business policy and strategy final assignment

18

Milestone Activity: Apple Inc.

November 9, 2025

Milestone Activity: Apple Inc.

Part 1: BCG Analysis

The Boston Consulting Group (BCG) Matrix is a business management tool used to assess a company's portfolio of products or services in terms of market expansion and market share (Kennedy et al., 2020). In the case of Apple Inc., a major global consumer electronics and digital services company, the BCG model helps evaluate the contributions of various business segments to its success and identify areas where it needs to invest to achieve its goals.

iPhone - Star

The iPhone remains the focal point of Apple's business model and corporate identity. It is the company's largest revenue generator, comprising over 51% of total revenue each year in 2024 (Curry, 2025). The iPhone is in a dynamic, high-growth segment with rapidly evolving innovation characteristics and fierce competition, with users constantly demanding new and improved technology. This combination of hardware, software, and services, particularly the iOS ecosystem, has allowed Apple to maintain market share in the high-end smartphone component of the overall market. For the ongoing growth of iPhone sales, it is justified to invest in the iPhone line since the number of customers acquiring smartphones in the emerging markets continues to grow, and Apple is the leader in AI. Further investment in R&D will help Apple maintain its position as a “Star” by releasing new model versions, a more powerful processor, and broader ecosystem integration.

MacBook - Cash Cow

The MacBook line, including the Air and Pro, has been a "Cash Cow" in Apple's lineup. While the personal computing market has not been growing as much as smartphones, Apple retains a consistent and profitable market share based on its reputation for perfect design and performance, and user experience. The move to Apple Silicon (M1, M2, and M3 chip-processors) has improved the margins and ultimately reliance on other vendors (Liao et al., 2022). Even in an environment of decelerating growth, there will always be operational efficiencies that Apple has built into its model scale and its large base of customers who are purchasing products or services regularly. Therefore, the company may continue to devote a fair amount of time to product sustainability and operating system updates, but it just makes more business sense for those profits to go toward high-growth areas of wearables and services.

Apple Watch - Question Mark

Apple Watch controls 25% of the worldwide smartwatch market share, but its long-term development opportunities are uncertain (Statista & Counterpoint Research, 2025). Even though wearables have been growing, the reliance of the segment on the iPhone to be fully functioning restricts its dependence and addressable market. However, there is a growth potential in health monitoring, fitness tracking, and wellness innovations. As long as Apple can enhance the appeal of its smartwatch by leveraging improved health diagnostics and AI-enhanced capabilities, it can transform this "Question Mark" into a "Star". In the meantime, it is recommended to invest selectively in health partnerships, R&D, and market expansion in the regions.

Apple TV+ - Dog

Apple TV+, launched in 2019 and surrounded by many competitors like Netflix, Disney+, and Amazon Prime Video, is a streaming service where original content has been favored in critics' ratings and awards. Since that time, Apple TV+ is still one of the lesser-known platforms in terms of subscriber base, regardless of how it fared against other streaming platforms in critical reception. Its small content library and inability to scale place it in the "Dog" category. While the service furthers Apple's ecosystem, it is unprofitable because of high production costs and no competition (Canal, 2025). Apple could also explore joint ventures or combination partnerships where Apple TV+ can be included in Apple One bundles to help retain customers without incurring significant expenditures on original content.

Summary

According to the BCG analysis, Apple should strongly invest in the iPhone (Star), continue investing in the MacBook line (Cash Cow), selectively invest in the Apple Watch (Question Mark), and review its approach to Apple TV+ (Dog). Such a moderated strategy allows Apple to enjoy stability in its revenue streams and be prepared to grow in the future through the use of innovations.

Part 2: SWOT Analysis

Internal Analysis

What is the company’s primary strategy, and is it working well?

The most important strategy that has helped Apple achieve its success, even today, is product differentiation, innovation, and integration within its ecosystems. The production of high-quality products with valuable usability, combined with a smooth software ecosystem, fosters customer loyalty and superior brand positioning for Apple (Qiu, 2022). This strategy has yet to bear fruit fully: Apple has become one of the wealthiest companies in the world, generating impressive profits and growing its market capitalization, which now stands at a staggering $3 trillion as of 2024. The plan is, in fact, paying off, as Apple utilizes emotional branding and technological advantage to create exclusive value propositions that are difficult for its competitors to replicate.

What are the company’s strategic resources and capabilities (consider VRIO)?

Under the VRIO framework, Apple possesses valuable resources and capabilities that are unique, hard to imitate, and competently designed to add value (Newton, 2021). The core assets include high brand equity, a combination of hardware and software, and an unmatched global supply chain network. The fact that it can create its own chip (Apple Silicon) and its various systems (iPhone, Mac, iPad, Watch, etc.) contributes to Apple's competitive advantage. The recruitment of the most talented staff and the frequency of innovations also improve the company's resource foundation. These competencies are difficult for competitors to replicate, thus giving Apple a long-term sustainable edge.

Has the company recently shown an ability to innovate, pivot, or adapt

The development of digital diversification (Apple Music, iCloud, Apple Pay, and Fitness+) and the focus on the world of augmented reality and AI have made Apple even more adaptable. Apple demonstrates its continued interest in experimenting with new technologies with the introduction of the Apple Vision Pro, a mixed-reality headset (Apple, 2023). In addition, the Apple Silicon conversion has been a significant shift in the technology field, aimed at increasing performance efficiency and reducing dependency on external factors, which suggests the likelihood of Apple becoming innovative and adaptable to industry shifts.

Are the company’s prices and costs competitive?

The Apple company has a premium pricing model that is concentrated on quality, design, and exclusivity. Despite being relatively expensive compared to most of its competitors, Apple's competitiveness in terms of cost has been enhanced by high customer retention, economies of scale, and an efficient global supply chain. Consumers perceive Apple products as being sold at a low price because they are durable, integrated with software, and offer comprehensive after-sales services (Qiu, 2022). Thus, Apple remains a company that guarantees a competitive edge as it supports premium prices with perceived and actual value.

Is the company competitively stronger or weaker than its competitors?

The Apple company has one of the most competitive positions in the technological world. Its brand worth, innovation dominance, and profitability are higher compared to its competitors, such as Samsung, Google, and Huawei (Qiu, 2022). The integration of hardware, software, and services is a switching cost that centralizes customer retention and disarms the market share of competitors. Therefore, Apple is a highly competitive corporation compared to most of the largest operators in the market.

What strategic issues and problems merit front-burner managerial attention?

However, Apple cannot escape numerous difficulties, despite its success. The sales of iPhones in developed economies have been free-falling, as the market is saturated, and overreliance on a few product lines also poses a risk to its revenues. The other Apple incidents have indicated that Apple has encountered geopolitical and logistical issues as a result of being supply chain reliant on China (Miller & Vnugopalan, 2025). In addition, the expanding regulatory environment of personal data privacy, application store policies, and antitrust laws must be carefully followed to enforce the rules without breaking them and protect the brand.

Identify three primary strengths and three primary weaknesses of the company.

Three primary strengths:

Globally recognized and trusted brand reputation.

Consistent innovation and technological leadership.

Strong financial position and resource base.

Three primary weaknesses:

Heavy dependence on iPhone revenue.

High product prices are limiting accessibility.

Supply chain vulnerabilities in Asia.

External Analysis

Does the industry offer attractive opportunities for growth?

The electronics and technology industry also presents significant growth prospects, particularly in wearable technology, artificial intelligence, and digital services. The global digitalization process and the Internet of Things (IoT) are offering Apple the opportunity to diversify its ecosystem and consumer base (Langley et al., 2021).

What forces are driving industry changes (consider PESTEL trends and shifts)?

Several PESTEL factors influence Apple's external environment. The technological breakthroughs that have progressed due to new technologies (5G, AI, and augmented reality) and societal trends (personalization and digital well-being) are emphasized. Apple has been addressing environmental issues, which is why the company aims to achieve carbon neutrality by 2030. Economic factors affect costs and prices, including inflation rates and fluctuations in exchange rates. Political and legal pressures, such as antitrust investigations, on the other hand, reduce the strategic decisions (Morrison, 2025).

