Apple is a US company whose business is the design, development and marketing of personal computers, portable digital music players, media devices, cellular phones and other personal electronic devices. Apple also develops and markets software, software services, networking services and solutions, peripheral equipment, and internet applications. The company is one of the most recognized consumer brands in the world and is poised to become the first trillion dollar company of the world. The Apple brand is so strong that it already commands a very strong brand premium. The base customers of Apple’s products span the entire world, across all demographics. Apple’s products are now household names such as the iMac, iPhone, iPad and iPod. Apple has a market capitalization of Us$ 650 million, a profit margin of 26.9%, a return on assets of 24% and a return on equity of 44%. Apple’s revenue are around US$150 billion annually, and is considered a “strong” buy by analysts worldwide.
A lot of competitors are playing catch-up with Apple, with Samsung recently launching a salvo of similar products, targeting Apple’s very market – and succeeding. Another threat is the emergence of the Android operating system which is also eating into the Apple IOS system, and may have a long term effect on Apple’s market share and dominance in the consumer electronics industry.
Apple believes that man is the master of change in the world. In their products and services, the company strives to make customers masters of these products. This vision is cascaded through all of Apple’s employees, in that all employees are made to understand the vision and strive to participate in reaching it. Similarly, its mission of bringing quality products to the world is evident in the type and level of innovation that Apple brings with each product that they release. It satisfies the need of students, educators, professionals and customers around the world for products that push the importance of technology in our daily lives.
Apple is a capitalist corporation that seeks to make profit and provide its shareholders optimum value. Apple’s strength is in ensuring that it delivers excellent products which in turn ensure that leading position in the electronics industry. Apple’s objective is also be highly competitive. It is a phenomenal success in the last 10 years, being the world’s most admired company in 2008, 2009 and 2010, owing that to a distinct out-of-the-box thinking that has led to the world now enjoying such innovatively designed products. This same distinction has made Apple one of the most profitable companies, this year posting a gross revenue of about half a trillion US dollars and a return on equity of about 44%!
Apple now seeks to further differentiate itself by instilling an honest work ethic in its organization. Apple is seeking further growth, seeking even to change its objectives from time to time to prove that established boundaries do not limit the company.
Apple has numerous competitors in the market such as Dell, Alineware, Gateway, Microsoft, Google, Samsung, Nokia, Amazon, Sun, HP, SGI, Cisco, Netgear, and others. In terms of price and quality of design, Apple strategy is to position itself in the higher priced but more elegantly designed segment of the market it competes in. Whether the product offered are personal computers, mobile phones, or music players Apple positions itself for at the premium priced level. This makes the products less accessible to lower tiered socio-economic levels but has helped Apple keep a core customer base that continuous to patronize the company’s offerings.
Apple’s competitors however, hover around the more functional and less pricey segment of the market, which Apple does not fully service. In terms of quality of products versus price, Apple positions itself on the highly priced and high quality segment of the market. Again, Apple’s competitors position themselves on the lower priced and lower quality build, to offer products at more competitive price levels. This segment of the market is not serviced by Apple.
With this positioning, Apple has kept its strong leadership position in the consumer electronics industry. Apple is the most dominant player in the United States and has maximized on opportunities that the US market has offered the company. Its ability to integrate and innovate has given Apple the ability to remain competitive despite focusing on the higher priced segment of the consumer electronics market, a segment that not a lot of players position themselves in. This philosophy is very divergent from what the competitive landscape offered to customers, that is, products that are non-differentiable and cost-competitive but has worked in Apple’s favor.
Apple is a company that will continue to grow and succeed. Currently, the company is pushing its commitment for stronger intellectual property rights, which translates to a commitment to licensing and the formation of stronger relationships between hardware and software. Apple must continue becoming an organization that learns. It could form strategic alliances with other entities having strategic competencies. Apple can work with companies that enhance their already competitive position, through a sharing of knowledge or the opening up of new platforms that would expand the company’s market dominance.
Investor Guide.com 2012. Apple Inc. Retrieved from http://www.investorguide.com/stock-analysis.php?ticker=AAPL Retrieved on September 16, 2012
Masi, B. 2009. Strategic Analysis of Apple, Inc. University of Hartford. Retrieved from http://www.scribd.com/doc/24134877/Strategic-Analysis-of-Apple-Inc-Brian-Masi Retrieved on September 16, 2012
SWOT Analysis: Where is Apple going now? SWOT Analysis of Apple Inc. 2012. Retrieved from http://www.divisiontwo.com/articleshttp://www.cnet.com Retrieved on September 16, 2012