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

. Weaknesses 1. (Harris. several months apart. 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.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. He widely has known for his mercurial. He drove his company relentlessly to make products that consumers lusted for. and her marketing strategies and also in recognition of that they have been consistently a marketing powerhouse over the last decade. Apple’s brand loyalty. due to this standard they set the benchmark for design led hardware and software products. 2009). demanding management style. Delays iPads featuring different connectivity were released at separate times. 5. 3. (Hoovers). these locations currently account for 20% of their total sales. in deference to the way that they have influenced advertising. 2.2 billion. (Bulik). consumers were wait- . Retail Market Apple recently opened 200 retail locations throughout the United States and 50 retail stores in other countries. (Bulik). often referred to as the “Cult of Apple. The first time it has ever awarded any firm this title. (2010). Marketing Strategies Advertising age recently awarded Apple the title of Marketer of the Decade. their influence on popular culture. Visionary and Charismatic Leadership Steve Jobs a visionary and charismatic Leader. 4.” is probably Apple’s greatest asset and because of their intense loyalty their customer base tends to be very forgiving of product problems. media.

of four PC manufacturers surveyed. in customer service. 2007). H. 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. 5. Apple. including downloading and connection problems. and there were significant delays in shipping the products.. (Hoovers). HP. Recent customer experiences with the iPhone 4G. 3. 2010). Gateway. (Manning. This weakness can only lead to consumer dissatisfaction and infringement issues. 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. In-sourcing Apple recently purchased a processor company and a microchip company so that they can begin designing their own CPUs and microchips. Consumer Reports does not recommend it due to its problems with its antenna and until Apple corrects it. 2010). Steve Jobs The Brand image is tied to Apple’s founder and CEO Steve Jobs. as such fewer external sources will be involved in the development of their products. 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.listed to receive these. 4. (Driver & Valdes. 2. 6. so his secrets may very well be buried with him . (-13) compared with Dell‘s rating of (+38).. and Dell. indicate a weakness as Apple is still not reacting to customer complaints and delivering the superior service that should be expected. Customer Service According to Forrester Research. State of Denials Although the iPhone 4G was the highest scoring smart phone they ever tested. and they advise their readers to stick with the 3G. Apple rated the lowest. Compatibility Issues As a reaction to a perceived threat from Google. (Smart phones.

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

Stakeholders Analysis . 2. 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. However. 4. 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. Competitors Despite market share gains in recent years Apple sales are still far behind competitors in the PC market like Dell and HP. 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. (Hoovers).. Additionally. 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. 2007). Google is moving into Apple's smartphone space by giving away the operating system. 3. 2010).1. but only available in white. The recent economic crisis has accelerated this phenomenon. black. or a stainless metallic finish. which to some extent prevents consumers from expressing their individuality even at this point. Buyer’s needs Apple’s products are extremely stylish. Pricing According to Forrester Research the percentage of customers who believe that better pricing outweighs brand loyalty has been steadily increasing. Technology Advances Apple becomes more cloistered it is likely to miss out on technological advances from which it might have otherwise benefitted. one can extract opportunities out of external threats that Apple has that might begin new product lines. (Manning. This is a big threat that Apple will continue to lose market share in this industry because of high pricing. H.

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

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