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SWOT Analysis: Apple Inc. Essay

Apple Inc Introduction Apple Inc is an American multinational organization located in 1 infinite loop, Cupertino, California 95014, in the middle of the Silicon Valley. It is focused on designing and developing the personal computers, other related software products, and the electronic products such as MPH players and ‘Pods. Apple Inch’s main products are mimic, pod, phone, and its latest advanced product is pad, which is on the verge of creating another revolution after phone.

Apple Inc was founded in 1976 and since then Apple Inc has been leading the way in innovating new products, forever it has encountered numerous ups and downs since then. Apple Inc produced the first ever extremely successful personal computer. It has been always on the forefront of innovating new products; however it has often struggled to maintain the hold on the market share in the product line. Lately, Apple Inc has transformed its image from an inventive computer manufacturer to a fully fledged consumer’s electronic company.

Some facts of its success can be calculated from its sales of $13. 95 billion in the year 2005. In year 2005, Apple Inc had controlled 4. 2% of the US market in PC’s. Also, Apple pods models had controlled

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70% of the hard drive MPH player market. Apple Inc enjoys the leading share in the handset market, generating over 71% of the industry profit with 6. 5% of the international handset market. Apple unveiled its first phone on 9th January, 2007. The most recent phone, is phone AS, and it was announced on Roth October, 2011 and was released 10 days later (Papers. Com 2012).

External Analysis External environment determines the present situation of Apple Inc, and also helps find out the possible influences of the political, economical, and social and the genealogical factors on the organization. Political Factors Apple Inc has reportedly obtained 52% of its business from outside US in 2007. Due to the bad international relations, wars and terrorism might influence Apple Inc in a huge way, and also the organization has no control over these factors. Apple Inc manufactures a number of its parts and products from outside the US, like Czech Republic, Ireland, China, Korea and Cork.

The bad political relations between US and the other world have bad outcomes for the Apple Inc (Sentences 2012). Economic Factors The global economic crisis had huge impact on Apple Inc. The inflation rate went high and so did the unemployment rate in the country, and since Apple Inc products were viewed as luxury products, the customers started pending less on them. US dollar value keeps fluctuating, and thus again which have a bad impact on Apple Inc products, however the company has purchased itself foreign currencies and thus, the economic effects on the company are minimized.

Thus, Apple Inc revenue has increased in the global market (Apple Inc 2012). Social Factors Throughout the history of Apple Inc, two factors have been on the forefront of Apple Inc products, the quality and the design of the product. Thus, globalization plays a very important role in Apple’s products. As the world cannot be imagined without the SOOT Analysis: Apple Inc. By Danny market. Also, as the purchasing power of the common has risen in various markets across the world the purchasing of luxury products have gone up, for e. G. The phone, pods and the latest technology pad.

Possessing these items are considered as status symbols in many societies which have also increased the sales of Apple Inc products. Another big social influence to Apple Inc products is the rapid growth of he music industry, which have increased markets over the cyber space as well. The main virtual music store is the tunes. Thus, in all Apple products have benefited from the social factors as it has began defining a modern individual lifestyle. Technological Factors Apple Inc has invested largely in its product research and development field and thus, Apple products are at the top of the new innovative products ranking.

The technology has been fast changing in the world and the market for it has become gigantic, which has added to more and more competition and thus, as soon as genealogical change are concerned the product life cycle has been shortened drastically, which the Apple Inc takes the advantage of by introducing newer products in the market, which ultimately lead the market. Legal Factors Monika has filed various lawsuits against Apple Inc, claiming the violation of 13 additional patents by phone, pad and pod touch, this apart from US complains covering 24 Monika patents.

Also, in China Apple Inc has been fighting the battle for its right to the pad trademark. Internal Environment BRIO framework The BRIO framework can be stated as the value, rarity, immutability, and organization as whole. BRIO framework is extremely important for the internal analysis of Apple Inc organization. Resources and Competencies I Value I Rarity I Immutability I Organization I Competitive Advantage I Brand Name I Yes I Yes I Yes I Yes I Sustained I Simplicity I Yes I No I No I Yes I Parity I Hardware I Yes I No I Yes I Yes I Temporary I Software I Yes I No I No I No I Parity I The above figure shows the BRIO framework for Apple Inc.

For gaining competitive lead over its competitors Apple Inc should explore its internal as well as the external advantages, its internal advantages that Apple Inc paid attention to on developing Phone, are its brand name, advanced technology, and effortlessness of using the user interface (Pleasantest 2009).. Value The value of phone is that there are a number of advantages, like the highest technology, the fast and the easy usage, that the user can carry, all in one device when he/she purchases the phone.

Rarity The technology that has been used in making of the phone is rare and unique, which is why it has a unique design, quality, easy to use and is also a status symbol among the youngsters however, it has been experiencing slow internet connection and call roping problems, which can make Apple Inc lose some customers, which was found to be a problem in the chip that handled the call operations, meanwhile the publicity and status of owning an phone will keep the customers intact.

Immutability The phone is nearly not imitable, however there are some phones available in the companies which have seen the flaws in the phone development can refrain from committing it and thus can come up with better designs, which can be a threat to Apple Inc. For e. G. Google has released its phone T-Mobile GIG, which can be a intention to phone in the future (Pleasantest 2009)..

