Abstract
Apple Inc is one technology-based company that has dominated the ICT industry for quite some time. Their success, inspired by C.E.O Steve Jobs, has mainly been attributed to breakthrough technological gadgets such as the iPod, iPhone and now the iPad among others. The huge market share that Apple enjoys in America and abroad can be cited as the most likely impetus to this companyās growth.
This paper draws a SWOT analysis of Apple to determine its strengths, weaknesses, opportunities and threats. As a competing company, the knowledge of our rival would assist us to capitalize on any weak points that we find in the analysis. The second part of the paper shows how to strategize in order to succeed in this competitive industry.
Introduction
A SWOT analysis is usually an environmental scan to find out the internal and external factors of an organization with an intention of coming up with a strategic plan and therefore is a vital part of the process of strategic planning.
The different administrative factors that are considered in-house to the company are generally considered as either strengths or weaknesses while the different external environmental aspects are considered either to be opportunities or threats (Bradford, 2000).
This kind of scan enables the strategist to match the companyās abilities and resources in a competitive industry. Using information derived, competitors can identify key areas where their rivals have failed in or are inadequate and carve them out as a niche. The following is thus a SWOT analysis on Apple Inc.
Strengths
Apple, being a giant technological company has many strengths. The first and quite obvious is the brand name that Apple has built for itself. Perhaps the best example of how strong a brand name Apple is the fact that it recently sold 3 million iPads, in the US alone, within 3 months.
Apple customers usually anticipate their products long before they hit the stores and on the day after launch, they queue to buy them. Actually, customers believe that Apple makes the ācoolestā products therefore buying anything made by Apple (Olive Publications, 1997).
This huge customer base is another strength Apple enjoys. It is estimated that Apple sold at least 8.7 million iPhones in the quarter ended December 2009 which was a 17.6% increase from sales in the previous quarter. This is indicative of a good customer base judging that 2009 was a bad year since the economy was climbing out of a recession.
These amazing sales even in Macintosh (Mac) which had its sales at 3.4 million in the same quarter and judging that the cheapest Mac is priced at $ 1,000 also prove that Apple has quite an effective marketing strategy. Total sales for Apple in the quarter amounted to $ 15.7 billion, which even for Apple was a record. These figures are indicative of a company that knows how to market its products (Stephen, 2004).
Apple also has developed good business partnerships with strong companies like Intel and AT&T which counts as a strength since these companies are also doing well and enable the company build great products and reach more customers.
Finally, Apple enjoys experienced personnel who are able to predetermine the needs of consumers and packaging them in wonderful products. Employees at Apple are highly skilled led by C.E.O Steve Jobs who is a huge asset. These are just but a few of the strengths that are responsible for Appleās success.
Weaknesses
Perhaps Appleās main undoing has been its pricing. While some may argue that the exorbitant prices that Apple offers for its products are good for giving the perception of āqualityā, high pricing shuts the door on a huge market that prefers low-end prices.
A good example was the slashing of the entry price of the 8GB iPhone from $199 to $99. This price cut in less than a month made initial buyers cheated of their money and it raised eyebrows on Appleās pricing policy.
Another setback that Apple periodically faces is that of technological flaws in its gadgets. While other competitors produce almost 100% incident free gadgets, Apple has had to suffer technological glitches in products such as the iPod Nano (faulty screen), iPhone 4 (antennae) and lower battery life in most of its products. These flaws have again raised questions on Appleās commitment to quality products.
Apple seems to achieve success only in the US and a few European countries such as France. This focus on a certain market is a weakness based on narrow-mindedness. Though the marketing in the US is good, the same cannot be said of its foreign exploits. A good example is the low penetration of the Mac in the developing world while rivals are making bountiful sales in these markets.
Another weakness is the reliance on outdated technology especially in Appleās Operating Systems (OS). This weakness can only be brought to light when certain Apple products are compared to those of rivals such as the Mac and other laptops, iPhone vs. Research in Motion (RIM)ās Blackberry and the Apple TV.
