SWOT Analysis for Apple Inc.

SWOT Analysis for Apple Inc.

Strengths

1. Strong brand image

Apple is among the most reliable and most valuable brands on the planet. As such, it can introduce profitable new product lines quickly, alluding to the virtue of its strong image.

2. High-profit margins

Apple’s 4P focuses on premium pricing strategy, which yields massive profit margins. The strategic factor severs as a major strength as it maximizes profits regardless of the sales volume at a particular time.

3. Effective rapid innovation processes

The intensive growth approach and generic competitive approach of Apple focus on effective rapid innovation that prompts it to keep up with the latest technologies, which is a tremendous competitive advantage.

4. Great R&D

Apple can undertake innovation as well as introduce new services and products. Apple has been able to improve its existing offerings through Research and Development hence has stayed ahead of its competitors.

5. Sustainability made Possible through Liam

The ability of Liam to recycle or pull apart old iPhones is impressive. The technology can detect and remove components from tiny screws to cooper and gold elements in parts such as the camera (Jurevicius 20). The element is an alarming strength as it encourages customers to build trust with the company.

6. Loyal Customer Base

The loyalty base of Apple Inc is stronger than its competitors as they rarely switch to other brands. The company offers unique customer experiences, innovation, and simplicity.

7. Unique ability to design and develop proprietary hardware, software, applications and services

The Apple’s ability to design and build its software, services, hardware, and application enables it to introduce innovative, easy-to-use, and unique products and services for it customers is a massive strength of the company,

Weakness

2. High selling prices

High pricing is one of the elements that enable Apple to incur high-profit margins and stay in the market. However, price-sensitive customers are switching to other brands such as Samsung and Dell, who have similar specifications and charge lower rates.

3. Dependence of sales on high-end market segments

Due to the high pricing strategy of Apple, it heavily depends on the transactions within the high-end sections of the market. Products of prices only attract middle as well as high-income earners and prevent low-income earners from purchasing, yet the low incomes are the majority of the population in the world.

4. Incompatibility with Other Software

Most customers complain that Apple devices, especially smartphones, are not compatible with other phones such as Android.

5. Narrow Product Line

The product portfolio of Apple has seven products, which are a limited amount compared to its competitors, such as Microsoft, Samsung, and Dell. Each of its products is part of its general revenue, and failure of either of the products can adversely impact the company’s revenue stream.

6. High Customer Expectations

Since Apple has revolutionized the technology market, customers expect software and hardware updates in all updated versions of its services and products. Apple finds it challenging to maintain such customer expectations.

Opportunities

1. Expansion of the distribution network

Apple has the opportunity to expand its distribution network, primarily through online means. This will enable it to gain more customers around the world.

2. Higher sales volumes based on rising demand

Apple Company has a golden chance of increasing the size or scope of its sales. Through aggressive marketing, the company can make huge sales of its products, especially mobile devices.

3. Development of new product lines

Apple Inc can expand its network of distribution in the global market because it’s brand is highly trusted and known all over the world.

Threats

1. Aggressive competition – in smartphone, laptop and streaming services

The most prominent threat to Amazon is its competitors. Streaming devices such as Amazon, Google, and many others prompts Apple to occupy only 15% of the market share (Jurevicius 24). Dell is a computer manufacturer that provides the best laptop model, such as XPS. Moreover, HP provides quality affordable laptops, which is also providing stiff competition to Apple Company. Other companies such as Samsung, Sony, and many more manufacture quality smartphones- an alarming threat to Apple Inc.

2. Imitation

Imitation is a significant threat to Apple since several multinational and local companies imitate the features as well as the design of products and services, which are initially provided by Apple Inc.

3. Rising labor cost in various countries

Contract manufacturers usually incur issues related to high labor costs, which create adverse consequences for both manufacturers and consumers. For example, due to the high cost of labor, China manufacturers push selling prices to be higher; if not, they incur low-profit margins.

4. Customers are getting bored with continually updating their phones. This is called phone fatigue

Apple usually expect customers to continuously update phones to fix the issues that existed in the previous versions. Apple Inc. finds it challenging to convince customers to update their phones consistently because it is tiresome as others may opt to buy other brands that do not require constant updating.

5. Product cannibalism

Since certain products resemble in functionality and design, the cannibalization of Apple products is entirely possible. Before the release of the iPad, there were estimations that it would cannibalize close to 11% the same from iPhones and iPods.  While several generations of Apple devices cannibalize sales of older generations, the element of cross-product interference is an alarming threat.

Porter’s 5 Forces

Competitive rivalry or competition: Strong force

Companies such as LG and Samsung compete with Apple aggressively. Such moves are visible in advertising, imitation, and innovation, imposing strong force within the environment of the industry. For instance, different companies manufacture similar apps that are ready for iOS and Android devices; hence, customers can switch to other brands to secure products with the same features.

Bargaining power of buyers or customers: Strong force

The strong force of bargaining power hugely affects due to a series of external factors such as a low number of individual buyers, low switching costs, and high buyer information (Ferguson 4). Porter’s Five Forces assert that switch conditions may weaken customers within the individual category.

Bargaining power of suppliers: Weak force

The weak force within the bargaining power occurs due to external factors such as high to moderate supply level, high to a moderate number of suppliers, and the high ratio between supplier concentration and form concentration. In Porter’s analysis, the general high suppliers’ number presents a weak force against the company.

Threat of substitutes or substitution: Weak force

Substitution affects Apple’s consumer electronics, computer technology, and online business services due to external forces like low buyer propensity considering substitutes, high to moderate substitute’s availability, and the substitute’s low performance. Porter’s Five Forces asserts that the external forces plunge moderate to low force within the industry and the company (Ferguson 8).

Threat of new entrants or new entry: Moderate force

Some of the external factors that prompt Apple to experience a moderate effect in the new entry are high capital requirements, costly branding developments, and high potentiality of new entrants. While elements such as establishing a business that competes with Apple is expensive, large firms such as Google have already made new entrants.

KSF

• Brand Loyalty, stronger brand image than competitors, unique and high-quality products

One of the critical success factors of Apple is brand loyalty. Most of the company’s customers are unable to switch to other brands since it produces quality products that provide customers with unique experiences. As such, Apple increases its market share significantly.

• Past Innovative products, iPod, iWatch, and Apple Pay

Apple has had an exceptional innovation of its products since history. Its significant innovations were iPod in 2001, iPhone in 2007, the iPad in 2012, and Apple Pay in 2014 (Farooq 15). The quality features of Apple watch and Apply pay, for instance, has since it provides an elegant experience to its customers where simplicity and interface resides.

• Exceptional ecosystem to complement the product and meet the client’s needs

Apple Company possesses a legendary focus on the experience of customers. All the customer touchpoints, be it ads, retails stores, webs