SWOT ANALYSIS FOR APPLE INC.
Apple is a worldwide famous company, whose brand and products are known everywhere. Company’s customer loyalty is very high. Moreover, now it is combined with closed ecosystem that is expanding. “First, Apple now has a full range of apps, software and products that are interlinked and support each other. Second, new products and supplements will be released soon (iTV), hence expanding the ecosystem” (SWOT analysis of Apple).
The company is very innovative. In 2012, Apple was selected the most innovative company in the world for the third time.
The company has a good financial performance. Actually, it is much better than the performance of most large companies as it does not have any debts.
Retail stores are very effective and profitable. They provide direct contact with professional staff and increase brand awareness among consumers.
Apple is good in its marketing and advertising strategy (SWOT analysis of Apple).
Apple products are expensive. Nowadays, many people state that the high price is not justified. Many competitors offer lower prices for in fact the same quality.
As for the problems with software, the iOS and OS X, provided by Apple, differ from other software. Some of such dissimilarities, both in hardware and software, lead to the fact that users often prefer more flexible hardware and software (Microsoft OS and Intel hardware).
Some new products are defective. “Some of Apple’s iPod and iPhone releases had clear faults and, thus, disturbed sales of the products and firm’s reputation of superior product performance” (SWOT analysis of Apple).
Gross margin may decline in the nearest future. Actually, in the tech industry, it is among the highest. However, it is expected to decline because of the increasing prices for components and market competition (SWOT analysis of Apple).
Launch of iTV is expected to be successful step, supporting Apple TV sales and Apple products’ ecosystem.
Apple has many opportunities for market expansion. This opportunity is very high for a smartphone and tablet market, because they are growing very fast. Apple can obtain partners through acquisitions. It lacks some kinds of partners that can help to sustain company’s growth. With new partners, Apple will have an opportunity to develop new abilities and skills. Growth in mobile advertising market may bring popularity to Apple’s iAd.
Due to the raiing demand for cloud services, Apple can become a leader in iCloud technology (SWOT analysis of Apple).
A quick technological change is an opportunity, but also a problem. New goods and services are appearing every day. Apple may lack plans for new products, and it would fail the competition in such a case.
Increasing salary rates for Foxconn employees. Payment rates for Foxconn’s workers rose in 2012. The company is the leading producer of Apple products , therefore, the higher salary level for Foxconn’s employees may lead to the increase of Apple products prices, which are already high.
The growth of a serious competitor – OS Android. Moreover, Samsung becomes a serious competitor in computer, smartphone and tablet markets. The main competitors of Apple in in online music market are Wal-Mart, Amazon and Spotify (SWOT analysis of Apple).
In developing countries, Apple is unable to gain a reasonable market share, because its products are quite expensive. The company has some problems with stock prices. They are quite low. Therefore, it is a chance that some stakeholders will leave Apple.
Apple is very innovative, however, innovations decline in some product sectors.
“Apple has been hit with lawsuits in several countries around the world—most notably, Italy – over its AppleCare and warranty policies. Most recently, Apple CEO Tim Cook apologized for the company's warranty policies. All of that hurts Apple's standing in the marketplace and can turn some customers to other products” (Reisigner).
Apple’s selection of Tim Cook as Jobs’ successor was a significant event. It had a strong influence on Apple’s strategy. Cook told much about Apple’s vision and strategy in his interview in September. Tim Cook said:
There’s always a large junk part of the market. We’re not in the junk business talking about the low-end devices. He went on to say “We never had an objective to sell a low-cost phone. Our primary objective is to sell a great phone and provide a great experience, and we figured out a way to do it at a lower cost” (Tim Cook Talks About New iPhones and Company Strategy in Interview).
In fact, this means that pricing strategy of Apple is not going to be changed. They will continue to sell the products at relatively high prices, and at the same time of high quality. In fact, the release of iPhone 5c showed that pricing strategy will remain on the level of the old one. Many people expected Apple to release a cheap smartphone. However, iPhone 5c turned to be just a bit cheaper than iPhone 5 (Tim Cook Talks About New iPhones and Company Strategy in Interview).
Does a unit of market share matter if it’s not being used? For us, it matters that people use our products. We really want to enrich people’s lives, and you can’t enrich somebody’s life if the product is in the drawer (Tim Cook Talks About New iPhones and Company Strategy in Interview). Apple is not afraid of Android’s growing competition and market dominance. Cook states that Apple’s users are more satisfied with their products, and these factors are the most important (Tim Cook Talks About New iPhones and Company Strategy in Interview).
Cook focuses on innovations. He states that without innovations, a firm is likely to disappear or merge. Nokia is a good example. Therefore, Apple continues to be aimed at innovations (Tim Cook Talks About New iPhones and Company Strategy in Interview).
The top challenges that Tim Cook faces can be outlined. A very large threat is the growing competition, especially from Android’s. To cope with this challenge, Apple should continue being competitive and provide goods and services with significant advantages. Due to that, Apple will be able to attract more consumers. It is important to create and sell goods that will bring superiority over other companies. Innovations are important. It is necessary for Apple to continue its work in the same direction. With new products, it will be easier for Apple to compete in the market, especially if its competitors do not use such innovations yet.
One more challenge includes price level used by Apple. Their products are relatively expensive. This challenge is not significant in developed countries. However, developing countries show another situation. There, most people have low incomes; therefore, they prefer less expensive products and services provided by Apple’s competitors. Nevertheless, emerging markets can be a good source for Apple’s growth and a possibility to obtain new markets. To cope with this challenge, Apple can use several strategies. For instance, it can lower prices for its products in these markets. It would attract consumers who would become able to buy a desired product. In addition, Apple could use a strategy of developing specific products for developing markets. They could be less expensive or less beneficial than common Apple products, however, are of high quality and with good consumer service. Such strategy could be helpful in getting a market share in developing countries with relatively low income.
- Reisigner, D. (2013). Apple Faces 10 Threats to Future Growth, Prosperity. Retrieved from http://www.eweek.com/mobile/apple-faces-10-threats-to-future-growth-prosperity/#sthash.1Q7wpSQ5.dpuf
- SWOT analysis of Apple (2013). Retrieved from http://www.strategicmanagementinsight.com/swot-analyses/apple-swot-analysis.html
- Tim Cook Talks About New iPhones and Company Strategy in Interview (2013). Retrieved from http://www.gsmarena.com/tim_cook_talks_about_new_iphones_and_company_strategy_in_interview-news-6824.php