SWOT Analysis for Apple Inc.

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Apple Inc. is one of the best-known publicly traded companies in the United States, with shares traded on the NYSE and other stock exchanges. It is a multinational American technology company headquartered in Cupertino, California (Clark et al. 111). It is primarily focused on the development, design, and sale of web services, computer applications, and electronics. iPhones, the Mac personal computer, the Apple smartwatch, the iPad portable computer, and the iPod video player are some of Apple's hardware devices. The company's apps include the iTunes music app, Safari web player, macOS, and iOS operating systems. Its online services also include the Mac App Store, Apple Music, iCloud, and iTunes store. The company was established in April 1976 by Ronald Wayne, Steve Jobs and Steve Wozniak to create and sell Wozniak’s personal computer.

Five Forces of Apple Competition

Apple’s vision and mission statements can be argued out as the foundations of the company’s success over the years. The vision statement indicates the growth of the corporation and development of their products while their mission statement shows the direction in which the company requires to take to continue being successful. Apple’s current vision statement states that they are designed to make great products for the world, and that’s not changing. The company vision statement also indicates that it believes in innovations and also participating in markets where they can make a significant contribution. The vision statement also states that the company only settles for excellence and nothing less, and they also exhibit the virtue of honesty and have the courage to accept and change any wrong decision they may have made.

The current mission statement of the company is to design Macs, the premier personal computers in the world, along with other professional software such as iLife and iWork. Apple also looks forward to revolutionizing music through its iPods and iTunes online stores. Primary stakeholders are also very important to the success of the company especially through supporting the achievement of the vision and mission of the company.

Industrial competition is one of the five forces of competition that significantly impact the company. There exist a large number of major companies that directly compete with Apple in the technology industry. These companies include Samsung, Google Inc., and Amazon. All these companies spend a lot of money on research and development just like Apple does. However, the switching cost to these other competitors is very low, and therefore Apple has been able to maintain its customers.

Bargaining power of buyers is also another key factor that the company considers based on the individual bargaining power and the collective bargaining power of the buyers. Loss of one individual buyer from the company does not highly affect Apple’s profits, but the defection of a large number of buyers highly affects the company and may benefit its competitors. However, the company has been very buoyant in this form of competition through creating a huge customer base that would not contemplate leaving iPhone smartphones for other phones.

The company also faces a threat of new entrants in the marketplace that would affect the company’s market share. However, this threat is relatively very low. The reason behind these is because it’s very expensive for a new company to start operating within the industry and the company would face too much difficulty to achieve Apple’s brand name acceptance. The bargaining power of suppliers is also another weak force that Apple faces in the marketplace for its products. Apple has a large number of potential suppliers, and therefore it has a lot of choices to choose from for the supply of some of its products. Apple is also a vital customer for its suppliers, and therefore they can’t take any chances of losing the institution. Substitute products, are not products that try to compete with Apple products rather they are products that can be used as a replacement for their products. Threats from substitute products are also very low since Apple products have great features and capabilities than their substitutable products.

SWOT Analysis for Apple

Strengths

Apple experiences various strengths based on their advertising capabilities which increases much awareness and demand for the products of the company. Its advertisement budget is not very large compared to its competitors since it uses its revenues effectively. In the year 2015, Apple spent 0.77% of its total sales on advertisement compared to Samsung which spent 1.86%. However, Apple still achieved great brand recognition than its competitor Samsung. Apple also enjoys an extensive and strong United States distribution channel through its multiple channels that it uses to deliver its products to its customers. Some of the distribution channels that the company uses are its direct distribution channels which include its retail stores and also its online stores. Avery few number of Apple competitors have their physical retail stores and therefore making it very hard to compete with Apple.

Weaknesses

Apple faces various weaknesses such as their high reliance on the sale of iPhone phones. IPhone smartphones are the most important source of revenue for the company and account for about 66% of the total sales of the corporation. Therefore, this high dependence on the sales of smartphones makes the company very vulnerable especially due to changes that may occur in the market for smartphones. IPhone smartphones targets rich consumers and their markets are mostly in developed countries where smartphone markets have a lot of dealers and this proving as a threat to the company. Apple also faces another weakness of its incompatibility with other Operating systems. Apples operating systems which are iOS and OS X are very different from their competitors such as Windows and Android.

