Free SWOT Analysis Of Apple Inc Research Paper Example

Executive Summary

Understanding the position of the company entails analysis various aspects of the company. Some of the aspects you can consider are PESTLE analysis, Michael Porter's five analyses as well as the SWOT analyses. This research concentrates on SWOT analysis that evaluates the company's strength, weakness, opportunities, as well as threats. The research has been conducted by the Apple Company which is a large multinational company dealing with electronic on devices and which concentrates mainly on innovation. The research is supposed to identify the position of the business and the strategies it can take to ensure there are high performance and competitive advantage in the market.
1.0. Introduction
Apple Inc. is one of the renowned multinational companies in the world. The company deals with the technological devices and mainly deals with the development of software. It is, in fact, the most popular and renowned electronic company dealing in personal computers and other consumer electronics. The company has had strong and highly successful Chief Executive Officers (CEO) with its current CEO being Tim Cook. The company's annual revenue increases steadily with the provision of new products in the market. The current annual revenue is at $156.508 billion dollar with a profit of $41.733 billion dollars. The company employs many people compared to other firms globally and currently the company has over 82000 employees who are serving customers throughout the world. The company becomes one of the highest actors in the technological sector and wishes to attain high-level performance through evaluating its strengths, weaknesses, opportunities and threats (Newlands & Hooper, 2009). Through this, the company can be able to devise strategies for its future competitive advantage. Apple Inc. headquarters are in USA.
The main competitors of the Apple Inc. are Microsoft Corporation, Cisco Systems, Dell Inc., Hewlett-Packard Company, Electronic Co., Google Inc. and LG Electronics. The focus of the paper is on the SWOT analysis of the company to establish its position in the market and also its ability to survive in the market under the high competition. Similarly, the paper shall focus on the Strength, Weaknesses, Opportunities and Threats of the company that are the major tools for establishing the fate of the company (Newlands & Hooper, 2009).

