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Macro environment Macro environment is a far environment which comprise of several forces that raise strategic issue to Apple. These forces are social force, economic force, politic force, and technology force which well known as PEST (figure 3). 1- Technology forces The first force that influences computer industry structure is rapid and sustained technical progress. Each year, integrated circuits and other electronic components become better, faster, and cheaper, providing opportunities for improving existing computers as well as designing a new kind.
As computer comprises of hardware and software, Apple is really affected by technology innovation forces around it. Rapid innovation on hardware by component producers (e. G. Intel, MAD) and software by competitors (e. G. Microsoft) as well as complementary products from partner gives no choice for Apple except responsively catching the new hardware technology and also continuously innovating to sustain differentiation. Starting from 1976, Apple created personal computer as a proprietary system. Apple created the hardware by assembling components, create operating system (e. G.
Macro) and develop applications. That time, as Apple controls both hardware and software, Apple can create personal computer that deliver great personal experience compare to its competitors. That time, Apple computer main competitor is IBM personal computer. Previously IBM followed proprietary system as well. In 1 981, IBM changed into open structure. This move changed the environment of competition. This move brought many new entrants such as Compact and HP to produce IBM PC Compatible. This also brought in Intel as new entrant as producer of recesses and Microsoft as producer Of operating system.
Rapid innovation both from Intel created strong technological forces for Apple. As Intel released faster processor every quarter (figure 4), Apple, which that time sourced its processor from Motorola, had to respond with comparable or faster processor. Failing to respond this in time would create competitive disadvantage for Apple since competitors would adopt it and gain better technology. Microsoft which dominates operating system producer for Intel based personal computer is also the main competitor for Apple.
The rapid innovation by Microsoft which releases new version of Windows every 2 years (figure 5) creates pressure for Apple to upgrade Macro as well. This is not easy task for Apple since Microsoft Windows selling is very high so it can cover its R&D cost meanwhile Apple Macro market share is a little. In addition, the open system adopted by Microsoft and Intel and the network size of Windows attracts many Independent Software Vendors (ISP) breed in order to create application for Winter platform. The rapid innovation of Windows operating system and the increasing number of applications for
Winter platform make Windows Intel platform more valuable and thus create additional pressure for Apple especially high switching cost for consumer to switch to Apple. 2-Economic forces Monopolistic competition characterizes computer industry. A lot of existing competitors in the industry (e. G. IBM, Dell, HP, Compact, Ben Q, Sass, Gate Way, Leno, and Acre) and low entry barrier allow new entrant to enter the industry easily and thus increasing more competition. Supplier bargaining position is strong due to small number of processor suppliers (e. G. Intel, MAD, and Cyril).
Customer bargaining position is also strong due to low searching cost and low switching cost. Both Of these characteristics constrain companies in the industry to get only low operating margin (figure 6). Apple is also affected by this economic force where Apple has to choose between low prices to boost market share or premium price but lower market share. 3- Politic forces Joining China to creates opportunity as well as threat for Apple. Lower investment barrier and market barrier gives opportunities for Apple to take advantage of low cost labor as well as getting potential market.
On the other side, similar opportunities are also available to competitors. When competitors move its plant into China and become more efficient, Apple has to respond or will get cost inefficiency disadvantage over competitors. 4. Social forces Dynamic change Of life-style Different and dynamic change of needs and lifestyle push Apple to continuously innovate to adapt with it. Lifestyle and need of consumers are continuously changing. The motives of consumers on purchasing computer can be segmented into the following: Entertainment.
Costumers in this segment need better graphics and better mound thus this segment needs computer to have faster processing power, graphical purchasing power and good sound system device. Travel/mobility. Customer in this segment need smaller, lighter computer as well as longer time of battery life. Everyday computer. Customer in this segment need computer for day to day activities such as office system. This segment need more reliable computer to accomplish its task. Interconnectivity. This segment needs computer with faster and reliable communication device. Server.
This segment needs computer with high processing power, available ND reliable for running continuously non-stop. Status. This segment needs computer with great brand and brand new design. Dynamic change of demands Market demand is continuously changing. Data from 1 995 to 2003 (figure 8) shows that there is trend of decreasing PC demand On developing countries such as IIS, Japan, Singapore whereas the trend of increasing demand moves to emerging countries such as China, Malaysia and Korea. This moving of demand has to be responded by Apple in order to better manage its resources and manage its marketing strategy.