Analysis for Apple Inc. PDF

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Analysis for Apple Inc. (SWOT, PESTEL, etc.)...

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3.0 ANALYSIS FOR APPLE INC This study is conducted to assess Apple’s high performance linked to external and internal factors. This study reveals the macro and micro environmental factors that this corporation must consider to succeed. Various analysis methods have been used to review Apple’s business framework, including SWOT analysis, Porter’s Five Force Model, PESTLE analysis, IFE analysis, EFE analysis, and CPM analysis.

3.1 SWOT Analysis of Apple Inc Apple Inc’s success is attributed to its ability to utilize business strengths while overcoming the weaknesses and threats and effectively exploiting the industry’s opportunities. This Apple Inc SWOT (Strength, Weakness, Opportunity, and Threat) analysis will give insights into the business’s strategic actions and optimize its growth based on its strengths and opportunities.

3.1.1 Strength (a) Most Valuable Brand For the seventh consecutive year, Apple is ranked #1 by Interbank-with a $234 billion brand valuation. (b) Globally Iconic Apple is one of the most reliable businesses in customized and specialized computers and smart technology devices. With steady growth, it has millions of loyal customers. (c) Top Technology Any of the most innovative products that have changed the world were first launched by Apple. Apple is also determined to develop better, more proficient technology devices and craft them. (d) Brand of Choice It’s not big news that Apple in corporate offices is a sought-after company. Apple provides a dedicated business page for an organization that delivers top-quality technology solutions. (e) Proficient Research In its product designs, Apple places commitment. To better clarify consumer expectations and requirements, intensive analysis is undertaken, and more research is carried out.

3.1.2 Weakness (a) High Priced Products

Due to its premium prices, Apple’s products can be considered a luxury. For middle and highincome customers, the products are priced. Customers with low incomes can’t merely afford Apple products. Only middle or high-class people can afford their products due to their premium prices. (b) Limited Advertisement & Promotions By building loyal customers, and with minimal promotional capital, Apple has solidified its foundations. Marketing for Apple depends heavily on its flagship and iconic retail outlets. Compared to other major brands such as P&G, Coca Cola, and Samsung technology, Apple does not feel the need for excessive advertising due to its success. (c) Entering into Area of Non-Competency Apple is expanding quickly into emerging services such as online video content, streaming gaming, credit cards, engaging with dominant players such as Netflix, Disney, Citi, Chase, PayPal, etc. They may be entering areas in which they lack skills; remember the failure of Apple maps. (d) Incompatibility with Other Software They enter the Apple world when a customer purchases an apple product. Apple products do not support any other software or technology that makes them incompatible with other devices. To continue using their Apple products, customers must buy Apple apps or accessories exclusively. (e) Allegations of Tracking Users’ tracking reduces trust. Apple has been accused of using surveillance software that shows the exact positions of users on its phones. While the new edition of Apple’s phones allows consumers the right to reject tracking, once it is lost, trust is difficult to regain. (f) Unfair Business Practices Since receiving payments to make Google’s search engine the default search engine for its Safari web browser, Apple is under prosecution for unethical market practices. Competitors can’t penetrate and grow into the search engine business by collaboration between the two giants.

3.1.3 Opportunity (a) Consistent Customer Growth For years now, Apple has been leading the technology sector. They offer top quality and cutting-edge technologies that bring a revolution in the experience of consumers. Their 92%

customer satisfaction rate is incredible. For potential opportunities to win new customers and establish new alliances, Apple can still depend on the internet’s strength. (b) Qualified Professionals The analysts, developers, and design experts of Apple are a team of highly trained professionals with years of expertise in customer product branding. Apple will consistently create new prospects with the growth of their staff. (c) Expansive Distribution Network The potential for Apple Inc to extend its distribution network is essential. The distribution network that Apple has is currently minimal and leaves room for minimal growth. As it insists on building an extensive distribution network, Apple will achieve higher revenue and sales. In comparison, diligent marketing and promotions will help the business. (d) Smart Wearable Technology The world will soon be dominated by smart wearable technology. Smart wearable technology sales of products will double by 2022, according to Forbes. With 233 million-unit sales, it will become a $27 billion+ market. Beyond only Apple Watch and Air Pods, Apple has the potential to continue to expand into other wearable categories. (e) Expand Music Streaming Services In growth economies, young populations and fast economic development provide enormous opportunities for innovation. In Africa and the Middle East, Apple is also preparing to extend its music streaming services to 52 developing markets.