What market positions do industry rivals occupy (consider Porter’s Five Forces)?

Samsung, Google, and Microsoft are the major rivals of Apple and are well-established in the market, but they lack a cohesive ecosystem that Apple possesses. Based on the analysis given by Porter, it has medium buyer power (because of brand loyalty), low supplier power (because of the high volume generated by Apple), and high rivalry. Devices based on Android pose a threat of substitutes, although the ecosystem lock-in mitigates this threat (Qiu, 2022).

What are the key success factors for future success in the company’s industry?

Constant innovation, sustainability, customer experience, brand trust, and strategic partnerships are the most imperative factors of success. Companies that can effectively combine hardware, software, and services will become more lucrative in the long run.

Does the industry offer good prospects for profitability?

Yes. The technology industry has been highly profitable, despite rising competition. The diversification of Apple in service-related sectors has increased recurrent income and minimized dependence on hardware practices (Morrison, 2025).

Identify three significant opportunities and three threats to the company within the business landscape.

Three significant opportunities:

Expansion into artificial intelligence and augmented/virtual reality.

Growth potential in emerging markets.

Continued expansion of the services ecosystem.

Three significant threats:

Intensifying global competition.

Rising regulatory and antitrust scrutiny.

Supply chain disruptions and geopolitical risks.

Strategizing

Pairing 1:

Strength: Good brand name and innovativeness.

Opportunity: AI and AR are experiencing significant growth.

Strategy: Product Development. Apple should leverage its innovative culture and brand power to develop AI-based devices and expand its AR products. This proposal aligns with the trend of consumers seeking enhanced experiences, allowing Apple to seize an early lead in a new technological frontier.

Pairing 2:

Weakness: The iPhone has been overly reliant on revenue.

Opportunity: Subscription and service growth.

Strategy: Diversification. Apple needs to consider offering more services, such as iCloud+, Apple Music, and Fitness+, that would not rely on hardware sales to boost recurring revenue. The nursing services are, however, packaged as one product to enhance customer satisfaction and stabilize revenues.

Pairing 3:

Threat: Regulatory Analysis and Antitrust Strain.

Strength: Financial and legal strengths.

Strategic: Defensive Compliance Strategy. To mitigate the risks associated with lawsuits, Apple should take the initiative to strengthen its transparency and data privacy programs and adhere to them consistently. Ethical leadership would help Apple salvage its reputation and regain consumer trust within the company.

Ranked Strategy Recommendations:

Product Development in AI/AR (most recommended).

Diversification into services and subscriptions.

Defensive compliance and regulatory adaptation.

Part 3: SPACE Analysis

1. Select a company to analyze.

Apple Inc.

2. Evaluate the company in terms of its internal financial strength.

1. Cash Flow: Review the company's Statement of Cash Flows. Is the net increase in cash during the year positive?
Yes

2. Leverage (DtoE ratio): Divide total debt by total equity. Is this value less than one?
Yes

3. Liquidity (current ratio): Divide current (short-term) assets by current (short-term) liabilities. Is this value greater than one?
Yes

4. Return on Assets (ROA): Divide net income by total assets. Is this value greater than one?
Yes

3. Evaluate the company in terms of the external environmental stability.

1. Rate of Inflation: Has the Consumer Price Index been under 3% for the last year? (PESTEL Economic)
No

2. Demand Variability: Have there been significant demand shifts in the company's industry recently? (PESTEL Economic, Social)
Yes

3. Technological Changes: Has the industry been operating without major technological disruption within the last 20 years? (PESTEL Technological)
No

4. Competitive Pressure: Do either competitors or substitutes have power over the company? (See Porter's Five Forces)
Yes

4. Evaluate the company in terms of its internal sense of competitive advantage.

1. Market Share: Does your company have a meaningfully larger market share than its closest competition?
Yes

2. Product Development: Is your company's most popular offering (i.e., good or service) at a better product life cycle position than competitors'? (at growth or maturity while others are in introduction or decline)
Yes

3. Customer Loyalty: Does the company keep customers from switching to competitors or substitutes often? (See Porter's Five Forces)
Yes