Diagrammatic representation of the Apple Inc. SWOT Analysis

Source: Strategic Management Insight
2.0. Strengths
2.1. Brand reputation
The High reputation of the company is a major strength in its operation. The company’s brand reputation revolves around highly innovative, well-designed products which provide high models, well-functioning and sound performance business. The brand name of the company has heat all the part of the world through the established system of marketing its high-value products. Through the measuring techniques, Apple brand is $76.5 billion according to the 2012 results that placed it at the second position in the world. Brand reputation is the most effective aspect which all the companies wish to attain through its functions (Newlands & Hooper, 2009).
2.2. Company’s highest rank as the innovator in mobile device technology.
Innovation is a very rare aspect in the world and which can only be attained by highly aggressive businesses in the world. Apple Inc. has however attained high standards of innovation. According to the 2012 business position results, Apple Inc. Stood as the most innovative products in the world for the third time now. The strength of the company today lay in producing highly innovative products in the market.
2.3. Strong financial capacity
The financial stability of the company defines its ability to survive in the market. It also defines the extent to which the economy change can affect the performance of the company that include the interest rates and the credit market (Newlands & Hooper, 2009). Apple Inc. is one of the best companies in the world in the financial performance. The company holds more than $10,000,000,000 in cash which can be used in solving the various equations arisen during the performance of the company. The amount can also be used in buying back the company’s shares. The company also attained a gross profit of 40% that was the highest among its competitors. More so, the company has no debts in any of the organizations. Additionally, high financial performance and lack of debts means the company cannot be directly affected by interest rates and credit market and noted earlier.
2.4. Correlation between the customer loyalty and expanding closed ecosystem.
The initial trials by the company to establish closed eco-systems came as a weakness to the operations of the company. The company however was able to reorganize its strategy and turned this into strength. Firstly, Apple has the full range of varied applications, software and products that are interlinked to support each other. Secondly, some new products are yet to be released but it is supposed to be released very soon which is the ITV. This will expand the ecosystem further. Thirdly, Apple enjoys strong customer loyalty oath. This has currently increased due to the closed ecosystems and hence increasing the competitive advantage of the company.
2.5. Strong marketing and advertising departments
The High competition in the industry calls for highly appealing customer service and established methods of dealing with customers. In response to this, Apple Inc. main responsibility and function are to create an established brand name through marketing and advertising techniques. Through the marketing and advertising departments, it can sell very expensive products easily; build superior and appealing stores while advertising their products in compelling manner.
2.6. Functionality of retail stores
Apple Inc. stores are the most profitable stores in terms of products sales. The stores are mainly concerned with retaining the customers through giving high utility in the performance of the customer. They are also concerned with ensuring new customers are created and retained by the company. This is done through high-quality customer service and experience while giving direct contact with knowledgeable staff. They stores are also concerned with creating awareness of the products.
3.0. Weakness
3.1. Highly priced products
Apple products are much more expensive as compared to the competitor’s products. The relationship between the quality and the price of the product in relation to competitor’s products is not justified. This means that the consumers can be able to buy equal products from the competitors at a much lower price (Lake & Drake, 2014).
3.2. Patent violation/breach
Apple Inc. has been accused of infringement of other brands patents as it works through reverse engineering to improve from the other products innovations. According to the records, the company has also lost in some trials on infringement. This tarnishes the name of the company, affects the Apple brand and also affects the financial situation negatively (Newlands & Hooper, 2009).
3.3. Products incompatibility with different OS
The Operating System (OS) and iOS X are quite different from each other and more so, they are highly incompatible with Microsoft OS, which is the highest software designer. This, therefore, makes the user prefer to remain and Intel hardware that are accustomed and compatible with other competitors devices. This means the cost of switching and serviceability becomes quite high.
3.4. Changes in management
Management stability is an essential part of company operation. Apple has faced numerous changes in top management with Tim Cook becoming the CEO after the loss of Steve Jobs in 2012. More so, Scott and John Browett, who was the chief of retail, left the company that impacted negatively on the company management (Newlands & Hooper, 2009)..
3.5. Decreasing market share
3.6. Long-term gross margin decline
Since we are aware that the exclusive profitability and high performance of the Apple Inc. come from the high-profit margins delivered from a single product, the analyst fear that with the continuous competition, this may be highly affected. This means that with the continuous low prices of other products, Apple will not be able to retain the high profitability margin in its products.
4.0. Opportunities
4.1. iTV launch
The launch of the new product (iTV) into the market is expected to increase the market sale of the Apple TVs throughout the world. It is also expected that the product eco-system will be intensified and hence this may also increase the total sales of other Apple products.
4.2. Increase in tablet and Smartphone market
Apple Company is expecting that with the increase in the demand of tablet and Smartphone in the market, it will be able to increase the market share. This will be critical in responding to the ailing and sickly trend in the market share.
4.3. High demand of the iPhone 5, iPhone 6 and IPad mini
The high increase in new company's innovative products stated above is an added opportunity for the company. Through the development of these products, it is expected that the firm will be able to enhance its competitive advantage in the market.
4.4. Upcoming new providers of application processors
Currently, Apple Company depends on the Samsung as the only provider of the application processor. This is despite the fact that Samsung is one of the main competitors in the market. However, with the rising and the growth of other manufacturers of application processors with superior engineering capabilities, it is expected that the company will be able to produce its products easily without depending on its competitors (Walters & Jackson, 2012).
4.5. Acquisition and Mergers
Apple Inc. has set a strategy for obtaining patents through mergers and acquisition and merging with firms and companies that have patent rights (DePamphilis, 2013). This may make the company own patents which it lacks.
4.6. Damages from patent infringements
Violations or the breach of the company’s own patent by other companies provides an exportable opportunity of gaining more capital reserves from the cases filed and won which at the same time tarnishing the name of the competitors (Hill & Jones, 2009). This can be mostly beneficial since the company is at the forefront in innovating new products that entice competitors.
5.0. Threats
5.1. Increases in tax and inflation
The increase in the government corporate taxes is a negative effect on the performance of the company. During inflations, the performance of the company is highly affected as the visibility of its future performance cannot be applicable.
5.2. Rapid technological change
The changes in technology are the most severe threat that is faced in this industry. It is a combined threat with Apple and its competitors. In the industry, companies are under pressurized to give and release new products the market (Hill & Jones, 2009). It is, therefore, paramount that the company keeps on trend through releasing continuous new products in the market.
5.3. Price pressure from Samsung over key components
Samsung asked Apple to pay high for the purchase of the application processors. This was Samsung’s strategy to respond to the high competition from the Apple and the unavailable viable substitutes.
5.4. Rising pay levels of Foxconn workers.
Other threats facing Apple Company are strong dollar, Android OS growth, company’s breached IP rights and the tendency of the competitors moving to the online music market (Hill & Jones, 2009).
6.0. Conclusion
In conclusion, having understood the position of the Apple Inc., and its positional relationship with its main competitors, we can be able to simulate its best future performance. The knowledge about the company’s position in the SWOT analyses is a general overview of the company basic (Walters & Jackson, 2012). The most important aspect is what strategies the management would take towards better performance of the company. We expect that the management will be able to integrate all the results of SWOT analysis to come up with highly acceptable solutions to the threats and weaknesses while at the same time working on opportunities through proper planning of its strengths.
For better understanding of the company and the strategies that it can take, we are supposed to conduct the PESTLE analysis that analysis the external environment in which the company works in. We are also supposed to understand the analysis of the company according to Porter’s five forces analysis.
7.0. References
DePamphilis, D. M. (2013). Merger, acquisition, and other restructuring activity: An integrated approach to process, tools, cases, and solutions.
Hill, C. W. L., & Jones, G. R. (2009). Essentials of strategic management. Mason, OH: South-Western/Cengage Learning.
Kurtz, D. L. (2013). Contemporary marketing: David L. Kurtz. Mason, Ohio: South-Western Cengage Learning.
Lake, P., & Drake, R. (2014). Information system management in the big data era'.
Newlands, D., & Hooper, M. (2009). The global business handbook: The eight dimensions of international management. Farnham, Surrey, England: Gower.
Newlands, D. J., & Hooper, M. J. (2009). The global business handbooks: The eight-dimensional aspects of international management. Farnham, Surrey, England: Gower.
Walters, S., & Jackson, K. L. (2012). Break-through branding: Positioning your library to survive and thrive. New York: Neal-Schuman.