As a senior manager of a computer company that competes with Apple, Inc., this paper will conduct a SWOT analysis of Apple Inc. that could help me with my own strategies. The Analysis will identify roughly five factors of Apple’s Strengths, Weaknesses, Opportunities, and Threats, and will explain why each factor is relevant. It will go into explaining why each example its strength, weakness, opportunity, or a threat. After the analysis, a strategy there will be proposal as well as a product introduced to take advantage of Apple’s vulnerabilities that will help increase my firm’s market share (AIU, 2014).
According to (Apple, 2012), in the competing market, Apple has managed to control the market as a leading trendsetter by increasing its spectrum of great quality desktops and laptops. With the high innovation, it has resulted increasing sales of Mac unit sales growing to over seven million. With the launch of iPhone, it has established notoriety and sealed Apple’s prominence as an organization that is progressing on ingenious products. Apple interplays between the product and services, and this help in modifying the concealed business prototype performing in the sector. The first was tunes and now is the cinema; Apple has challenged the way music operates (Apple, 2012). With all these innovations the company has built a strong solid base, customers expect the best when they enter into Apple store. This has translated into corresponding financial success with Apple’s price doubling.
Apple Strengths, Weaknesses, Opportunities and Threats (SWOT Analysis)
Apple is considered to be having the front mover benefit in various areas that include:
Innovator association is in a settled spot and growing very fast, lack of dealing ability or feasible substitutes. There is an enormous switch price to move to the advancement to a different Operating System. Apple already has twenty times more applications in the App store because of a head start of one year, a large market and surpassing incentive inducement for investors (Apple, 2012).
According to (Apple, 2012), Apple’s hardware and software complements increase value; this is what has made Apple the best company in innovation. Apple has been as the best and the most innovative business in the world, and this is happening for the 3rd time. For example, the iTunes music and application store increased the value of iPhone. The steep assimilation gives consumers a guarantee; the Apple store provides customers assurance, outreach, and support. In addition to that, the command from factory to retail allows tighter quality control.
Customer loyalty has increased in the company because of close ecosystem, which was weak at first these factors gives the company an upper hand. Now a full range of applications, software and products are interlinked and support each other. Therefore, a combination of Apple’s expanding closed ecosystem and customer’s increases firms competitive advantages.
Strong market and advertising teams: Marketing is one of the strongest functional areas in any organization; Apple has what it takes on this area. The company has able team who can see pricier products, and creative strategy to advertise their products. Financial performance: Apple’s financial performance is one of the best among many companies. It is performing very well on its liquid assets and thus being able to float its shares in the market.
The major weakness of Apple is that it has no profitable cloud services for supplying them. This has caused the company to lose its reliability since the majority of clients cannot their emails. The company is not certain that it will sell its Operating System which it has, spent time in developing applications. This will reduce the rate at which innovation will take place slowing its pace. With the marketing of its operating system not guaranteed the company is likely to lose its income (Apple, 2012).
Apple’s products cost much more than its competitor devices, in this industry there company is experiencing fierce competition. The high prices of the products are a weakness to the company because customers can opt for similar quality but at a lower price.
Most of the Apple products are incompatibility with different operating systems. This make the company lose some customers who want to maintain their accustomed software and hardware (Apple, 2012).
Apple is experiencing a decrease in market share, because of fierce competition. Therefore, the company lacks the ability to influence its potential customers. This will cause them to jump into using Apple’s closes ecosystem products.
Apple lost Steve Jobs in 2012 and Tim Cook becomes the new CEO Scott Forestall and John Browett left the company too, and this has an impact on company’s management, which is negative.
Apple has for the last three years declined on its margin this is caused by infringing other patent rights thus losing its traits. The long term marginal decline is an indication that all is not well bearing in mind that Apple’s gross margin is one of the highest.
Apple experience from Mac book manufacturing techniques has seen the company expanding on the computer strength as a computer gaming and multimedia platform. In addition to that, Apple has given right to game developers to use their devices while creating games software’s this is likely creating huge demand for them on the application store (Apple, 2012). Twenty-one percent of all applications are games and about thirty-two point two percent of the iPhone users have downloaded at least one game. Apple’s application distribution in the I Tunes declared the commitment they have and the willing to amplify and advance the cloud services with syncing, such as mobile me and improve desktop status coinciding with other pc and Mac software.
Increasing demand for cloud based services
Apple has the ability and could expand its range of I Cloud services and software as demand for cloud services is expanding. This is an area the company can maximize on thus increasing its market share.
Apple is lacking some patents to develop certain products. The company has an option of developing new skills and competencies by obtaining patents through acquisition of other firms.
The increasing need for tablet and smart phone market is considered as an added advantage to expand its share in the growing market.
While exploring for other areas to invest, the company has advanced on its innovation, and, by launching the iTV this move will support Apple TV sales and expand on products’ ecosystem (Apple, 2012).
