APPLE INCORPORATION SWOT ANALYSIS AND RECOMMENDATIONS
Apple, just like any other company, have its success directly linked to the ability to use business strength and exploit opportunities that are in the industry, while also being able to overcome weaknesses and threats that are presented by the same market. Therefore, a SWOT analysis is used to analyze the company strategies in maximizing growth based on strengths and opportunities, weaknesses, and threats.
Strengths. They are internal factors that are specific to Apple Inc. that enables the company to overcome weakness and withstand market threats while taking advantage of opportunities.
- High-Profit Margin. The generic competitive strategies and the growth of Apple Inc. are heavily based on rapid innovation, enabling the company to keep up with modern technology for competitive advantage.
- High-Profit Margins. Apple’s marketing mix involves premium pricing that brings in high hand profits, with the internal strategic factor able to maximize on profits even when the sales volumes are low.
- Favorable Brand Image. Apple stands as one of the most valuable brands in the world, making it able to introduce products that are profitable just by its sharp brand image.
The analysis shows that the company’s strengths are competitive, making the firm to enjoy a continuous period of market leadership.
Weaknesses. They are the internal factors that act as obstacles to the growth of Apple Inc.
- High Selling Prices. The high prices of Apple only attract consumers from high-income economic brackets. In turn, the high product prices lockout middle and low-income earners from purchasing Apple products. As a result, they opt to buy products from other companies with affordable prices, leaving Apple with limited sales.
- A limited network of distribution. Due to the Apple policy of exclusivity, the company has limited distribution channels and networks. For instance, Apple has to carefully vet and authorize their product sellers, limiting the number of products in the market.
Apple’s high pricing and distribution channels act as limitations and weaknesses to the growth of their business.
Opportunities. They are the factors outside Apple that are available for exploitation by the company. The opportunities imply that Apple has significant opportunities for continuous growth in the competitive market.
- Rising Demand Leading to High Sales Volumes. When the company engages in more aggressive marketing strategies, particularly in the mobile device products, the firm has the opportunity to increase sales volumes of the products.
- Distribution Channel Expansion. Despite having limited distribution networks as a result of its distribution strategies, the company still has the opportunity to expand the systems and increase the number of products in the market, growing sales volumes.
- New Product Development. The continuous innovative strategies at Apple means that the firm has an opportunity to explore develop more products as the current product lines have seen significant success in the market, while also supporting growth in international markets.
Threats. They are the factors outside Apple’s control that affect its business performance. The threats indicate that competition and increasing cost of labor pose a significant threat to the firm’s growth.
- The threat of imitation and piracy from local as well as international firms that tend to copy and reproduce the deigns of Apple products such as mobile devices.
- The aggressiveness nature of firms in the computer industry poses a very high threat in the form of competition to Apple’s business growth. The majority of firms in the same sector apply rapid innovation, representing a direct completion of the business model, such as Samsung.
- The high cost of labor. Globally, the cost of labor is increasing daily. Manufacturers that are contracted by the firm end up pushing prices higher, further reducing sales volumes as the middle and low-income earners get locked out of the market base.
Of the three forms of merging and acquisition, it is a recommendation from the SWOT analysis that the firm adopts the vertical merging and acquisition. The vertical acquisition will mean that Apple Inc. acquires business operations such as suppliers to have and control access to several stages of the supply chain. The acquisition will enable the company to reduce production costs that will reduce product prices and eventually increasing market competitiveness. Besides, the firm will be able to control the increasing labor costs of such acquired business and increase its distribution channels.
For instance, Qualcomm makes chips that Apple uses. Acquisition of Qualcomm by Apple will make it control the parts and the end products. Therefore, it will lead to reduced overheads and low production costs. The move will bolster the efforts by Apple to create its unique solutions by generating efficient power management chips that will improve products such as Apple Watch, which is one of the opportunities that the computer and mobile industry present to the firm for exploration. The firm will also be able to reduce the product prices as a result of low production and labor costs, which will, in turn, increase sales through increased distribution networks, and finally beating the primary threat in the form of competition in the industry.