Finally, Apple products are not standardized in such a manner such as to allow integration with other software. This is a major undoing on Appleās part since its lack of flexibility keeps away many customers who opt for products which they can easily upgrade using their own software. The fact that most iPhone applications can only be bought on Appleās Online Store is seen as either a sign of rigidity or greed on Appleās part.
Opportunities
A major opportunity in the hands of able is the capacity to expand its product range. Indeed we have seen the company enter into TV which is an example of Appleās dynamism. Another opportunity is the improvement of the economy after the recession meaning that more people will be willing to spend on Apple products.
The growth of the ICT industry presents an opportunity for Apple to acquire even more customers and to have a wide range of new technologies at its disposal. An example of this is the rush to manufacture tablets with Apple having launched the iPad and other industry players introducing different versions.
The improvement of online commerce is also likely to add more sales on Appleās Online Store. Finally, Apple has an opportunity to succeed through strategic alliances and joint ventures with other industry giants.
Threats
One of the greatest threats to Appleās success is definitely the acquiring of more innovative products by competitors such as RIM. This is because the technology industry is very volatile and only the new sells.
This is probably why sales of iPods have dropped since people want new technological gadgets. Competitor pricing is also a threat since if consumers feel that they can acquire the same product for less from a competitor, they will not hesitate to switch.
New competitors are also a threat to Apple since; the market share will have to be split to accommodate the newcomersā products. These new entrants include electronics guru Samsung, Sony and other Chinese companies.
Changes in technology remain a major threat not only for Apple but for all companies in the industry. ICT players run the risk of finding their products obsolete overnight even before they recover manufacturing costs. Foreign exchange rates are bound to threaten Appleās fortunes especially with a fluctuating dollar (Shapiro, 1996).
There is a rising cost in running of businesses in the US and this is bound to affect the Cupertino Company. Rising costs are bound to change consumer lifestyles where they choose to withhold spending especially on luxuries such as smart phones and tablets.
Strategy to capitalize on Appleās weaknesses
The first strategy to capitalize on Appleās pricing weakness is to manufacture products that are commercially competitive but still within reach of the average Joe.
Instead of being too flashy, the company could manufacture products that would more or less offer the same basic functions that consumers look for at an affordable cost. When consumers are then presented with both products, they should logically opt for our product. Effective marketing to inform customers of this would be the key to success (Ivory Research, 2010).
The next important strategy would be to launch our products globally. The developing world such as Africa, South America and parts of Asia would be our chief focus since Appleās products have not penetrated here.
The fact that our products would be top quality but affordable would be appreciated in this market. In addition, the effects of the recession were not far reaching in this market and thus people are still not afraid to spend (Michael & Jude, 2005).
We should capitalize on Appleās technological glitches by lining our products as worthy replacements and trouble-free gadgets. This can only be made possible through thorough quality control and testing. Aggressive marketing would also uplift the status of our products as being superior.
We should form strategic alliances with big ICT companies not only in the US but also in foreign emerging industries so as to get the best technology immediately it is invented so as to acquire it before rivals.
We should also employ persons with high levels of expertise in technology to run our think-tank and product development. This way we can ensure we only have the latest technology patented as ours. Thus we would always be a step ahead of competitors.
Finally, we should make simple, standard products that are trendy and appealing to the eye. Standardization would require us to liaise with other I.C.T players so as to come up with generally applicable systems. For example, we should make products that support java applications and other freeware programs such as Adobe Flash player. This would attract those customers who prefer to add their own applications to their gadgets.
If we carry out the above strategic plans effectively and within adequate timelines, then we shall be able to gain dominance globally as a major industry giant. These measures would not only enable us to make more sales than Apple in the domestic market but even greater achievements in foreign markets.
References
Allison, M & Kaye, J (2005). Strategic planning for non-profit organizations (2nd Ed) Washington DC: John Wiley and Sons.
Duncan, B. (2000). Simplified strategic planning: A No-Nonsense Guide to People Who Want Results Fast. New York: Chandler House.
Haines, S. G (2004). ABCs of strategic management: an executive briefing and day to day plan on strategic management in the 21st century. New York: Chandler.
Janet, S. (1996). Evaluation: Judgment day or managerial tool? