Strengths, Weaknesses, Opportunities, and Threats of Apple - Report Example

SWOT Analysis on Apple Company Illustration Apple is a globally famous organization. Over the years the organization has managed to holdits brand image in the global market. In this report with the help of secondary data the organization has been analyzed on the basis of some criterions. Those criterions are strength, weakness, opportunity and threat. At the end of this report a suitable conclusion has been drawn on the basis of findings. The author has provided an array of recommendations as well. Contents Contents 2 Terms of Reference 3 Procedure 3 Findings 3 3.1 Strength 3 3.2 Weakness 4 3.3 Opportunity 5 3.4 Threats 6 Conclusion 6 Recommendations 7 Bibliography 8 Appendix/Appendices 9 Terms of Reference It is a report which has to be presented in the class presentation by a student of the same university. The report was handed over to the professor of the session and was submitted by Turnitin: Student name: Adrian Blell. Procedure The report is totally based upon secondary research. During the course of this report several secondary sources like books and online articles have been used. Findings Here in this report Apple as an organization will be analyzed on the basis of SWOT analysis. 3.1 Strength Marketing and advertising of Apple is a significant strength for the US based organization. Over the years the company has managed its marketing and advertising activities in suitable ways which have created a unique image about the company. Being a cult brand the company has strong and highly equipped distribution channels across the USA. That means the organization can easily make their products available for the customers. The organization has enjoyed appropriate leadership of Steve Jobs. Proper leadership has taken Apple up to a new height glorious success (Pahl and Richter, 2009). The organization believes in vertical integrations. That is why the company has able to increase their technological resources and other resources. Apple with its superior innovations has offered good quality products to its customers. Wonderful innovations have helped the company to come up with several new products which has attracted global customers (Böhm, 2009). The organization enjoys higher level of customer loyalty across the world. Level of customer loyalty is so high that customers are ready to pay extra money for Apple products. In the personal computer industry the organization has been able to secure its place as the pioneer. The US based organization enjoys high demand of orders. The company has proficient and highly equipped research and development facility which assists the organization to carry out their continuous innovation. Current revenue and net income of the organization is US$ 182.795 billion and US$ 39.510 billion respectively. It indicates that the organization has significantly sound financial situation which provides extra competitive advantages to Apple (Woellner, 2013). Employees of the organization are highly dedicated and committed towards their duties. It helps the organization to be much more effective and proactive in nature. Figure 1: Increasing trend of revenue 3.2 Weakness Distribution channels of Apple in developed nations are significant strengths for the organizations. In developing nations like in India and China distribution channels are not at all extensive in nature. Customers of those countries do not get the Apple products easily. To poses an Apple product customers have to wait for long period of time (Lehuan, Xuan, Danfei, Yongming, Hao and Changhua, 2011). Being premium category brand the organization has serious weaknesses in the product breadth at various price points. Prices of the products are generally high than the competitive products. This high pricing strategy of the organization is an important weakness for the company (Winkler, 2012). Due to their high pricing the company is losing many numbers of low and middle income customers. Apple is significantly over dependent upon some limited products. Revenue of the company is too much dependent upon products like iPhone and iPad. Apple products are not at all compatible with other operating systems (Tar, 2013). It is a definite weakness for the company. Incompatibility with other operating systems is making the organization much more rigid in nature. This high level of rigidity is an unavoidable weakness for the company. It certainly limits the domain of Apple products. In some cases the organization has serious weaknesses to maintain its continuous innovation and product quality. iPod is successful product of Apple but that product also not free from weaknesses. During the initial period of launching this product, several glitches related with battery life and faulty screen have indicated technological weaknesses of the company (Boone and Kurtz, 2011). Most of the Apple phone has similar kind of features. It is a fundamental weakness for the company. Products of the company are designed for the users who have specific needs and requirements which do not consider various kinds of customers. Figure 2: Disrupting Innovation of Apple 3.3 Opportunity The company has significantly sound financial situation. It creates enough opportunities for the company to acquire more similar kinds of small organizations. It will help the company to enhance its resources and productivity. Wearable gadgets are gaining their demands. The organization has superior and modern research and development facilities. With that facility the company can come up with new products in the field of wearable gadgets. It can open a new horizon of business profitability for the US based organization. Global customers have welcomed the concept of smart phones and tablets. Demands of the smart phones and tablets are increasing significantly. It provides significant opportunities for the organizations to come up with these kinds of products. Markets and economy of developing nations are growing in fast pace. Disposable incomes of the people in those countries are increasing significantly. It provides high opportunities to the company to tap those markets. Apple has lucrative opportunity to design its music player and iTunes in case of mobile phone format also. The organization currently enjoys 20% market share of the global PC and mobile phone industry. That means the company has enough opportunity to increase its market share. The organization has significant opportunities in BRIC countries. The company has developed iPad advertising platform (Hasan, 2013). It allows the company to advertise on Apple iPod, iPad and iPhone. Strong growth in the mobile advertising market is a significant opportunity for the company. i TV launch is also a huge opportunity for the company which may increase T. V. Sales for the organization. High demand of iPad mini and iPhone 5 can increase sales of the Apple products. Cloud computing can be a great opportunity for the organization to increase its future profitability. 