Apple Company Profile - SWOT Analysis & Recommendations

Introduction 

Due to the ever rising competition in businesses, many organizations have no choice but to remain innovative and come up with new strategic plans that will put them as the market leaders or maintain their position in the market. Businesses come with new strategic plans on various areas including marketing strategy, sales strategy, and branding strategy. Depending on what the organization wants to achieve with its strategic plan, the managers must ensure that an appropriate and workable strategic plan is adopted. A strategic plan is a document that establishes the direction which the company wants to take ( Grant, 2016 ). Strategic plans can be simple or complex depending on the aim of the organization. Having a strategic plan helps the managers and team members examine where they are, where they want to go and what to do to reach there. The business can still function without a strategic plan, but it will often lack a sense of purpose and direction. Developing a working strategic plan requires the organization to understand the mission, vision, action plans, objectives, long-term goals and SWOT analysis. Creating a working and effective strategic plan is an important process that leads to the development and maintenance of a fit between the objectives of the organization and the resources available. 

Description of the Organization 

The chosen organization is Apple Inc., an American multinational company that deals with designing, developing and selling consumer electronics, online services, and computer software. The company was founded on April 1, 1976, by Steve Jobs and Steve Wozniak. As the founders, they brought to the company a vision that changed the way people viewed computers. The goal of the users was to make computers that were user-friendly. Jobs and Wozniak began by constructing the Apple (I) and sold them. The first Apple produced did not have a keyboard or monitor, items which they added in 1977 ( Khan, Alam & Alam, 2015 ). The company first went public in 1980 when they introduced the first ever color graphics making the sales to hit $117 million. Apple Company did well throughout the 1980s until 1990 when it first posted the highest profits ever. The company later suffered slowly throughout the 1990s until 1996 when it people thought the company is dead. This made the company to seek the help of the former founder Steve Jobs who had by then left the company and started his own firm by the name NeXT Software. Jobs became the CEO of Apple in 2000, and this marked the turning point for the company. It ventured into many products which led to an increase in sales volume. Currently, Apple is among the best firms in the technology industry, outdoing many of its competitors in the market coverage. 

Apple Company has a wide range of products that it offers to the customers. Some of the major products include iPhone, iPad, iPod, Apple watch, Apple TV and a combination of the consumer as well as professional computer software applications ( Khan, Alam & Alam, 2015 ). Microsoft is among the biggest competitors of Apple Company. Microsoft is in the tech industry and has also joined the smartphone market. Google is also a tech company and a major competitor of Apple. It owns the Android operating system which competes with Apple phones. Other competitors include Bose, Fitbit, Samsung, Dell, and Sony mobile. Despite the stiff competition from the rivals, Apple has always stood out to be unique based on its brand image. 

Current Market Position 

For the first time, Apple’s world smartphone market share went above 50%. This was the highest market share for the company and higher than that of all its smartphone competitors combined. In the year ending 2016, the company recorded a market share of 48.5% leading all its competitors. The rising market share of Apple has been attributed to the introduction of iPhone whose demand hit a higher margin for the first time in the company. The net income of the company has also been rising at a rapid rate than all its competitors, with the three quarter 2018 reports showing the company grew by 31.8%. However, its net income still trails that of the chief competitors such as Microsoft due to product diversification. 

SWOT Analysis of Apple 

Being at the top of the brand in the world, Apple boasts of many strengths than the weaknesses. At the same time, more threats are constantly emerging due to the changing business world and the ever-increasing competition. 

Strengths 

One of the major strengths of Apple Company is its strongest brand image. Apple brand is one of the strongest and most valuable in the world. Due to the strong brand image, it is capable of introducing new products and maximizing on sales by relying on the company’s already known brand ( Khan, Alam & Alam, 2015 ). The company is known worldwide for its brand equity and most of the time it has decided not to compete with rivals on price because even though the prices of its products, especially the Smartphone’s remain high compared to its competitors, its brand image still dominates the world. The company employs a marketing mix or the 4Ps by and uses a premium pricing strategy which ensures that it always has a high-profit margin given its known brand image. 

