Employing Strategy in a Competitive Environment



Employing Strategy in a Competitive Environment

Introduction

Strategic management is considered as an integral element of management in today's business model. Environmental scan is one of the main parts of the overall process of strategic management. It is conducted to examine and assess the economic, political, social, regulatory and technological factors that may affect the operations of a business. It facilitates firms to determine potential threats and causes of failure within the market and helps firms to prevent such outcomes that cost huge losses to business. In order to employ a strategy in the business oriented environment, managers usually conduct SWOT and Pestle analysis.

The Pestle stands for political, economic, social, legal, technological and environmental factors that possess a significant impact on the company's operations. Once Pestle analysis is complete, the second usual step is to conduct a SWOT analysis that helps in determining the potential strengths, weaknesses, opportunities and threats to the organization. It is one of the most fundamental aspects of strategic management and planning. This approach helps organizations in identifying the threats and designing strategies accordingly (Hamel, n.d.).

Introduction to Company

Apple Inc. is engaged in offering a portfolio of products that is comprised of Mac computer systems, iPods, music and video players, iphones, and ipads. The company mainly designs, manufactures, and markets wide range of personal computers, mobile devices, and music players. It is also engaged in selling some software, services, associated devices and networking solutions. The products offered by the company are divided into eight segments. The company's operations are expanded in America, Japan, Europe, and Asia (www.apple.com, 2013).

Environmental Scan

The environmental scan for the company located in Washington DC, USA is given below:

Political Factors

Political factors have a major role to play in the private business sector. The company has reported majority of sales incurring from outside of USA since 2007. It is c considered as an outcome of adverse international relations of USA with countries located in Asian region.

The company is engaged in producing major components of its products in other developing countries mainly due to low production cost and cheap labor. In this regard, the relationship with countries like China, Korea, Ireland, Cork, and Czech of Apple has a significant impact on its operations.

Economic Factors

The overall economy across the world has been experiencing fluctuating trends that may also affect significantly the sales and financial operations of the company. The inflation rate in the economy has been surging up and the nominal income of the average individual has been going down. It has adversely affected the purchasing power of an individual. Similarly, the unemployment rate is getting higher day by day. These factors have affected the sales of luxury items.

The US dollar has also been weakening against other strong currencies that can affect the overall sales figure after translation. The company has made most of the strengthening effect of USA dollar against currencies of developing countries by purchasing maim of items to minimize the overall effect of ...