Since its inception in the market, Apple Inc. has remained to be competitive by offering innovative products that are highly differentiated from its competitors. Founded by three entrepreneurs that include Steve Jobs, Steve Wozniak, and Ronald Wayne as a technology company, Apple has grown to become a multinational corporation offering a variety of products that range from mobile phones to hardware and software components of computer application. To survive in the competitive environment, Apple has developed an innovative business environment and continuously introduces new products in the market. With its latest innovation that includes Apple Watch, new iPhone 8 and iPhone X, the company is expected to improve its market share in the industry. Although the company still maintains a leading edge in the market, it is necessary that it evaluates both its internal and external environment to determine its market position and develop appropriate strategies to enhance its performance. In essence, Apple is able to withstand the high level of competition witnessed in the market due to its effective marketing strategies and innovative products.
SWOT Analysis of Appl Inc.
The effective marketing strategies require organizations to evaluate their external and internal environments and develop appropriate strategies that can drive it to success. One of the strategic analysis tools that many companies use to assess their marketing environment is SWOT strategic tool (Hill et al., 2014). Ideally, SWOT is concerned with the evaluation of the strengths, weaknesses, opportunities, and threats of companies. The tools can be used to assess both the internal and external environment of Apple so as to come up with strategies that can make it competitive in the marketing environment.
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Strengths
One of the strengths of the company is its strong brand value and image in the market. The company significantly invests in the advertisement to increase its product awareness in the global market so as to remain the leading technology company for the majority of the consumers. The company has a strong financial base given its huge annual revenue and profitability over the past decades. It is also a market leader for a variety of products and services in the technology industry across the globe.
Weaknesses
Given several strengths that improve the performance of the Apple, there are few weaknesses that work against its strategic objectives. The prices of the company are higher than those of its competitors since its use premium pricing strategy. This makes it fail to attract the majority of the customers from market segments characterized with low consumer incomes. It is also worth to note that the company heavily relies on the sales of its iPhones, iPad, and Mac products. The decline in sales of these products can result in a decrease in revenues and profitability of the company. Currently, Apple is experiencing a sharp decline in the sales of some of its product lines that are core to its performance and this is a concern to the management of the company. Another limitation is that majority of the products offered by Apple are not compatible with the products of other products for the users.
Opportunities
Apple Inc. can capitalize on the various opportunities available in the business environment to improve its performance. One major opportunity for the company is to expand its operation in the service business sector such as offering software services. The company can also increase its investment in research and development to ensure that it offers innovative products to its customers. Investment in research and development can ensure that Apple comes up with new innovative products at a cost-effective cost of production. This can help improve its performance in the marketing environment. Product diversification is another area that the company can use to improve its performance in the market. Apple has the potential to increase its market presence by entering into strategic alliance with other firms. It can also increase the compatibility of its products to ensure its acceptance by a wide range of customers.
Threats
The company primary threat is the intense competition in the business environment especially from some of the emerging economies such as China and India. The company experiencing an increase in its operating cost which eventually reduces its profit margin. The loss of one of its legendary co-founder Steve Jobs has reduced the spirit of innovations in the company. The brand image and reputation of the company has also been negatively affected its actions that infringed on the intellectual property rights.
Growth Opportunity
The main issue for the company is to increase its growth opportunity in the global market. The growth opportunity is the sure way that Apple can use to improves its market share, sales and profitability as well as reduce the level of competitiveness. The growth opportunities of the company can be realized through three main ways that include product distribution, creating continued demand for the Smartphones, and creating new product lines.
Product Distribution
Distribution strategies that an organization uses can have a significant influence on its performance (Peppard, & Ward, 2016). One of the major growth opportunities that Apple can use to enhance its performance is its distribution network. Currently, Apple Inc. relies on its branches located globally to distribute its products. The company products are only maintained and sold in few selected stores and this limits its ability to reach the wider market. Based on this, it is appropriate for Apple Inc. to widen its distribution network to cover the large market.
One of the strategies is for the company to increase the number of its store outlets to reach many customers. The company can use some of the established retailers such as Wal-Mart and Tesco to distribute its products. This option can ensure that its market reaches a large customer base and thus improves its sales and performance in the market. The established businesses in various regions such as Asia, Africa, and Europe can help it increase the level of its sales and boost its performance.
Another strategy that the company can use to market its products is an online marketing strategy. Nowadays, online marketing strategies have become a major strategy for firm’s interested in reaching a large number of customers in the market (Casadesus‐Masanell & Zhu, 2013). Apple can introduce online shopping avenues where the customers can purchase its products. Also, the online marketing avenue can serve as a platform where customers of the company can interact with the company and provides various feedbacks which can help improve the performance of the company. One major impact of the online distribution strategy is that it can help the company to address the issue of its ever-rising cost and improve its profitability.