Another strength of the Apple Company is its product design and technology. The key reason for the company’s brand image is its unique design and new technological innovation. It has an elegant design with the increased performance thus making its products meet the needs of the customers. The company has constantly been innovating in new technology areas. Due to the ever-changing technology, the firm has remained up to date with the current technology, offering its customers the latest technology in the market. It initially came with MacBook, then invented iPod, iPhone, iPad and then Iwatch ( Khan, Alam & Alam, 2015 ). Constant innovation in technology has therefore been one of the strengths of the company. Another strength of Apple is its largest market share and leadership position. It is one of the leading technology companies in terms of revenue generation. Being the second largest manufacturer of smartphones, Apple boasts of a large market share and a higher revenue generation. 

Weaknesses 

One weakness that Apple Company is facing is its high price products. The company focuses on producing products that are only affordable to the middle and high-class individuals. Compared to its competitors, Apple smartphones are among the most expensive phones in the world and can only be affordable to high-income individuals ( Khan, Alam & Alam, 2015 ). This limits its market by locking out customers from the low-class bracket from purchasing its products. Also, the products of Apple are not compatible with the third party software. When one buys an Apple product, he/she has to continue being in the Apple universe, and this can affect the purchase decision of the customers negatively. Unlike the products from the competitors which are compatible with the third party software and accessories, the incompatibility of Apple has always affected the number of people who decide to buy Apple products. Apple also lacks diversification as the company relies on a few products compared with its competitors. It has around 8-9 products in its portfolio and in comparison to the closest competitors such as Google and Microsoft, it has the least diversification. This limits its sources of revenue generation. 

Opportunities 

The best opportunity that Apple has is to venture into new product lines so that it can increase its market share and maintain a competitive advantage. There many unutilized product lines within the tech industry that Apple can venture in to increase its diversification ( Khan, Alam & Alam, 2015 ). There is a range of products such as iCloud services and application predecessors for which Apple can venture in to expand its market coverage. Because many of its competitors have a widely diversified product base, it is an opportunity for the company to also get into new areas to increase their revenue. Apple also has an opportunity to expand its distribution network. The company has had a weak distribution strategy making its products unable to reach a wide range of customers. This will help improve the company’s market share and increase revenue generation. There is a rising demand for smartphones and other technology related products amongst young people. The company should, therefore, take this opportunity to expand its distribution to reach this growing demand. Another opportunity for Apple to utilize is technological advancement. Technological advancement is always an opportunity available for the technology industry. The company can make more technological advancements by always coming up with modern technology ahead of its competitors. 

Threats 

One major threat that the company could face is the rapid technological changes. This means that the demand and interests of buyers could change in the near future resulting to product failure in the market. Due to the rising competition from the rivals such as Samsung, Apple could face stiff price competition which could result in a decline in its sales ( Wonglimpiyarat, 2012 ). Most of the products of Apple are highly priced with marketing focusing on the quality of the products and brand image. Other competitors are slowly developing their brand image, yet they sell at a reduced price. This could be a future threat to Apple because it could lose sales due to price competition. 

SWOT Analysis and Strategic Planning 

SWOT analysis is an integral part of the firm’s strategic plan process because it provides an all-around look at the current position of the company and as well as the forward-looking situation. Strategic planning involves identifying the internal resources of the company and then match them with the direction that the company wants to move over a given period ( Grant, 2016 ). With Apple aiming to be the leading company in the global market share and to become the market leader by maintaining competitive advantage, the major areas of SWOT analysis that can be included in the strategic plan are venturing into new product lines, expanding the distribution channel and producing a mixture of low and high priced products to reach the low class customers. 

