Swot Analysis Business Analysis Part I

Muhammad Naseem Siddiqui

September 05, 2011

Apple is an American multinational corporation, established on April 1, 1976 in Cupertino, California that designs and markets consumer electronics, computer software, and personal computers. The company's best known hardware products include the Macintosh computers, the iPod, the iPhone, and the iPad. Apple software includes the Mac OS X operating system; the iTunes media browser; the iLife suite of multimedia and creativity software; the iWork suite of productivity software, among others. Fortune magazine named Apple the most admired company in the United States in 2008 and in the world in 2008, 2009, and 2010. The company profit was around $8.24 billion closing the year of 2009 (Jose Antonio Hernandez & Dr. Yuan GuoHua, 2011)

SWOT Analysis

The following is a traditional SWOT analysis of Apple, Inc, an examination of significant internal strengths and weaknesses, and external opportunities and threats, currently facing the company today.

STRENGHTS | WEAKNESSES |

* Valuable global brand * Design and innovation * Better marketing strategies * Visionary and charismatic leadership * Retail as new revenue stream | * Significant delays in launching and shipping * Denial of product defects * Compatibility issues * Customer service * In-sourcing * Secretive nature of Steve Jobs |

OPPORTUNITIES | THREATS |

* Partnership with Telco carriers * Emerging products – AppleTV, iPad, Ping * International expansion * New acquisitions | * High competition in the market * High pricing in recent economic crises * Technology advances * Changing buyer needs and tastes |

Strengths

1. Brand

(Bulik). 2. 4. Apple’s brand loyalty. several months apart. in deference to the way that they have influenced advertising.2 billion. (2010). Delays iPads featuring different connectivity were released at separate times.. due to this standard they set the benchmark for design led hardware and software products. The first time it has ever awarded any firm this title. (Hoovers).Millward Brown rated Apple the 3rd most valuable global brand in their 2010 top 100 list of most valuable global brands and estimates their brand value to be worth $83. (Bulik). 5. demanding management style. media. and her marketing strategies and also in recognition of that they have been consistently a marketing powerhouse over the last decade. (Harris. consumers were wait- . these locations currently account for 20% of their total sales. He drove his company relentlessly to make products that consumers lusted for. He widely has known for his mercurial. their influence on popular culture.” is probably Apple’s greatest asset and because of their intense loyalty their customer base tends to be very forgiving of product problems. 3. Design and Innovation One of the primary motivations for Apple’s design teams is to make intuitive products that allow users to be up and running without reading instruction books. Marketing Strategies Advertising age recently awarded Apple the title of Marketer of the Decade. Weaknesses 1. often referred to as the “Cult of Apple. Retail Market Apple recently opened 200 retail locations throughout the United States and 50 retail stores in other countries. Visionary and Charismatic Leadership Steve Jobs a visionary and charismatic Leader. 2009).

in customer service. Apple recently loosened overly stringent restrictions for developers that sought to develop applications for the iPhone and allows them to use a wider variety of computer languages with Apple’s operating system iOS.listed to receive these. 2010). Customer Service According to Forrester Research. as such fewer external sources will be involved in the development of their products. Gateway. Compatibility Issues As a reaction to a perceived threat from Google. Apple. Apple’s reluctance to acknowledge or deal with this and other product defects are a big weakness as they appear to rely upon their customers to overlook these issues. and Dell. This weakness can only lead to consumer dissatisfaction and infringement issues. (Driver & Valdes. of four PC manufacturers surveyed. so his secrets may very well be buried with him . and there were significant delays in shipping the products. (Hoovers). State of Denials Although the iPhone 4G was the highest scoring smart phone they ever tested. Steve Jobs The Brand image is tied to Apple’s founder and CEO Steve Jobs.. HP. H. Apple rated the lowest. In-sourcing Apple recently purchased a processor company and a microchip company so that they can begin designing their own CPUs and microchips.. (Manning. Consumer Reports does not recommend it due to its problems with its antenna and until Apple corrects it. 2007). and they advise their readers to stick with the 3G. Recent customer experiences with the iPhone 4G. 2. including downloading and connection problems. 6. 2010). 3. (Smart phones. indicate a weakness as Apple is still not reacting to customer complaints and delivering the superior service that should be expected. 4. 5. The weakness in this approach lies that this behavior could lead to missed opportunities for improvements that their competitors will be sure to take advantage of. (-13) compared with Dell‘s rating of (+38).

as Jobs micromanages Apple. it is feared. will die along with Jobs (Apple. 3. Additional national and international locations could increase customer satisfaction with Apple products as generally customers who visit the Apple stores have a significantly better experience than those who deal with Apple online. 2009). Partnering with additional carriers could increase sales of the iPhone’s that would in turn encourage consumers to try additional Apple products. Acquisitions Apple has acquired recently other companies. International sales Currently the United States accounts for more than half of Apple’s sales. and Ping as software for iTunes that enables social networking by allowing users to share their music with one another are the emerging products are seen as major opportunities. Emerging Products Apple’s iPad is driving demand for tablet computers. Additionally.5 million units and by 2014 sales are expected to reach 208 million units (McGuire & Baker. The company. AppleTV as a fully streaming media box. (Hoover). Customers unwilling to switch to AT&T from their current carrier are likely to forego owning an iPhone. to further her success she may consider acquiring a company that has long term success in this environment. Opportunities 1. Threats . and as they are relatively new to the consumer electronics industry and media.when he dies. projections for tables for 2010 are 19. Steve Jobs is Apple. In most people’s minds. 4. Partnerships Currently the only telecommunications carrier that Apple partners within the United States is AT&T. 2010). whereas many competitor phones can be used with multiple carriers. 2.