4. Control Over Suppliers and Distributors: Do the company have power over suppliers? (See Porter's Five Forces)
Yes

5. Evaluate the company in terms of its external industry strength.

1. Growth Potential: Does the company show a favorable growth rate demonstrated by a climbing earnings per share (EPS) trend over the last 5–10 years?
Yes

2. Profit Potential: Have profits in the industry been increasing over the last five years?
Yes

3. Productive Resource Utilization: Can it generally be said that there has been increasing jobs, low layoffs, low turnover, and no threats of strikes in the industry in recent years?
Yes

4. Market Entry: Do new entrants have power over the company? (See Porter's Five Forces)
No

The Grid Diagram

Apple’s Position:
Apple’s responses position it at top right on the SPACE Matrix grid, which places the company in the Aggressive Quadrant (Q2).

Recommended Strategy

Apple needs to adopt an Aggressive Growth Strategy focused on:

Product Development: Their commitment to continued innovation in AI, augmented reality (i.e., Vision Pro), and transformation in health technology.

Market Penetration: To take advantage of expansion opportunities that allow them to capitalize on their ecosystem in emerging markets like India and Southeast Asia.

Related Diversification: To further bolster their subscription-based services, such as Apple TV+, iCloud, and Apple Music.

These aspects of an Aggressive Growth Strategy align well with Apple's strengths, including its robust financial foundation, technological innovation, and customer loyalty, which enable global competitiveness and profitability.

References

Apple. (2023, June 5). Introducing Apple Vision Pro: Apple’s first spatial computer. Apple. https://www.apple.com/newsroom/2023/06/introducing-apple-vision-pro/

Canal, A. (2025). Apple is reportedly losing $1 billion a year on its streaming service as churn levels increase. Yahoo Finance.

Curry, D. (2025, August 6). Apple Statistics (2025). Business of Apps. https://www.businessofapps.com/data/apple-statistics/

Kennedy, R., Jamison, E., Simpson, J., Kumar, P., Kemp, A., Awate, K., & Manning, K. (2020). Strategic Management. Pamplin College of Business in association with Virginia Tech Publishing.

Langley, D. J., Van Doorn, J., Ng, I. C., Stieglitz, S., Lazovik, A., & Boonstra, A. (2021). The Internet of Everything: Smart things and their impact on business models. Journal of Business Research, 122, 853-863. https://doi.org/10.1016/j.jbusres.2019.12.035

Liao, X., Li, B., & Li, J. (2022, March). Impacts of Apple’s M1 SoC on the technology industry. In 2022 7th International Conference on Financial Innovation and Economic Development (ICFIED 2022) (pp. 355-360). Atlantis Press. https://doi.org/10.2991/aebmr.k.220307.056

Miller, C., & Venugopalan, V. (2025). Apple’s Supply Chain: Economic and Geopolitical Implications. https://www.aei.org/research-products/report/apples-supply-chain-economic-and-geopolitical-implications/

Morrison, M. (2025). Strategic Vulnerability and Competitive Positioning of Apple Inc.: A PESTEL and Porter’s Five Forces Analysis. A PESTEL and Porter’s Five Forces Analysis (June 22, 2025). https://dx.doi.org/10.2139/ssrn.5315266

Newton, V. (2021). Apple Inc. VRIO Analysis – Core Competencies & Competitive Advantages. Rancord Society. https://www.rancord.org/apple-inc-vrio-analysis-core-competencies-competitive-advantages

Qiu, H. (2022, December). Analysis of Apple Inc's Business Model Based on the SWOT Model and Financial Ratios. In 2022 4th International Conference on Economic Management and Cultural Industry (ICEMCI 2022) (pp. 245-257). Atlantis Press. https://doi.org/10.2991/978-94-6463-098-5_30

Statista, & Counterpoint Research. (2025). Quarterly smartwatch unit shipment share worldwide from 2018 to 2024, by vendor. Statista. https://www.statista.com/statistics/910862/worldwide-smartwatch-shipment-market-share/?srsltid=AfmBOooiUHrDV6MqMUPoMJGOQhBzsMcaT9httvGEPZGptLyZQtszpgpp