3.4 Threats In 2013 Federal taxes increased significantly. It can be a real threat for the organization in terms of their profitability. Rapid technological changes and high level of competitions from the side of the customers can create serious threats for Apple. Foxxcon is a Chinese manufacturing aid of Apple. Manufacturing of Apple products are significantly dependent upon Foxxcon. It is being observed that in between 2010 to 2012 salary of the Foxxcon workers increased by 3 times. Increasing trends of the salary are real threat for the company. Apple OS faces genuine threats from the Android OS (Newlands and Saee, 2012). Global economy is on the recovery mode that means dollar is appreciating in compare to other currencies. It can hamper potential profits for Apple from other countries. The organization is facing serious threats from its nearest competitors like Sam Sung and HTC. Over the years the organization has engaged in various copyright infringement disputes. All these disputes are significant threats for the company’s image (Magee, 2011). Most of the Apple revenue comes from the developed nations. But currently markets in the developed nations are getting saturated. It is a serious threat for the company. Due to high competitive nature of the industry, other companies are eating into the market share of Apple. The organization does not have enough customization facility and it is a serious threat for the company. Conclusion The above findings are indicating that, Apple enjoys significant customer loyalty across the world. With its high quality products and superior R&D the organization has created several legendary products. During the course of this above analysis it has been observed that prices of Apple products are considerably high than the other competitive products but still customers across the world consider Apple products as the status symbol. The US based organization has sound and suitable financial situation to increase its business operations. But certainly the company is not free from weaknesses and threats. Incompatibility with the other operating system is a serious weakness for the company. During the report one thing has been cleared that, the industry is getting highly competitive in nature. Technological outlook is also changing in fast pace. Competitors of Apple are breathing down the neck of the company. Recommendations 1. The organization should come up with products from various price points. The organization should focus towards the low price product also. It will allow the organization to target more customer base. Low price product will increase numbers of loyal customer base. 2. The organization should improve its distribution channels in the developing countries also. The company can sale their products in the multiband retail shops as well. It will allow the company to make their product much more available in the market. 3. The company should focus towards the OS compatibility. It will allow the US based organization gain much more popularity among their customer base. 4. The company should be more proactive in their online music business. 5. The organization should reduce it’s over dependency on products like iPhone and iPad. 6. The company has enough cash reserves, so the organization can acquire more similar kind of small manufacturing companies which will increase the innovative power of Apple. Bibliography Böhm, A., 2009. The swot analysis. New York: GRIN Verlag. Boone, L. and Kurtz, D., 2011. Contemporary marketing. London: Cengage Learning. Hasan, R. 2013., Apple Inc. - An analysis: pestel analysis, porter’s 5 forces analysis, swot analysis, comprehensive analysis of financial ratios, and comprehensive analysis of share performance of Apple inc. New York: GRIN Verlag. Lehuan, W., Xuan , F., Danfei, L., Yongming, J., Hao, Z. and Changhua, L., 2011. Apple Inc. [Pdf]. Available at: http://denmark.chsnenu.edu.cn/Apple.pdf. [Accessed 14 November 2014]. Magee, D., 2011. Apples competitive advantage: multiple products that integrate as one. [Online]. Available at: http://www.ibtimes.com/apples-competitive-advantage-multiple-products-integrate-one-300605. [Accessed 14 November 2014]. Newlands, D. and Saee, J., 2012. The global business handbook: the eight dimensions of international management. London: Gower Publishing, Ltd. Pahl, N. and Richter, A., 2009. SWOT analysis - idea, methodology and a practical approach. Berlin: BoD – Books on Demand. Tar, A., 2013. Apple swot analysis. New York: GRIN Verlag. WINKLER, R., 2012. Apples Power Within. [Online]. http://online.wsj.com/articles/SB10001424127887323316804578163733429534650. [Accessed 14 November 2014]. Woellner, J. Z., 2013. Business analysis of apple inc. New York: GRIN Verlag. Appendix/Appendices Statement of problem: Problem statement is critical analysis of Apple Statement of the purpose (including expansions or restrictions): The purpose of this report is to evaluate Apple on the basis of its strengths, weaknesses, opportunities and threats. Research Strategy Source 1 Book Böhm, A., 2009. The swot analysis. New York: GRIN Verlag. Citation here The book has significant contribution to the report Place screenshots here Source 2 Book Boone, L. and Kurtz, D., 2011. Contemporary marketing. London: Cengage Learning Citation here Contribution to argument (i.e. why this source was used) The book has given enough insights for this analysis Source 3 Book Hasan, R. 2013., Apple Inc. - An analysis: pestel analysis, porter’s 5 forces analysis, swot analysis, comprehensive analysis of financial ratios, and comprehensive analysis of share performance of Apple inc. New York: GRIN Verlag. Citation here Contribution to argument (i.e. why this source was used) The book has helped to analyze the organization Place screenshots here Source 4 Website Lehuan, W., Xuan , F., Danfei, L., Yongming, J., Hao, Z. and Changhua, L., 2011. Apple Inc. [Pdf]. Available at: http://denmark.chsnenu.edu.cn/Apple.pdf. [Accessed 14 November 2014]. Citation here Contribution to argument (i.e. why this source was used) The website has provided competitive picture of Apple Place screenshots here Source 5 Website Magee, D., 2011. Apples competitive advantage: multiple products that integrate as one. [Online]. Available at: http://www.ibtimes.com/apples-competitive-advantage-multiple-products-integrate-one-300605. [Accessed 14 November 2014]. Citation here Contribution to argument (i.e. why this source was used) The website has provided various factors related with Apple. Place screenshots here Read More