Situational analysis

With having its differential qualities in its wide range of products,

Apple is regarded as a most favorable and well recognized brand for
electronic devices. Steve Jobs and Steve Wozniak brought a revolution
in personal computing. Now, Apple is the known as the world’s highly
revenue generating information Technology Company with having
biggest total assets, and the world’s second largest mobile phone
manufacturer with 115,000 employees (last recorded on July, 2015)

Apple's platinum-grade brand, closed-loop operating system,

consistent device leadership, and immense financial resources
certainly all contribute to its ability to consistently generate above-
average returns on capital. Some of these items should prove fairly
straightforward. Apple's Fort Knox-esque cash reserves allow it to buy
its way into virtually any industry that interests it. However, Apple's
closed-loop software architecture receives far less attention but is
arguably more important in terms of supporting Apple's competitive
position.

According to researchers IDC ,Global smartphone sales were largely

unchanged in 2016, after annual growth. That was a challenging
situation for Apple because the iPhone generates nearly two-thirds of
Apple’s revenue. In addition to churning out new handsets,
management quickly respond to adopt of services such as Apple
Music, iCloud and the App Store. Services revenue once again
represented the fastest growing segment, with sales jumping 18
percent to $7.2 billion in the holiday quarter.

Higher management plans makes operational strategy to lower the

costs to produce greater profit includes lowering operational costs by
installing the advanced computer equipment and enterprise resource
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planning software, hiring contractual employees to avoid paying
benefits, establishing several facilities close to your target customers,
investing in improved plant and equipment, moving to less expensive
quarters and altering the hours of operation to manufacture more or
lower the costs of keeping the company boom.

Apple gets a variety of direct and indirect channel of distribution like

retail stores, online stores, direct sales force and third-party cellular
network carriers, wholesalers, retailers, and value added resellers.
Teamwork is akey factor for Apple's success strategy. Apple Values
are the qualities, customs, standards and principles that the company
believes and they help Apple Inc. and its employees succeed. "They
are the basis for what we do and how we do it." Taken together,
identifies Apple as a unique company.

Now success of apple inc is linked to the capability of the company to

use its strengths to overcome threats and weaknesses and getting
opportunities efficiently. Apple’s always stay concerned to gives
insights on the actions of the company to maximize its growth based
on such strengths and opportunities. This SWOT analysis also
indicates the most significant issues that Apple must address. For
instance, the threat of competition is among the most notable. An
understanding of the dynamics of internal and external strategic
factors also helps investors evaluate the value of Apple’s business.
Thus, this SWOT analysis of Apple Inc. is of practical use for investors
and the company’s leaders and managers.

To analyzing and evaluating Apple Inc business framework internally

and externally here are study of SWOT and PESTLE analysis.as SWOT
is an acronym for strength, weakness, opportunities and threats.

PEST analysis measures market potential with accordance to external

factors.

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  Swot analysis
Strength Weaknesses
Advertising capabalities enhances High prices
Strong brand image and
reputation Limited product… cant meet the
need of all potencial customer
Leading innovator in mobile
device No frontier between your
community and your brand
Strong financial performance
Patent infringements
Exposure to highly growing
Chinese market. Overdependence on iPhone sales

Strong presence in pc market Weak direct distribution channels

in India
Integration of portable electronics
to life style of urban people Incompatibility with other os

Rise of laptop popularity Low expenditure of research and

development
Improving continuously human
computer interfaces

R & d and engineering

Successful brand lines

Dominance in desktop operating

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system and office productivity

Strong distribution channels

Sound financial performance with

one of the strongest cash flow

Opportunities Threats
Health related gadgets introduced Rising u.s dollar exchange rate
to the market could be nagitively effected
revenue and profit of the
The internet of things(ioT) market company
expected growth over next
decade Lawsuits on patent infringements
which can damaged brand
Mobile payment market market reputation consequently
could be expand
Data breaching risk
The mobile enterprise app market
will gain traction as more Intense competition putting
business shift toward buying pressure on market share, profit
subscription-based softwear and revenue of company

iTv launch Rapid change in technolo gy

increasing demand of iCloud Apple s map defect

services

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  External analysis or pest analysis
 Political factor

Major part of apple sale generated by outside the u.s amounting to

more than 113.8 billion dollars where the revenue from home country
is 68.8 billion dollar so every political insurgence can affect company
nagativly.

political unrest in china

worldwide risk of terrorism leaving a negative impact on company

 Economic factors

 economic crises nagetively effecting the company

 Impact of global recession

 Increasing rate of inflation

 Variations in European economy has directly affected apple

which has resulted in decreased revenue by more than 16%

 China was the hub of the manufacturing factories for Apple, but
now the labor cost in China is rising. The Chinese government
decides the minimum wages in China. official figures released by
Trading Economies reflected that wages in some areas of
Northern Hebei Province increased by 22% last year, the
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 increased labour cost directly effecting the apple s cost of
products but if company seeks for some alternatives will
expensive for the company

 Social factors

 Appe chooses china for its manufacturing operations, because of

its low labour cost, it effect the image of company morally by
decreasing job opportunities for home country, it effecting the
product appeal to some extent

 The company can penetrate the unexplored market third world

country and get new possibilities of acquiring revenue

 Litracy rate and computer studies playing a tremendous role in

brand awareness and increasing customers

 Technological fectors

 The stake of information technology is very much higher

comparatively other industrieswhich is is the best interest of the
company.

 Growing demand of smart phones and tablets minimizing the

demand of apple s popular personal computer

 The increasing cybercrime make Apple’s systems less secure and

take away one of its strongest competitive advantages its
reputation for high levels of security and safety.

 Competitors have demonstrated a strong ability to duplicate

Apple’s products and services. This means that many of Apple’s
signature services and products are no longer unique.
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Internal analysis
 Conduction of internal analysis highlights a very useful
information and details about strength ,weaknesses,
opportunities and threats.

 Brand image and identity

 Apple has been recognized by most valueable and levish

brandwith the value of 124.4 billion us dollars (by march 2016)

 Sophisticated infrastructure of supply chain

 Sophisticated supply chain infrastructure allow organization to

meet its complex global operations requirement.

 Healthy Financial performance

 Apple’s financial performance is growing raidly

 Economies of scale

 Innovation

 The boston consulting group ranked apple as a most innovative

company in its report.

 High profit margins

High profit margins compared to other industry providing advantages

in multiple ways.

Internal analysis of apple inc and weighted score

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Internal Weight Rating Weighted
factors score

ITunes music 0.15 4 0.60

store is a
better source
for revenue
generating.

Apple,s niches 0.10 3 30

audience
provides the
company with
some
insulation
from the
ditect price
competition

Revamping 0.10 3 30
desktop and
notebook lines

Low debt 0.06 4 0.24

Developing 0.14 3 0.42

own software
and hardware

Brand loyality 0.05 3 0.15

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Product 0.10 4 0.40
awareness
could be
improve by
using web
source

weaknesses

Dependendent 0.06 1 0.06

on new
launches

Slow turn 0.03 2 0.06

around against
high demand

Weak 0.04 2 0.08

presence in
market other
than
education and
publishing

Weak 0.10
relationship
with some
competitors

Weak 0.07 1 0.07

presence in
business arena

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Total 1.00 2.78

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