Apple Inc. Business Analysis - Essay Example

? Apple, Inc. Business Analysis Introduction Under consideration is the organization Apple, Inc. Apple, Inc. will be examined for potential purchase and inclusion for the mutual fund. Apple’s history is well understood. Once a thriving technology company, the organization went through a period of hardship after firing company founder and CEO Steve Jobs. Jobs would later return and guide the organization to eminence, and Apple, Inc. is today the world’s most profitable technology company. In determining future investment viability a number of perspectives are advanced. SWOT Analysis Strengths One of the most overarching considerations is Apple, Inc.’s SWOT analysis. The organization’s current strengths are multi-varied. Perhaps Apple’s greatest current strength is its competitive advantages. From the earliest incarnations of Apple Computer the company sought to carve out a competitive advantage through horizontal and vertical integration that restricted external product licensing ("Apple computer, inc.," 2011). Today among Apple’s strongest products are the iPhone, iPod, iPad, and the Mac book. These elements have a strong presence in everyday recreation uses, artistic practices, and education. In addition, they are supported by Apple’s globally strong brand. Another prominent advantage is Apple’s attention to design elements. Building products from the ground up allows Apple to implement innovative design elements that create a loyal customer base. One considers the iMac released in 1998 with its eggshell design as prominently implementing this technique ("Apple computer, inc.," 2011). This design advantage also extends into Apple’s image. Apple, Inc. increasingly cultivates an image that presents itself as the alternative choice to mainstream computer producers. This has allowed Apple to become a cultural force resulting in significant market advantage. The iPhone contains Apple’s unique operating system, allowing it significant quality advantage over competitors ("Apple -- iphone," 2011). Indeed, quality product design has become one of the driving forces of Apple’s success and has created a significant competitive barrier for outside manufacturers, such as Google (Gilbertson, 2010). One must also consider the iPhone’s competitive advantage in terms of its position in the Apple whole. In these regards, Apple has been able to leverage its competitive position in mp3 with iTunes and its compatibility with the Macintosh operating system as a means of encouraging user identification (Schramm, 2011). The Apple App Store also provides the organization with a unique advantage over other smart phone suppliers. In addition, Apple’s implementation of Siri voice activation technology will surely drive an amount of future sales. Weaknesses While Apple, Inc. has a number of strengths one must consider their potential weaknesses. One of the largest questions of the organization is the extent that they can continue their current unprecedented streak of innovation and growth. Perhaps the greatest challenge in this realm of understanding considers that company founder Steve Jobs recently died; significant questions remain as to whether new CEO Tim Cook will be able to continue this past success. While the Apple App store is a highly important element in the iPhone’s success the Android Marketplace has begun developing a number of competitive applications as a means of threatening Apple’s smart phone sustainability (Wauters, 2011). In addition, Microsoft has developed a new smart phone design and will pose new challenges to Apple’s overarching market share. Still, the greatest weakness is that while Apple has leveraged market share through product innovation the open source models have been able to reengineer many of Apple’s innovations. While Apple has engaged in a series of patent lawsuits, notably a recent victory over HTC, the extent that this remains a viable strategy remains greatly questionable. Furthermore, Google’s position as a cornerstone of the Internet, coupled with the increasing coupling of telecommunication and search, could potentially allow Android to leverage compatibility with Google as a means of competitive advantage. Ultimately, the industry remains highly competitive; if Apple is unable to maintain constant innovation, its competitive advantage will quickly fade. Opportunities & Threats In addition to Apple’s strength the organization has a number of potential opportunities and threats. In terms of opportunities, Apple’s commitment to excellence presents significant potential for the organization gaining increasing market share in terms of its already existing products. Recently, Research in Motion (RIM) has experienced significant setbacks in terms of its Blackberry phone, leaving the door open for the Apple iPhone to assume much of this market share. Added to this Apple, Inc. has already designed and plans to soon release the Apple TV, there is the potential that the organization even extends beyond its current market position. Still, Apple, Inc. faces a number of threats. As noted earlier the emergence of Google’s Android smart phone, as well as Microsoft’s recent entry in the market could present a growing degree of new challenges. One also considers that Apple has gained recent negative publicity for the factory conditions of many of its Chinese manufacturing entities. Although the organization has downplayed these factory conditions, one recognizes the full extent of their conditions may be unknown and could present significant supply chain difficulties in upcoming years. Stakeholder Interest In terms of stakeholders, Apple, Inc. is a publicly traded company. As such its primary stakeholders are its stockholders. Apple’s stock has experienced tremendous growth in recent years the staggering degree of increase surely has surely delighted individuals both internally and externally. One considers that in February alone the organization’s equity valuation rose from $400 to $500, now resting at an all time high. Internally executive and employee compensation, while not specifically released to the public, is oftentimes linked to increasing stock prices and company net profits; as such recent expectations have been adequately met. A third potential stakeholder could be considered the social environment in which the organization operates, namely the United States. The recent strife surrounding factory conditions could be considered an area where Apple has failed to live up to expectations. Conclusion Ultimately, while it is recognized that Apple, Inc. has a number of weaknesses and threats that could dislodge its future market position, it remains an attractive investment option. Apple’s iPhone remains one of the preeminent options for smart phone customers. The iPad remains a strong seller and at the forefront of tablet design. In addition, the upcoming release of Apple TV is all but assured to carry with it significant growth potential for the organization. For these reasons this report recommends the purchase of Apple for inclusion in the mutual fund. References Apple computer, inc. -- company history. 2011. Retrieved from http://www.fundinguniverse.com/company-histories/Apple-Computer-Inc- Company-History.html Apple -- iphone operating system. (2011). Retrieved from http://www.apple.com/iphone/ios/ Schramm, M., 2011. Analysis: itunes holds 12.6% of the us music market. Retrieved from http://www.tuaw.com/2008/12/04/analysis-itunes-holds-12-6-of-the-us- music-market/ Wauters, R., 2011, January. Apple’s mac app store opens with more than 1,000 apps. Retrieved from http://techcrunch.com/2011/01/06/apple’s-mac-app-store-opens- with-more-than-1000-apps/ Read More