Organization Apple has tried its best to maintain its brand name and has been successful in doing so and thus is its biggest competitive advantage, however its flawless designs and quality are still replicable in the future and thus Apple should take advantage of applications market, however as with tunes which were the best and easiest music application, same approach would not work with phone. Thus, Apple holds a huge and stable market however it constantly needs to update on its methods and technologies to grow further. SOOT Analysis

SOOT analysis stands for Strength, Weakness, Opportunity and Threat for a particular organization, which can help in formulating a strategy for its business and can also help in analyzing its internal environment (Strengths ; Weakness) and external environment (Opportunities ; Threats). Strengths The first and foremost strength of Apple Inc is its technological edge over its competitors. Phone have turned out to be a great success and has been associated with status in many of the countries. Tunes has turned out to be a wonderful revenue generating source and since it also sells with its own tool I. The pod, thus, revenue has multiplied for Apple Inc. Another strength for the organization is that for every software that Apple Inc produces, it introduces its hardware with it too, which leads to its expertise in both the industries. Apple Inc products are classified as luxury items, thus its products provide enough room for it, so that the competitor products are no longer a competition. The another strikingly advantage over competitor’s products, is the design of the Apple products, and which are also simple to use.

The brand loyalty of its product and its super dedicated research and placement department are also its major strengths (Wharton 2012). Weaknesses Weaknesses are the disadvantages that are hindrance in obtaining the business goals for the organization. The poor relationship with the market than Microsoft is surely a disadvantage to Apple Inc. Another point could be that the products introduced by Apple Inc have very short life cycle, which concludes that the research and development department has to be constantly maintained, which requires huge capital.

Apple Inc has very low presence in the advertisements, and also it has very mall market occupation as compared to its main rival Microsoft. Thus, all this leads to the fact that Apple Inc gets very less business from its home country US, and major of its business is from outside the US. Opportunities Opportunities can affect both the present as well as the future condition of an organization. Apple Inc opportunities are the introduction of more and more PC viruses, on which Apple Inc can capitalize on.

The second opportunity is the population of the world is growing at a rapid pace and thus, this opens the front for many new markets, also the purchasing power of a common man has increased rustically, who can be pursued or impressed to buy the luxury Apple products. The online sales of the organization are increasing and also, the bonds and the partnership with the other organizations have been on the rise in the past few years. Which can be targeted in the future I. E. The young population who have a craze for any new technology gadget (Neurotransmitter. Com 2012).

Threats In the past few years, many competitors have come up for Apple Inc, especially in the field of laptops, like Dell, Sony, HP, and Toshiba. Another threat could be that many of he customers have started downloading the music for free instead of purchasing at tunes. The product expensiveness is itself a threat to the product, as substitutes at a lower price are always available. Long lasting recession could also be a threat to its products. Windows 7 software is gaining more market place after vista flopped and last but not the least, the technological advances that have been taking place every single day, is a big threat to Apple Inc.

Porter Five Force Model Porters Five force Model is a very powerful tool to understand the core of the power in a business or in a company. The Porter Five Force Model for Apple Inc is as shown in the figure: (source: Slide Share 2010) The existing rivalry is the MPH players of rivals like Sony, Samsung, other online free music stores like tunes, Alternate sources of laptops like Dell, Leno, HP etc, competition to the Mac operating system, and windows Operating system for playing videos and music.

The threats of new entrants are new entrants with the new technology, for e. G. Google with its new phone, on demand online services, and streaming audio and video with v-cast. Bargaining powers of suppliers are suppliers f the processors like MM, Intel etc, supplier of TV and various movies, other sources of music like Sony, Universal etc, and strategic alliance of the Mac of the Microsoft.

The bargaining power of the customers are customers may reduce purchasing laptops in fear of economic downturn, retailers may star pressing for lower prices, customers may download and share music with friends without paying for it, and the threat from the substitutes are satellite radio for the music, other entertainment media like OXBOW, ASS etc, alternate source found by customers for audio and video lies (Management Pocketbooks 2012). Analysis of Strategic Factors Thus, Apple Inc is known for its price strategy according to its quality and design.

The strategies Apple adopted was to lessen the size of the notebook, so as to increase the profits by 20% and also the growth was increased by 30%. Also, another strategy adopted by Apple Inc was that during the holiday time it reduced its Mac books by up to 1 5%, compared to their competitors and still they managed to make profits. Thus, it can be said that Apple adopts the strategy to compete with their competitors on fermentation rather than on cost.

This way it may take little longer to conquer the market but it helps getting stable customers and helps establish a brand name (Strategic Analysis n. D. ). Strategic Alternatives, Recommended Business Strategy and Implementation The strategic alternatives that Apple Inc can adopt are lowering the costs of the existing products in the market or else if a new product is launched, the price should be fixed a little less initially, while maintaining the same quality standards, also the design of the product should e unique in order to capitalize on ewe markets and customers.

New pacts should be signed with the other organizations, and new Joint ventures should be entertained, this helps in better marketing of the existing products and if a new product is launched, it helps in better for Apple Inc, as it is very low on the advertising. Third Strategic alternative could be introducing the concept of knowledge management in the organization.

Also, as customers mostly tend to buy Apple Inc products from its store only, the number of retail stores should be increased around the world which helps the product and the customer better reach each other and thus sales could be increased. Also, last but certainly not the least, even more investment should be made in the research and development area of the company, so as to create more and more innovative products.

Conclusion Thus it can be concluded that Apple Inc, continue to launch its innovative products in the market, and has been a luxury brand for its existing customers, and its best competitive advantage is its brand image, the quality of the product and the design, however with various analysis, like Porter five force model, BRIO framework, SOOT analysis and PESTLE analysis, helps us in analyzing the work environment of the company and what strategies can be adopted like lowering down the price of its products a bit, increasing the number of retail stores, advertising more can all be adopted to increase the sales even more in the future.

Phone has been a major revolution in the case of smart phones; however company has developed pad, which is another revolutionize technological breakthrough. Thus, a lot many strategies could be adopted to make even more and better products in the future (Bright Hand 2010).

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