Opportunities

The expected growth of the Internet of things (IoT) market could be a major opportunity for the company over the next decade. Currently, over 20 million devices are connected to the internet and this value is anticipated to increase by 50% to by 2020 (Khan et al. 955). Apple, therefore, has a great opportunity of taking advantage of the advancing IT market. This situation is because, Apple offers smartphones, computers and other hardware products that can be controlled through internet connections and also the company has software’s which are very important in the management of information from connected devices. The growth of mobile payment markets is also another great opportunity for the Apple Company. Research has shown that the mobile payment market is expected to grow in the future and therefore the company should take this as a business opportunity.

Threats

Apple faces significant threats from its competitors such as Dell, IBM, and HP in the manufacture of personal computers leading to the reduction of its market share and also revenues. Apple also faces huge competition from Samsung and Google who are working together to offer some of the best devices to compete with Apple’s products. The strong U.S Dollar has also affected the earnings of the company, especially from foreign markets due to the high currency exchange rates. The company has also faced some major lawsuits especially from patent violations and therefore hurting the organisation’s brand.

The SWOT analysis for Apple Inc

The company has various vital strengths that can be used to solve certain weaknesses of the organisation. Moreover, the company can also utilize its strengths to exploit various opportunities and also lengthen its distribution network. Apple can also come up with other strategies such as using its famous brand and other innovation processes to help them successfully develop and launch new product lines. On the other hand, the organisation faces some threats which include its aggressive competitors and also imitations from other organisations which operate in the same industry as Apple. However, this issue can be solved by creating a very strong patent portfolio and also coming up with various innovations to increase the competitive advantage of the institution even while other competitors try to catch up.

There exist various strategies in which the Apple Company can use to maximise its profitability and competitiveness. For example, the personal computer market has begun to become more commoditized and thus increasing more rivalry among competitors. However, the Apple Company can utilize various resources and capabilities such as talented software and hardware engineers and the leading design teams for the industry to help increase their competitive capacity in the market. The company should also increase their research and development budget to help them come up with more innovative ideas and thus increasing their market share. Creating a huge portfolio of patents is also very important for the organisation to increase their competitiveness and profitability in the market in which it operates. The company can also increase its market share by creating a good customer relationship.

The act of Apple creating a robust relationship with its customers may prevent its customers from dealing with its competitors especially when they offer new hot offers. The company can also acquire some of its competitors, and by doing so, the company accomplishes two goals. One is that Apple acquiring another company will help it acquire the customers of the other firm and it also reduces the number of competing companies by one. This action will enable the company increases its profitability and competitiveness in the technology industry.

Apple Inc. The company can use various online platforms for employees of the firm to raise their opinions, ideas and also concerns. In this type of platform, employees will fill in surveys about their working conditions and also create awareness if there is a need for change in the environment they operate in every day. This kind of communication will help the Board of Directors in the organisation realize where they should place their focus on and also which employees are not following the standards set by the organisation. The organisation should also hold a monthly meeting with its stakeholders for them to have a one on one experience with the management of the company and discuss important information regarding the brand of the institution (Lando and Agnes 5). Such meetings also help the stakeholders to discuss any upcoming issues and concerns. The company should also provide monthly newsletters to the employees of the firm which will provide directions in which the company is taking and also any urgent news that the company may want to pass to its workers. Newsletters are also an important way to show that the company cares about both the employees and customers and not only its brand.

Corporate governance refers to how a certain company may use to control and protect the interests of internal and external stakeholders in the company. One of the types of corporate governance that Apple Inc. Company uses is its Board of Directors (Heracleous and Loizos 92). The Board of Directors of the organisation are elected by its shareholders and are used to bridge the gap between the shareholders and the owners of the Apple Inc. Company. The board’s main function is to review the institution’s management and remove individuals who don’t work hard for the company to improve its financial performance.

