Apple Inc.: External and Internal Environments


The internal environment identifies the company’s information elements, which are frequently fundamental. On the other hand, an external atmosphere is a group of characteristics that are not directly related to the company. For businesses to be successful in their markets, they need to consider their own competitive advantages, strengths, and weaknesses. The purpose of this paper is to study and analyze the environment of Apple Inc., including the two segments of the general climate, competition forces, and some other factors.

General Environment

Apple Inc. is a multinational and extremely popular technology firm that produces smartphones, computers, software applications, and some other electronic goods. It may be rather insightful to discover all external and internal aspects that possibly impact the company’s success and determine the amount of risk that environmental variables provide. Concerning Apple, it is possible to suggest that the two segments of the general environment that would rank highest in their influence on the company are economic and sociocultural.

Sociocultural Segment

It is possible to suggest that all firms that want to be successful need to consider this segment. As stated by Hitt et al. (2020), “the sociocultural segment is concerned with a society’s attitudes and cultural values,” and in the case of Apple, one may agree that the company addresses this element quite effectively (p. 50). For instance, the previous year was marked by Apple’s “new Racial Equity and Justice Initiative projects,” and the company committed $100 million from its budget to help communities of color and eliminate numerous barriers they face (Apple Press Release, 2021, para. 1). Since this is an issue of major concern, society appreciates the efforts of Apple, and the image of the company becomes stronger. Further, Apple as a brand itself has become a part of the culture, so many clients choose to buy iPhones or MacBooks primarily in order to follow the set trends. Consequently, this is quite beneficial for the company, and the number of its customers is growing significantly.

Economic Segment

Personal wealth, inflation, and borrowing costs are all factors that affect Apple’s activities. As noticed by Hitt et al. (2020), “the economic environment refers to the nature and direction of the economy in which a firm competes or may compete” (p. 48). Unfortunately, the way the economic segment affects the company is not only positive but also negative (Hitt et al., 2020). With the increasing inflation rates and the general financial situation in the world, most people prefer to either purchase mobile goods from cheaper technology firms or refuse to replace their smartphones with a newer model in the nearest future. As for the positive factor, it is possible to say that Apple manages to enter developing countries’ markets. For instance, Rai (2022) mentions that, despite the public’s expectations, Apple in India “took in an estimated $2.09 billion for the quarter, edging aside Samsung with revenue of about $2 billion” (para. 3). This is indeed a success and a valuable chance for Apple to win the Indian market.

Forces of Competition

To counteract the effects of external forces revealed in the Five Forces of competition, Apple must build suitable countermeasures. The company’s resilience is influenced by its ability to handle these challenges strategically. It is possible to say that, out of the Five Forces, the two that affect the firm most are the competitive rivalry and the bargaining power of buyers (Hitt et al., 2020). Overall, while the company is quite effective in these two areas, there are still some threats that Apple needs to consider.

Competitive Rivalry

It is challenging for Apple to remain competitive enough to resist other firms like Samsung, Asus, Microsoft, or Xiaomi. The mentioned companies are also brilliant manufacturers that offer high-quality goods and are popular among people. What is more, Hitt et al. (2020) state that low differentiation of products makes it difficult for businesses to have competitive advantages, which is true for Apple. Overall, all products and services offered by the aforementioned companies are similar, and together with the low switching costs, these two factors allow clients to choose freely between the companies.

The Bargaining Power of Buyers

Further, the bargaining power of clients is another strong force that can have a severe impact on the firm. Hitt et al. (2020) believe that “to reduce their costs, buyers bargain for higher quality, greater levels of service, and lower prices” (p. 60). Overall, they have bargaining power if “they could switch to another product at little, if any, cost” or “the sales of the product being purchased account for a significant portion of the seller’s annual revenues” (Hitt et al., 2020, p. 60). As mentioned above, in the case of Apple, people can change brands easily due to the low switching costs. What is more, customers have comparative information regarding companies and can make informed decisions. As for the clients’ power to influence the sales, while an individual’s purchase is insignificant for Apple, the company loses a major part of its profit if many customers decide to switch brands.

Future Improvements

It is recommended for Apple to consider the forces mentioned above to make sure that the firm’s performance will not be reduced. First of all, it is possible to introduce more supportive measures to address the issues of minorities, win respect and love of people, and become known as a company that cares about humans (Hitt et al., 2020). Further, Apple should consider entering other developing countries to expand its operations.

External Threats and Opportunities

Apple’s foundational external threats are the app store fees litigation and consumers’ changing habits and needs. One may agree that the competition with other successful companies is the most serious threat since Samsung and other firms manage to be as high-quality and famous. To deal with this threat, the corporation needs to secure its operations, avoid leaking information that competitors can take advantage of, and improve its products and services. As for opportunities, they include partnering to produce autonomous vehicles and focusing on entering markets in other countries, with virtual and augmented reality devices and applications being the greatest (Aten, 2019). Apple needs to consider that future customers will not be satisfied with the current smartphones, and allowing them to access virtual reality is a major opportunity.

Strengths and Weaknesses

Apple’s greatest internal strengths are its reputation, ecosystem of goods, constant growth, and positive culture. To take maximum advantage of its strengths, Apple needs to further capitalize on the market and focus on the needs of its clients, as well as invest in protective initiatives. As for the company’s weaknesses, they are the relative lack of innovation and a declining share of the global smartphone market (Richter, 2021). Thus, a tactic to address these weaknesses will focus on the careful evaluation of the trends among the clients and specific predictions regarding the market’s future.

Resources, Capabilities, and Core Competencies

Apple’s resources and valuable competencies include a strong brand image, a growing portfolio of various products, loyal and talented workers, effective software and devices’ functionality, customer focus, and strong financials. All these factors contribute greatly to the proper development and success of the company. Brand image and care for the clients’ needs allow for increasing customer trust and satisfaction, while an extended portfolio, efficient functionality, and strong financial system make the company more competitive.


Apple Press Release. (2021). Apple launches major new Racial Equity and Justice Initiative projects to challenge systemic racism, advance racial equity nationwide. Apple.

Aten, J. (2019). The most incredible gadget Apple plans to introduce this fall is something you never saw coming. Inc.

Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2020). Strategic management: Concepts and cases: Competitiveness and globalization. Cengage Learning.

Rai, S. (2022). Apple makes progress in India as iPhone sales rise 34% to record. Bloomberg.

Richter, F. (2021). Have we passed the peak of the smartphone era? World Economic Forum.

Find out your order's cost