Continued Demand for Smartphone
The main problem that the company is experiencing is the decline in sales of its Smartphones. The continued decline in the Smartphones of the company is a condition that can significantly reduce its revenues in the market. The trend is evident as the demand for some of its leading products such as iPhone and iPhone is rapidly decreasing and this compromises its performance. As a result, it is necessary for the company to develop strategies that can help improve the demand for its products.
To ensure the continuous demand of its product, the company should engage in various measures such as sales promotion and advertisement to attract the customers to purchase its products (Baer et al., 2013). It should reach many customers especially from emerging markets and convince them to buy its products. This can ensure that it enhances its sales and profitability in the market. Also, Apple can invest research and development to ensure that it comes up with new and innovative products in the market. It should embark on initiatives that can help improve the features of its current products to match the needs of the future generation. It is worth to note that customers are having ever-changing and dynamic needs and thus Apple should continuously assess the needs of the customers and develop the products that can best suit their needs. The continued demand for the Apple product can also be achieved by entering into new markets. There are certain markets where the customers are still not able to access the services and products offered by the company. The company can enter these markets and improves its market base.
Although the strategies to ensure continued demand for the company is associated with many benefits such as an increase in market share, sales, and revenues, it can become difficult to achieve considering the intense level of competition. The business environment is characterized by many rival companies competing for the same customers and thus it can prove difficult to ensure the continued demand for the products of a company.
Creating New Product Lines
The other strategy that Apple should introduce is to create the new product lines. It is evident that Apple Inc. relies on few products that it offers in the market. In fact, the significant portion of its profits comes from its Smartphones. As a result, the company can suffer dire consequences when the demand for its existing product lines due to various reasons such as changes in the taste and preferences of the customers. In addressing the problem associated with dealing with few product lines, it is essential for Apple Corporation to introduce new product line from other market segments. Although it introduced Smartwatch as one of its new products, the company should consider outside the box by investing in other sectors or industries to supports its main operation. It should be noted that the company currently offers only electronics gadgets and this limits its customer’s base. Some of the notable areas that the company should consider venturing included the provision of the office suppliers to supplement its computers which are used mostly in offices. It can also venture into other industries such as financial services to reduce its risks in the electronic industries. Ideally, companies especially multinationals are nowadays looking at various means of diversification (Schilke, 2014). The use of diversification strategy by companies can ensure that an organization spreads its risks and thus less likely to suffer from losses.
Although diversification can improve the revenues of a company and reduce its risks in the market, it is often associated with uncertainties (Eden & Ackermann, 2013). In fact, entering new markets can be subject to failure and thus it is important for Apple to take care when expanding other market segments especially where it lacks adequate experience. Besides, the expansion of the product lines of the company can be capital extensive since it requires huge resources allocation. It is also apparent that when Apple enters other market segments, it can lose its focus on its leading products thus produce low-quality goods that cannot meet the needs of its targeted customers. This can eventually lead to the dissatisfaction of its customers this lead to mistrust and disloyalty of the customers.
The strategic analysis of Apple Corporation indicates that it can still remain relevant and competitive in the global market if it implements appropriate business strategies that can best meet its marketing objectives. The analysis of the organization using SWOT analysis tool indicates that it has several threats and opportunities that it can use to improve its competitive edge in the market. The current performance of the company is below its initial level when it was established. Ideally, the company is experiencing a decline in its revenues and profitability as the sales of its leading brand continue to decline. As a result, it is necessary that Apple implement appropriate strategies to counter its weaknesses and the threats that are evident in the market. Based on the opportunity that is available for the company in the market, it is appropriate that it considers the marketing opportunity provided by its distribution channel. The company can improve its distribution channel by introducing online marketing strategies to ensure that it reaches a large base of the customers. The online marketing channels can also ensure that it reduces some cost associated with the establishment of the physical distribution channel. Furthermore, it can ensure constant interactions of customers and the organization and thus creates a strong relationship.
References
Baer, M., Dirks, K. T., & Nickerson, J. A. (2013). Microfoundations of strategic problem formulation. Strategic Management Journal , 34 (2), 197-214.
Casadesus‐Masanell, R., & Zhu, F. (2013). Business model innovation and competitive imitation: The case of sponsor‐based business models. Strategic management journal , 34 (4), 464-482.
Eden, C., & Ackermann, F. (2013). Making strategy: The journey of strategic management . Sage.
Hill, C. W., Jones, G. R., & Schilling, M. A. (2014). Strategic management: theory: an integrated approach . Cengage Learning.
Peppard, J., & Ward, J. (2016). The strategic management of information systems: Building a digital strategy . John Wiley & Sons.
Schilke, O. (2014). On the contingent value of dynamic capabilities for competitive advantage: The nonlinear moderating effect of environmental dynamism. Strategic Management Journal , 35 (2), 179-203.