To emerge as the top firm in the industry and to increase its customers within the next three years, Apple has to venture into new products areas. Utilizing the opportunities available to introduce new products into the market can help the company become a market leader over its key rivals such as Google and Microsoft and gain a competitive advantage. This is an opportunity of Apple as identified in the SWOT analysis and it is significant in improving the chance of the company moving in the direction stated in the strategic plan. Utilizing the opportunity to venture into new product lines will also eliminate the weakness of lack of product diversity and further increase its chances of remaining at the top of the industry both in market share and customer coverage. Strategic planning requires an understanding of the threats and opportunities so that even as the firm moves forward, it understands what to expect along its vision journey. 

One of the opportunities that Apple has is to expand its distribution channel so that its products can reach a wide range of customers. This is essential for the strategic plan because it focuses on eliminating the distribution barriers and ensuring that the products reach all its customers ( Wonglimpiyarat, 2012 ). To become the market leader and maintain a competitive advantage over all its competitors, expanding the distribution channel and ensuring that all the barriers are removed. This will enhance the accessibility of its products to a wide range of customers thus expanding its market base and maintaining a competitive advantage. This opportunity as analyzed in the SWOT analysis is therefore necessary for helping the company align itself and move along the strategic plan which is to become the market leader, maintain competitive advantage and expand its customer base. 

High priced products is another weakness that the company faces amid competition from other companies which produce and sell their products at a low price. Due to the high price products, the low-income individuals are locked out from purchasing the Apple products, as a result of high price products, the company loses some customers to the rivals ( Wonglimpiyarat, 2012 ). This weakness is essential for the strategic plan. By engaging in the production of both the high priced and low priced products, the company will increase its market coverage by attracting the low-income customers who have all along been locked out due to high price. This hinders the ability of the company to move towards its strategic plan and goal of being the leading company in the tech industry. To achieve its marketing goal and expand its market shares and coverage, Apple can employ a variety of marketing strategies which has been used and proved to yield positive results. This can involve target marketing strategy, marketing mix, and the 4 Ps. Due to the rising demand for the smartphones amongst the youth, Apple can employ target marketing strategy by targeting the young people who are in demand of smartphones and other technology products. It can also target college students who can use products such as laptops and tablets to do their assignments. 

Methods to Measure Success of the Strategic Plan 

The first method that can be used to measure the success of the strategic plan is financial measures. The financial measures can include an increase in total sales, an increase in the net profits and financial cash inflows ( Arasa & K'Obonyo, 2012 ). When the company records an increase in financial performance, then it means that the strategic plan is being successful. Another method that can be used to measure the success of the strategic plan is the increase in the number of customers. When the number of customers is increasing, then it means that the company is headed in the right direction and the strategic plan is working. Increase in the percentage market share is also an essential measure of the success of the strategic plan ( Arasa & K'Obonyo, 2012 ). An increase in the number of transactions, increased revenue per customer and increased company reputation are also useful in determining whether the company is moving in the right direction. 

Conclusion 

A strategic plan is a useful tool for the company to understand whether it is moving in the right direction. It sets the direction a company should follow and what is required to move the company towards its strategic goal. The strategic plan needs to incorporate the SWOT analysis of the business so that it can understand the current position and the possibility of potential future growth. Without a strategic plan, the firm will be operating without any sense of purpose and direction. 

References 

Grant, R. M. (2016).  Contemporary strategy analysis: Text and cases edition . John Wiley & Sons. 

Arasa, R., & K'Obonyo, P. (2012). The relationship between strategic planning and firm performance.  International Journal of Humanities and Social Science ,  2 (22), 201-213. 

Khan, U. A., Alam, M. N., & Alam, S. (2015). A critical analysis of internal and external environment of Apple Inc.  International Journal of Economics, Commerce and Management ,  3 (6), 955-961. 

Wonglimpiyarat, J. (2012). Technology strategies and standard competition—Comparative innovation cases of Apple and Microsoft.  The Journal of High Technology Management Research ,  23 (2), 90-102.