3.1.4 Threat (a) Coronavirus Outbreak For its production and supply chain, Apple is heavily reliant on China. Moreover, approximately 14.5% of its $274 billion profit came from China (a big Apple market). The outbreak has significantly impacted Apple’s revenues in the fiscal year 2021 and will begin to disrupt them. (b) Supply Chain Disruption Latest events also considerably impacted the activities and disturbed them. The supply chain uncertainties reported flat sales in Q2 of 2020 and declined to provide annual revenue forecasts for FY2020. (c) Apple Bullied by Counterfeits Apple has been vulnerable to using the brand name unlawfully by third world countries to market counterfeit products. Illegal dealers sell counterfeit products for the same amount as

the initial products from Apple. Counterfeit merchandise will make prospective buyers think it’s a low-quality product made by Apple. The big news will lead to unfavourable ratings for the company and poor publicity. (d) Increasing Competition While Apple has solidified itself as a brand, it still faces challenges from competitors. Brands like Samsung, Google, and Dell are offering stiff competition to Apple with technology innovation. Apple needs to implement new designs or revise its pricing strategy to keep ahead of its rivals as the competition is becoming stronger. (e) Market Penetration A significant change in the consumer penetration of other brands in the smartphone market has arisen. Android software is being used by firms such as Samsung, HTC, and Lenovo to develop new smartphones. Android has gained 72.23% of the market share, while Apple has just 24.55% of the overall market share. (f) China Tariffs A higher tariff on imports from China was levied by the US government, increasing the overall cost. Consequently, the merchandise’s profit gain is negatively affected, which will make the product more costly for consumers.

3.2 Porter’s Five Force Model of Apple Inc Apple’s strategies are focused in part on the need to address forces in the external business environment. The company’s market share, sales, profitability, and business growth capacity can be reduced or decreased by these forces. Based on Porter’s model, this Five Forces analysis refers to the following strengths or intensities of external factors in the industry environment of Apple Inc:

Threat of Substitutes/Substitution (Weak Force) 1. Moderate to high availability of substitutes 2. Low performance of substitutes 3. Low buyer propensity to substitute Bargaining Power of Suppliers (Weak Force) Competitive Rivalry/Competition

1. Moderate to high number of suppliers

(Strong Force) 1. High aggressiveness of firms

2. Moderate to an increased overall supply 3. High firm concentration’s ratio to supplier concentration

2. Low differentiation of products 3. Low switching cost

(Strong Force) 1. Low switching cost 2. Higher buyer information 3. Small size of individual buyers

alysis of Apple Inc ss of Apple Inc is related to p ductivity in handling external variables in the

organization’s remote or m management that exploit electronics and informati organization must strateg PESTEL analysis of App economic, sociocultural, business.

Bargaining Power of Buyers/Customers

Threat of New Entrants/New Entry (Moderate Force) 1. High capital requirements 2. High cost of brand development 3. Capacity of potential new entrants

cess results from strategic from risks in consumer l external factors that the ent are identified in the EL assesses the political, factors applicable to the

3.3.1 Political Factors There are primarily possibilities for external political factors in the remote or macroenvironment of Apple. The impact of governments and associated organizations on companies is demonstrated by this feature of the PESTEL analysis model. In Apple’s case, some of the critical external political influences are improving free trade policies, stable politics in developed countries, and trade disputes, especially between the U.S. and China.

3.3.2 Economic Factors Most of the external economic factors generate opportunities in the remote or macroenvironment of Apple. This feature of the model of PESTLE analysis reveals consumer and sector situations that concern companies. The following external economic factors are the most important in this external analysis of Apple Inc: stable economies in developed countries, fast development in developing countries, and increasing disposable revenues among potential customers.

3.3.3 Social/Social-cultural Factors The business of Apple is subject to the effects of social or sociocultural practices. This element of the analysis model of PESTEL points to the external social factors that influence customer attitudes and preferences. In Apple’s case, the following sociocultural factors in the remote or macro-environment are important: increasing mobile connectivity use, increased dependency on digital systems, and international anti-Apple sentiments.

3.3.4 Technological Factors The external technological factors in the remote or macro-environment of Apple typically provide the business with opportunities. New technologies and emerging changes are analyzed based on their impact on market conditions in this PESTEL analysis framework component. In Apple’s external analysis case, the following external technological factors are the most important: increasing demand for cloud services, increased technical integration within firms, the growing smartphone business, and other companies’ growing technological capabilities.

3.3.5 Ecological/Environmental Factors The environmental factors in the remote or macro-environment of Apple Inc include business improvement opportunities. Ecological developments and their impacts on industry are

illustrated by this component of the PESTLE analysis model. In Apple’s case, the following external environmental factors are the most important: the trend in market sustainability and energy efficiency.

3.3.6 Legal Factors The external legal factors in the remote or macro-environment of Apple generate risks to the business. The effect of laws or legislation on companies is demonstrated by this component of the PESTLE analysis framework. In Apple’s case, the most significant external legal factors are increasing privacy regulations and legal challenges against Apple’s policies and practices.