Apple is solidly entrenched in the customer and entertainment niche of Smartphone’s; this makes it difficult for the company expands into other preferable markets. Open source operating system and improvement could eventually out establish Apple’s closed system. Ordering more experienced companies may be able to outdo Apple the on costs and subsidies that carry said goods. With the company emerging, it is likely that, with development of superior features, Apple is considered to be under threat.
With an emerging alternative, iPhone application store is likely that, aggressive pressure on prices in Application store and reduce Apple’s capacity exercise quality command over application could hurt Apple’s characters as well as decrease their application store earnings(Apple, 2012).
The depreciation of the currency had a negative impact on the company’s financial statement. This is because; half of Apple’s earning is outside US. This caused a reduction in revenue thus decline in the company’s profit. In addition to that, Tax increases in 2013 will negatively affect apple performance in this current year.
Rapid technology change is a threat that most companies are facing including Apple. Apple was able to being new and very innovative products, but the company has not unveiled any plans for the new products.
The Company’s Strategy
The company is on a plan on how to penetrate the market; it is considering using market skimming. This is where a company launches a product and for its products to get acceptance into the market. The company is considering developing a smart phone INB Tablet; it will be have features of a phone and those in a computer. The reason to develop this product is the need we have seen in the market.
Customers are looking for portable machines, which can be used as a phone and at the same time as a computer. The company aims to launch products that will surplus the need of the customers. For example, the INB tablet will have a hand gear which will alert someone in case of any notification. It will be water resistant making it much attractive to gym instructors and the swimmers.
The tablet will be portable and very light; internet connectivity will be powered by android system and 4G it will be very affordable with different colors and design. It will sell products at relatively low prices in order to have a market share into the industry. This will be an advantage to the company because most Apple products are relatively high on the prices.
Market skimming is the best approach because we are likely to capture low and high market at the same time. While Apple only concentrates on the high market alone, this is a weakness which the company can capitalize on (Rumelt, 1991).
Another major area is on the expansion of its networking Apple has for a long time not been willing to expand its network by increasing its branches. This is a high loophole the company can maximize on reaching various consumers (Rumelt, 1991). The company is planning to have open fifty sales offices and twenty extensions offices in the first year of operation. This move will create employment to thousands of people thus gaining acceptance to the society.
According to (Rumelt, 1991), the marketing team will play an important role in lifting the company image from that of low producer to a global digital technology leader this is the main focus. The company is likely to seal a deal and establish a new organization to deal with its integrated global marketing activities. We have gone ahead and sourced Eric B Kim, who used to work at IBM, has been recruited to lead the Global Marketing Department. The company has unveiled a series of corporate branding campaigns and the slogan. One of the companies’ major global branding strategies is Olympic sponsorship. The company is likely to receive an opportunity to participate and be among in the Olympic Partners.
In addition to that, the company has strategized on sponsoring golf. This move is likely to contribute majorly to global branding. The company has in mind that, a great golfer is likely to increase brand value and the reputation of the sponsor. The company has decided to sponsor Seri Park because he is the best candidate, and is in a good position in marketing the organization (Rumelt, 1991).
The focuses on the Movies have taken a significant role in strategizing company marketing activities. For example, the company has shown its products such as its monitors, TVs, mobile phones, through product placements in many Hollywood movies. We have approached the Warner Brothers, the Hollywood studio that makes the movies and we are among the companies to develop a new Matrix Phone (Rumelt, 1991).
Innovative Designs and Products
The success factors of the company will be on innovation and designs. The company will develop a unique but a user friendly designs that will be integrated with innovative product concepts (Gershon, 2009). The strategies are under way, to expand on the tablet which will be the fast product. The expansion will be determined on how this product will be accepted in the market. The designing teams have already developed several unique designs which will make the computer easy to distinguish. The company is fostering to development a dual phone, which will have an external display window to the clamshell type phones.
Operating System of the Product
Factors that are making it easy for the company and electronic manufacture to penetrate the market because of minimal entry barriers (George, 2004). With the minimal entry barriers, they are likely to favor Android because low costs and free license while entering the OS market.
Considering the U.S market, the company will use the Google Android; the reason to use this OS is because of the constant growth it has shown. Most of the players are losing the market because of poor products. For example, windows mobile phone shows extreme lack of innovation. Blackberry on the other side serves a large business with high security but reduced consumer features. Apple has its growth because it has created a mass market of consumer entertainment Smartphone’s. Smartphone’s Android’s are open handset Alliance open access to all other carriers (George, 2004).
The company will employ systems which will help in collecting customers’ complaints and compliments. The complaints should be received in a positive way and should form the basis of knowing what best the company is doing. Customers should have the freedom of criticizing the company’s products. Companies employees should be well remunerated and motivated this will help in gathering relevant company information even when they are off duty. In addition to that, they will be marketing the organization.
The management should develop of organizing meetings with their staff. The basis of the meeting should be to focus on the progress they are making. Any issues raised during the meeting should be addressed and solution developed.
It is important for the organization to create an emergency department; this department will deal with issues which are raised by the customers. The company will develop a free maintenance department where customers will bring their computers for a checkup in case there is an issue.
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