you to tone” in the world of mobile
ity in the field of IT; bring relations with the cus- technologies, smaller compa-
Global brand awareness, its tomer base to a new level, sig- nies are equal to it. Therefore,
brand and prestige; nificantly improve them, in- there is a possibility of the ap-
High level of development of crease sales. Web technologies pearance of similar products at
research work and web tech- can be used to raise awareness a lower price.
nologies; about the product.
Strong marketing;
Highly qualified personnel.

Weaknesses Weaknesses and Opportuni- Weaknesses and Threats

ties
Short product life cycle; Obtaining patents through ac- 1. Rapid development of tech-
Incompatibility with other op- quisitions and improvement of nologies leads to obsolescence
erating systems; existing software (by adding an of products;
High price; antivirus) will allow a com- 2. The economic situation in
A small share in the personal pany to create their own unique the world can affect the pur-
computer market. operating system that will not chasing power of the popula-
require compatibility with tion, as a result of which the
other operating systems. high price of products will be-
come a significant factor in the
purchase.

Thus, the company has a fairly large number of strengths, which gives it a competitive ad-

vantage in many segments. The organization should pay close attention to the personal computer

market, since Mac occupies a small market share, competition is high.

An important advantage is the complete absence of substitute goods. The closeness of the

system, which entails complete incompatibility with other operating systems, occupies a controver-

sial position. On the one hand, this is what makes the product unique. In addition, the official store

provides a wide range of software, including on a non-commercial basis. But on the other hand, the

connection with Intel and Microsoft could bring the demand for the company’s products to a new

level (Tien, 2019).

BCG Matrix
 The main objective of the BCG model is to determine priorities in the development of the

company’s assortment units, identify key areas for future investments.

The initial data for the analysis were taken from the consolidated financial statements pub -

lished on the official website of the company in question. The Accessories product group includes:

AirPods, Apple TV, Apple Watch, HomePod and iPod touch. “Services” are various platforms that

the company produces: App Store, Apple Music, Apple Fitness, Apple Pay, AppleCare, as well as

cloud storage (Chung, Seo, and Song, 2023).

Table 3. Calculation of the initial data for the construction of the BCG matrix

Based on the source: Khalid, and Viktoria (2023)

Group Sales vol- Compari- Growth Brand Key com- Relative

ume, mil- son of rate market petitor’s market
lions of sales vol- share in market share
dollars ume, % the seg- share
ment
2021 2022
iPhone 142381 137781 97 -3% 14% 22% 0,64
Mac 25740 28622 111 11% 10% 24% 0,41
iPad 21280 23724 111 11% 29% 20% 1,47
Acces- 24482 30620 125 25% 43% 14% 3,17
sories
Services 46291 53768 116 16% 44% 56% 0,79
Total 260174 274515

As we can see, sales of the company’s most profitable product – the iPhone – fell compared

to last year, and therefore, according to the results of 2022, smartphones fell into the category of

“Dogs”. This is due to the fact that sales of the release this year were delayed, in addition, the eco -

nomic situation in the world significantly affects the purchasing power of the population. In fact,

smartphones belong to the category of “Stars”, as they occupy almost a fifth of the segment, annu-

ally attract the attention of consumers. This product requires significant investments to move into
the category of “Cash cows” and bring stable, high income in the future. In addition, as you can see

from the statistics, Apple has serious competition in this segment. According to analysts’ forecasts,

in the next 5 years the company may be forced out of this niche. Therefore, she should pay close at-

tention to this problem when drawing up a strategy for the next year.

Additionally, we would like to note that iTunes (a component of the “services” product

group) can already be attributed to this category, since at the moment the costs of maintaining posi-

tions in the market are much lower than the profit received; the market share is 82%.

The company should think about the Mac product category, as it is rapidly moving to

“Dogs”: the market share is much smaller than that of competitors, and investments are large. It is

necessary either to close the production of these goods, or to reconsider the approach: repositioning

and improvement will allow you to take a leading position in the market and become a “Cash cow”.

It is also worth noting that the release of wireless headphones and a new generation of

watches was marked by success, as these groups of products managed to get into the “Stars” cate-

gory, bypassing “Question Marks”. The market share at the moment is almost half. In order to

maintain a leading position and high profits, it is necessary to maintain the existing situation by re-

leasing updates, but significant investments are no longer required.

Table 4. Growth rate and relative market share according to the BKG matrix of Apple

Name Sales volume Name Sales volume

High Question marks Stars
(more than 10%) Mac 28 622 Accessories 30 620
Services 53 768 iPad 23 724
Total 82 390 Total 54 344
Low Dogs Cash cows
(less than 10%) iPhone 137 781
Total 137 781

Overall, the portfolio balance is satisfactory. It is necessary to work to ensure that popular

products bring passive income without requiring constant investments. As can be seen from the
summary matrix (Table 4), the results of the past year are not comforting. Despite the fact that total

sales for the year increased by 11% compared to 2021, and the total profit amounted to 59.685 bil-

lion dollars, there are no products of the “Cash cows” category. Consequently, there are no obvious

sources of financing for problematic products at the moment. The most demanding investments are

the products included in the “accessories” and “services” group. Tablet computers, headphones,

watches and various services only require maintaining their positions, which are currently quite sta-

ble.

Suggested recommendations

To stay ahead of its competitors, the company needs to focus on one of three strategies.

1. Cost leadership.

The main idea: All actions and decisions of the enterprise should be aimed at reducing costs.

The enterprises with the lowest costs get the most profit.

2. Differentiation.

The manufacturer’s attempt to achieve consumers’ perception of their goods and services as

unique, for which the organization uses advertising extensively, gives its products distinctive char-

acteristics, provides exceptionally high quality service, uses new technologies.

3. Focusing.

The idea is to select a certain segment in the industry and target it exclusively, so that this

particular group of buyers distinguishes the company from competitors.

“Apple” has focused on 2 strategies – leadership in the field of advertising.

Conclusion

As a result of the analysis, which included the analysis of the competitive environment,

PEST analysis, SWOT analysis and the BCG matrix, the current position of the company in the

market was established, as well as the advantages and disadvantages of the chosen management

policy.
 The company should adhere to a strategy of concentrated growth: to develop and improve

the existing product, to improve and strengthen its position in the market. In addition, according to

the results of three analyses, some problems were identified, on the basis of which recommenda -

tions were developed.

The economic crisis caused by the situation in the world affected the purchasing power of

the population, as a result of which sales of the most profitable product – the iPhone – fell. In this

connection, the company should reconsider its pricing policy and develop a loyalty program. This

will help you stay afloat even in difficult times.

In the segment of personal computers, the company has a small share and does not have a

competitive advantage. Mac requires significant investment and repositioning. Or you should ex-

clude this category of goods from the product range, since at the moment investments in Mac do not

bring the expected profit.

Also, the company is recommended to work on the development of antivirus software and

develop its own operating system. This will allow you to move the “services” product group to the

“Cash cows” category, in addition, it will eliminate some weaknesses.

A clear advantage that gives a competitive advantage in general in all market segments is the

attitude of consumers. The trust of customers, as well as the high status attributed to the brand, al-

lows the company to maintain its pricing policy for many years. However, the current situation

should be treated with caution, not to let down the expectations of customers, to maintain the situa-

tion by introducing innovations.

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