3.4 IFE (Internal Factor Evaluation) of Apple Inc Constructing an Internal Factor Evaluation (IFE) Matrix is an overall step in performing an internal strategic management audit. This strategy-formulation method outlines and assesses the key strengths and weaknesses in a company’s functional areas and provides a framework for identifying and evaluating relationships within those areas.

Key Internal Factors

Weight

Rating

Weight Score

1. Most Valuable Brand

0.15

4

0.6

2. Globally Iconic

0.15

4

0.6

3. Top Technology

0.20

4

0.8

4. Brand of Choice

0.10

3

0.3

5. Proficient Research

0.08

3

0.24

1. High Priced Products

0.07

2

0.14

2. Limited Advertisement &

0.05

1

0.05

Promotions 3. Entering into Area of Non-

0.04

2

0.08

Competency 4. Incompatibility with Other

0.08

2

0.16

Strength

Weakness

Software 5. Allegation of Tracking

0.04

1

0.04

6. Unfair Business Practices

0.04

2

0.08

Total

1.00

3.09

4=Superior Response 3=Above Average Response 2=Average Response 1=Poor Response Apple’s weighted score of 3.09 proves that Apple has effective strategies that can respond well to the business environment’s strengths and weaknesses.

3.5 EFE (External Factor Evaluation) of Apple Inc An External Factor Evaluation (EFE) Matrix enables strategists to summarize and analyze economic, social, cultural, demographic, environmental, political, governmental, legal, technological, and competitive information.

Key External Factors

Weight

Rating

Weight Score

1. Consistent Customer Growth

0.15

4

0.60

2. Qualified Professionals

0.20

4

0.80

3. Expansive Distribution Network

0.10

4

0.40

4. Smart Wearable Technology

0.20

4

0.80

5. Expand Music Streaming Services

0.08

3

0.24

1. Coronavirus Outbreak

0.10

2

0.20

2. Supply Chain Disruption

0.04

2

0.08

3. Apple Bullied by Counterfeits

0.02

1

0.02

4. Increasing Competition

0.05

2

0.10

5. Market Penetration

0.04

2

0.08

Opportunity

Threat

6. China Tariffs

0.02

Total

1.00

1

0.02 3.34

4=Superior Response 3=Above Average Response 2=Average Response 1=Poor Response The weighted sum of 3.34 indicates that Apple’s strategies should be useful in making use of the opportunities in the industry while at the same time dealing well with any threats.

3.6 CPM (Competitive Profile Matrix) of Apple Inc The Competitive Profile Matrix (CPM) describes an organization’s main competitors and its primary strengths and weaknesses of a sample company’s strategic role.

CPM

Apple

Microsoft

Dell

Samsung

Nokia

Weight

Rating

Score

Rating

Score

Rating

Score

Rating

Score

Rating

Score

Factors Store Locations

0.10

4

0.40

3

0.30

2

0.20

2

0.20

3

0.30

Financial Profit

0.12

4

0.48

4

0.48

2

0.24

2

0.24

2

0.24

Consumer

0.10

4

0.40

2

0.20

2

0.20

3

0.30

3

0.30

Loyalty Market

0.11

3

0.33

4

0.44

2

0.22

4

0.44

3

0.33

Penetration Advertising

0.07

3

0.21

4

0.28

2

0.14

3

0.21

3

0.21

Product Variety

0.09

2

0.18

3

0.27

3

0.27

4

0.36

4

0.36

Market Share

0.11

2

0.22

4

0.44

2

0.22

3

0.33

3

0.33

Product Quality

0.08

4

0.32

3

0.24

4

0.32

3

0.24

2

0.16

Price

0.10

1

0.10

3

0.30

3

0.30

3

0.30

4

0.40

Competitiveness E-commerce

0.06

4

0.24

4

0.24

2

0.12

2

0.12

1

0.06

Employee

0.06

4

0.24

3

0.18

3

0.18

2

0.12

3

0.18

Critical Success

Dedication 1.00

3.12

3.37

2.41

2.86

4=Superior Response 3=Above Average Response 2=Average Response 1=Poor Response

2.87

Ferguson, E. (2019). Apple Inc. Five Forces Analysis (Porter’s Model). Panmore Institute. Retrieved

from

http://panmore.com/apple-inc-five-forces-analysis-porters-model-

case-study

Gupta, S. K. (2020). Apple SWOT 2020 | SWOT Analysis of Apple. Business Strategy Hub. Retrieved from https://bstrategyhub.com/swot-analysis-of-apple-apple-swot/

Iftikhar, R. (2013). Implementing Strategic Management APPLE Inc. Retrieved from https://www.slideshare.net/raboz/strategic-management-at-apple-inc

Lombardo, J. (2019). Apple Inc. PESTEL/PESTLE Analysis & Recommendations. Panmore Institute.

Retrieved

recommendations

from

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