Apple Inc. SWOT Analysis

Introduction

SWOT analysis is essential when studying a company’s business environment and strategic position. According to Gurel (2017), SWOT analysis evaluates internal and external business potentials and limitations; hence it is the most critical resource for company records and information. However, the future of Apple Inc. can be determined by measuring its strengths, weaknesses, opportunities, and threats to enable the company to propose strategies to address its vulnerabilities to enhance an outstanding market share.

Company Background information

Apple Inc. is a multinational corporation based in America. The company manufactures, designs, and sells consumer electronics, personal computers, and software and provides related services (Levy, 2021). The most successful services and products of Apple Inc. include iPad, iPhone, iTunes, and Mac. The company has grown rapidly after iPhone smartphone’s introduction since the iPhone generates more than fifty percent of the company sales, and Apple Inc. is ranked the most valuable brand globally.

Strengths

The SWOT analysis determines the strengths that enable Apple Inc. to overcome its weaknesses and utilize opportunities to withstand threats within the business technology (Smithson, 2021). Strengths mainly address internal factors that influence the firm’s technological capabilities, as presented below.

  • Valuable brand: Apple Company manufactures various products such as operational software, computers, mobile phones, and related accessories (Odaymat, 2021). The brand is known for quality products that differentiate them from other competitors.
  • Brand Choice: Apple brand is demanded in most corporate offices since it offers high-technology solutions.
  • Proficient research: The company is dedicated to intensive research to be equipped with customer needs, requirements, and demands to design its products effectively.
  • Brand leader: Apple Inc. is the leader in global product diversification.

Weaknesses

  • Premium Prices: Apple products are priced for middle- and upper-class consumers; hence, low-income users cannot afford the effects due to high prices.
  • Incompatibility with other software: Most Apple products do not support other technologies or software, making them incompatible with other accessories.

Opportunities

  • Qualified professionals: The company has highly qualified and skilled professionals with years of experience designing consumer products.
  • Expansion of music streaming operations: The firm already plans to expand its music services in emerging markets in the Middle East and Africa.
  • Consistency in Customer Growth: The company has a ninety-two percent customer retention rate due to top-quality products and technology, which offers a practical consumer experience.
  •  Expensive Distribution Networks: Apple uses a distribution network that provides little room for growth; hence, creating an expensive network will allow the company to generate more sales and revenue (David, 2021). It can also benefit from effective promotions and marketing.
  • Innovative Smart Wearable Technology: For the company’s effective growth, Apple has an opportunity to develop Air pods and Apple watches into wearable items.
  • Utilization of artificial intelligence: The company should extend its Al portfolio to utilize its artificial intelligence and have a solid market base or position.
  • Green Technology: The company has not focused on sustainable technology by providing eco-friendly products.
  • Self-driving software technology: Automation is increasing, and Apple can provide more self-driving technology than a fully functional electric car.
  • Kia Motors improves Apple driverless cars: The company has an alliance with Kia Motors to develop driverless cars in Georgia.
  • Development of low-priced products: Since the company has dominated the market with high-priced products, it can develop products that will accommodate low-income consumers and gain more profits.

Threats

  • The outbreak of Coronavirus: Since the company depended on China for production and supply chain, the pandemic has greatly affected Apple’s sales since a large part of its revenue came from China (Kurita et al., 2021).
  • Counterfeit Bullies: Illegal dealers selling Apple counterfeit products make customers believe they are Apple’s original products.
  • Increasing competition: Apple Inc. faces threats from competitors forcing the company to revise its policies and launch new technology
  • Market Penetration: Other competitors have adopted Android software to penetrate the market when developing new smartphones.
  • China Tariffs: Imposing high tariffs on products imported from China may increase product prices for customers and affect its gross margin.
  • Backdoor Mechanism: Apple has been a victim of backdoor operation in unlocking the iPhone’s encryption and granting access to its information.
  • Lawsuit: First class action filed on Apple severely affected the company and forced its customers to adopt newer versions without prior knowledge, affecting Apple products’ resale value.
  • Monopoly criticism of iPhone’s app store: The Company charges a thirty percent cut commission for in-app purchases which is significant for app developers.
  • Premium pricing: Intense competition from competitors who value low-income consumers
  •  Supply Chain Disruption: The current events have affected the company’s operations. This is due to uncertainties within the supply chain.

 Conclusion

SWOT analysis should be considered an essential tool to determine the future and progress of Apple Inc. The analysis helps to analyze the company’s strengths, weaknesses, opportunities and threats. From the above discussion, the company opportunities and threats have the same range and should have a new strategy to reduce the threats. On the other hand, strengths are more than weaknesses, which is the company’s solid foundation.

References

David, J. (2021). Retrieved 4 April 2021, from https://howandwhat.net/swot-analysis-apple/

Gürel, E., & Tat, M. (2017). SWOT analysis: a theoretical review. Journal of International Social Research10(51).

Kurita, J., Sugishita, Y., Sugawara, T., & Ohkusa, Y. (2021). Evaluating Apple Inc Mobility Trend Data Related to the COVID-19 Outbreak in Japan: Statistical Analysis. JMIR public health and surveillance7(2), e20335.

Levy, S. (2021). Apple Inc. | History, Products, Headquarters, & Facts. Retrieved 4 April 2021, from https://www.britannica.com/topic/Apple-Inc

Odaymat, R. (2021). (PDF) MARKETING PLAN FOR APPLE INC. Retrieved 4 April 2021, from https://www.researchgate.net/publication/333465587_MARKETING_PLAN_FOR_APPLE_INC

Smithson, N. (2021). Apple Inc. SWOT Analysis & Recommendations – Panmure Institute. Retrieved 4 April 2021, from http://panmore.com/apple-inc-swot-analysis-recommendations