Apple Inc SWOT Analysis

Student: Josefina Vasquez

SWOT analysis is high valued business tool help design and develop strong business strategies by considering all strengths and weaknesses, as well as the opportunities and threats a business faces in the market. This applies to either existing and new companies or startups as part of their business plan. SWOT analysis helps companies to assess a changing market environment and respond in a proactive way.

Apple Inc. is an American multinational technology company founded by Steve Jobs and Steve Wozniak on April 1, 1976. It had 110,000 employees by 2015. The revenue was like US$53.394 billion by 2015 with an increase of 35% over 2014. The main competitors are Samsung Electronics, Amazon.com, Inc., Google Inc., Microsoft Corporation, Dell, LG, Lenovo Group, Sony Corporation, and many other computer hardware, software and internet related companies.

Apple designs, manufactures and sell personal computers among some other types of electronics and software, and also provides related services. The 50% of all company’s sales are generated by iPhone, iPad, Mac and iTunes which are the core products.

Strengths. (Internal Strategic Factors).

• Leadership position.

According to some magazines, Apple is the leading technology company in the world, besides it is the second largest mobile phone manufacturer.

• Innovative products.

This is one of the key strengths that the company has because over the years they have presented hit products after hit products.

• Design and Technology.

The design and technology the company use always have been more elegant and machine powered in order to offer the ultimate performance.

• High-profit margins.

This is a technological leader with a top brand equity and value.

• Brand awareness and reputation.

Both Forbes and Interbrand have listed Apple’s brand as the most valuable in the world in 2015. And it recognized as a significant growing brand.

• Strong and extensive U.S. distribution channels.

The company uses direct distribution channels such as direct sales force, retail stores, and its online stores.

• Advertising capabilities.

Apple uses the advertisement more effectively than its competitors.

Weaknesses. (Internal Strategic Factors).

• Overdependence on iPhone sales.

iPhone sales grew by 52% in 2015 over the previous year, this is the most important revenue source for Apple.

• Dependency and few development of new products.

Apple has only 8 products in its portfolio. Apple has a huge dependency on its products.

 

• Incompatibility.

Many of its products are incompatible with third-party software or accessories. Once a customer decides to buy an apple product, he may have to continue with Apple only.

Opportunities. (External Strategic Factors).

• Creation of new product lines.

• Expansion.

Apple is now working on Apple Car which is supposed to be ready in 2020. They have such a big expectation on it.

• Distribution network expansion.

Threats. (External Strategic Factors).

• Aggressive competition.

Apple has always had a strong competition from Dell, Microsoft, IBM and others since the launch of the iPhone and iPad. The Apple’s main rivals are Samsung and Google who work together to provide best possible hardware and software offerings in order to compete with Apple products.

• Imitation.

This is an important threat because of the significant number of firms that can easily imitate Apple’s products in design.

• The increasing labor cost in some countries.

 

SWOT Chart

Strengths	Weaknesses
Leadership position. Innovative products. Design and Technology. High-profit margins. Brand awareness and reputation Strong and extensive U.S. distribution channels. Advertising capabilities.	Overdependence on iPhone sales. Dependency and few development of new products. Incompatibility.

Opportunities	Threats
Creation of new product lines. Expansion. Distribution network expansion.	Aggressive competition. Imitation. The increasing labor cost in some countries.

Apple Inc has some many strengths that can be utilized to address the organizational weaknesses, for example, they may exploit the opportunity to expand its distribution network in order to gain more in the market. They could also evaluate the possibility of opening the incompatibility and allow integration with other technologies. A more open product could mean a new product line.

 

Inc, A. (2017). Apple Info. Retrieved March 3, 2017, from Apple.com, https://www.apple.com/about/

LLC, F. M. (2017). The world’s most valuable brands. Forbes. Retrieved from https://www.forbes.com/powerful-brands/list/

Interbrand. (2017). Best brands. Retrieved March 3, 2017, from Interbrand Rankings, http://interbrand.com/best-brands/best-global-brands/2015/ranking/