You are on page 1of 4

Apple SWOT analysis

Strengths Technical savvy Product lines are easy to use and stable. Recent integration with Microsoft products lines and Intel processors demonstrate ability and willingness to adapt t o a d i v er s e c u s t o m e r b a s e. S u c h i n n o v a t i o n , h o w e v e r , w o u l d n o t b e sustainable without a learning environment tolerant of mistakes. While the pure technical expertise alone is not a valuable or rare resource, it becomes very costly to imitate when it exists within the socially complex, entrepreneurial culture of Apple. Financial vitality Cash reserves remained robust and stable despite stagnant market share growth in the computer hardware and software arenas. Apple exploited this by resisting market pressures to reduce costs, tightly integrating alliances (i.e. product securing packages, the and of forming all strategic music backing major

distributors in the support of iTunes). Brand loyalty The only way that Apple could maintain the financial vitality described a b o v e i s v i a a f a n a t i c a l , almost cult-like, affair with its customer base. Such

brand imitate.

loyalty is extremely costly and time-consuming to

Weaknesses Market share Apple has historically been

s t r o n g e s t i n t h e U S g e o g r a p h i c a l a n d educational vertical markets. With the educational market facing tightening budget constraints and the US approaching a PC saturation point, Apple may need to burn cash more quickly and succumb to market cost pressures on its products without a strategic innovation, integration, or divesture.

Opportunities Consumer electronics With the startling success of the iPod and iTunes, Apple entered the consumer electronics market. By expanding the iTunes concept to downloadable mobile phone features and movies (podcasts), the door is now open to develop alliances new and p o t e n t i a l l y p er i p h e r a l stereo, etc.) profitable component and media strategic with home

m a n u f a c t u r e r s (speaker,

transmission giants (Disney, TBS, Verizon, etc.).

PC hardware and software market growth With crosslicensing of operating system platforms in place, Apple entered the high-volume dominated by business environment PCs. The traditionally Windows-based

introduction of Intel-based processors prompted b u s i n e s s e s t o r ep l a c e P C s w i t h i M a c s . T h e y d i d t h i s t o g a i n a level of stability and reliability in their business applications that PCs failed to provide. An example is Japans Aozora Bank Ltd., who is replacing 2,300 PCs with iMacs. (Wingfield) Apple must establish themselves as a credible player in business desktop applications to overcome the desktop publishing stereotype. Threats Legal risks In a market that literally changes at the s p e e d o f t h o u g h t , p a t e n t a n d copyright infringement risks remain high. As long as operating systems and support software packages continue to converge and remain relatively easy to imitate, present and f u t u r e l a w s u i t s a r e inevitable. The Apple records claim against iTunes r e m a i n s unresolved. Competition This threat occurs primarily on two fronts: PC hardware/software and consumer electronics. For the same reasons discussed in the opportunities section, the threat of imitability (cloning, pirating, etc.) increases. As relative newcomers to the consumer electronics arena,

will

Apple

retain

competitive (speakers,

advantage home

as

they

diversify

their

offerings

entertainment

systems, etc.)?

Conclusions

I feel that Apple must focus on several key aspects to continue to grow and succeed. They must continue a stable commitment to licensing, push for economies of scope between media and computers, and become a learning organization. Apple apparently made a commitment to licensing. Although it should continue, Apple may want to consider other forms of strategic alliances. An equity strategic alliance may offer Apple the opportunity to obtain additional competencies. An effective way for a company like Apple to accomplish this would be in the form of a joint venture. Apple should continue pushing the new line of media-centric products. Meanwhile, Apple should not lose focus on its computers. Macintosh computers were 39% of Apples sales in 2011. This very innovative company exploits its second-mover position. In the future, they will need to continue innovating to expand the b o u n d a r i e s o f b o t h m e d i a a n d computers Based on the actions of the organization, I think that the mid-term performance of Apple will be strong. This period allows Apple time to overcome their challenges if they move swiftly. For this reason, I feel that they will continue to succeed and will continue to outperform their peers.

You might also like