The organisation also has an audit body which is independent and reviews the company’s financial and business activities. Auditing of the company ensures that it follows the national accounting standards, regulations and other external rules set aside by the body. Information from auditors is very important to banks, shareholders, investors and the general public since it helps them critically assess the performance of the organisation. Good audits result can help the company thrive in its business environment as the Apple Company has done over the past years. Moreover, great records from the Apple Company have made other businesses increase their willingness to work with the organisation especially its suppliers.

During the Steve Jobs era which ran from 1997-2011, Apple was recognized for its autocratic form of leadership with Steve Jobs managing quite a number of business operations for the organisation. However, after his demise in 2011, the company has taken a collaborative approach to leadership according to various reports. Tim Cook has significantly changed the leadership of the organisation leading to him being acknowledged by the Fortune magazine as the world’s greatest leader. Tim Crook development of the apple watch from scratch made him a very effective leader of the organisation.

Effective leadership of the organisation has also made apple achieve a market capitalization worth USD 700 billion and indeed being the first organisation to attain such a high market capitalization (Siepel et al. 27). Tim Cook has also been praised by employees of the organisation to be such an inspiring leader that influences his subordinates to become better people in life. However, the present leadership of Tim Crook should exhibit high levels of ambitiousness as those shown by Steve Jobs. The company’s leadership should not be very cautious in investing in product brackets and should also be very innovative to gain a wide market share.

Apple has tried very hard to be a responsible and ethical corporate citizen to the society and also to the environment in which it operates. Innovation is one of the biggest gifts that the company has given back to the society. Innovations in the company have helped develop the technology sector and also have been a very important economic driver for most countries in the world. The company has also created around 514,000 jobs in the United States, jobs that could be created in other countries at cheaper cost. This case shows how the company has great value for the United States local economy.

The environment influence of the organisation product’s is also measured and managed. Apple products are in fact designed to minimise their environmental damage through various ways such as less energy consumption, recycling, and small packages. However, there have been critics who have arisen towards the danger that may arise from the use of various Apple products such as iPads or iPhones which the company has been very silent about. Some environmental impacts also arise in the extraction of raw materials used in the manufacture of the company’s products.

In conclusion, Apple has been one of the leading technology public traded companies for a long period. The reason behind these is that the company can deal with its competitors and have created a good image for itself over the time being. The company has also come up with various strategies that have helped it increase its competence and profitability. The company has also used various ways of corporate governance that have helped every stakeholder in the organisation be involved in various decision-making processes. Effective leadership has also been a major contributor to the success of the company through good leadership from Tim Cook. The company has also observed various ethical issues such as the creation of employment for the American people and also through providing great innovations to the world. Therefore, these are some of the reasons why the company has thrived and dominated its rivals for a long period.

Works cited

Clarke, Thomas, and Martijn Boersma. "The governance of global value chains: Unresolved human rights, environmental and ethical dilemmas in the apple supply chain." Journal of Business Ethics 143.1 (2017): 111-131.

Heracleous, Loizos. "Quantum strategy at Apple Inc." Organizational Dynamics 42.2 (2013): 92-99.

Khan, Usman Ali, Mohammd Noor Alam, and Shabbir Alam. "A Critical Analysis of Internal and External Environment of Apple Inc." International Journal of Economics, Commerce and Management 3.6 (2015): 955-961.

Lando, Agnes Lucy. "The critical role of crisis communication plan in corporations' crises preparedness and management." Global Media Journal 7.1 (2014): 5.

Siepel, Josh, and Paul Nightingale. "The increasing pervasiveness of financial markets across the global economy has been identified in the literature with the spread of ‘Anglo-Saxon capitalism’, reflecting the notion that a common US–UK model of governance and managerial attitudes is becoming increasingly common worldwide. This paper questions the existence of a common US–UK model by exploring how the concept of ‘Anglo-Saxon capitalism’..." Critical Perspectives on Accounting 25.1 (2014): 27-35.

December 28, 2022
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