Buyer’s needs Apple’s products are extremely stylish. There will be another huge shift in technology coming out from Google Chrome OS and Samsung Smart phone and a real threat to Apple is that they are likely to lose out on it if they shelter themselves too much from other companies in the technology sector. 3. and it has announced that it will also be moving into the TV space that is a big threat to Apple’s market share (Jim Mueller. Pricing According to Forrester Research the percentage of customers who believe that better pricing outweighs brand loyalty has been steadily increasing. H. This is a big threat that Apple will continue to lose market share in this industry because of high pricing. 2007). The recent economic crisis has accelerated this phenomenon. By looking at the strengths and opportunities that Apple has at the moment will allow an investor to exploits the potential of the company and invest in the opportunity areas. Stakeholders Analysis .. 2010). Google is moving into Apple's smartphone space by giving away the operating system. However. Competitors Despite market share gains in recent years Apple sales are still far behind competitors in the PC market like Dell and HP. or a stainless metallic finish. but only available in white. one can extract opportunities out of external threats that Apple has that might begin new product lines. 4. (Hoovers). 2. Additionally. black.1. (Manning. which to some extent prevents consumers from expressing their individuality even at this point. Technology Advances Apple becomes more cloistered it is likely to miss out on technological advances from which it might have otherwise benefitted. The threat to limiting consumer choices is that it could backfire if this strategy persists too long and Apple potentially box itself into a corner if she change strategy too late to suit consumers.

Gartner Industry Research Group. stylish. Shareholders Apple’s shareholders are the primary stakeholders and most likely pleased with the company’s latest financials. 2009).com/portal/server. A. Reference Jose Antonio Hernandez & Dr. Marketer of the Decade: Apple. Consumers need sophisticated. R. October 18). Marketer of the year 2010. 60-62. 2009). (2009. September 16). Cowart. Retrieved from http://my. Engineering & Technology. Tammy W. Apple’s foothold in the cell phone and tablet market is secured. Apple loosens restrictions for iOS developers.pt? open=512&objID=260&mode=2&PageID=3460702&resId=1436740&ref=QuickSearch&sthkw=apple Harris.A stakeholder theory asserts that a business must consider the interests of its stakeholders when making a decision (Gibson. 2000) defines stakeholders as groups or individuals who can affect or are affected by the decisions and actions of an organization (Wade M. September 26).com/moy2010/article?article_id=146492 Driver. (2011) 2nd International Conference on Business And Economic Research Proceeding. 1998). their interests were certainly served by Apple’s tactics to secure the product line innovation and uniqueness. Cowart. and unique electronic items and gadgets with good customer services in less price. B. Tammy W. (2010. M. Consumers A second major stakeholder group to consider is consumers. Retrieved from . 4(16). Yuan GuoHua. (2010.gartner. For Apple employees. Advertising Age. Bulik. Apple needs to work hard on customer services and price competitiveness to address consumers’ needs Employees Employees invest years of their labor in a corporation – human capital – giving them a similar stake in the corporation to shareholders (Etzioni. There interests lie in increasing profitability and share values that Apple is addressing well with innovative products and services. Chumney.S. Chumney. Retrieved from http://adage. & Valdes. thus increasing job security for Apple employees (Wade M. Design at the very core.

gartner. Consumer Reports. M. Chumney. L. & Baker.xhtml?ID=ffffrtjccfjfkfckxf Manning. Gartner Industry Research Group. Apple Inc. September 12). 75(9).com/investing/general/2010/06/07/apple-strengths-weaknesses-opportunities-threats. Jim Mueller (June 7. Bodine. Topic overview: customer experience. H. Weaknesses. September 24).pt? open=512&objID=260&mode=2&PageID=3460702&resId=1440061&ref=QuickSearch&sthkw=apple Smart phones. Retrieved from http://premium.com/subscribe/co/overview. Retrieved from http://www. Cowart (2009).fool..forrester. Hoovers. (2007. M. Threats.1007/s10551-009-0234-6 . Retrieved from http://my. Tammy W. Opportunities. (2010.EBSCOhost Business Source Complete.).hoovers. S. Apple: Strengths. Journal of Business Ethics 93:471–482..com/portal/server. Retrieved from http://www. Retrieved from EBSCOhost MasterFile Premier. 2010). September).com/rb/Research/topic_overview_customer_experience/q/id/43140/t/2 McGuire.. (n. (2010. Hoover’s Company Records. Dorsey. iEthics. V. 24-27. B. Apple's iPod and iTunes updates keep pressure on competitors.d.aspx Wade M. K. Temkin. DOI 10. Forrester Research. & Geller.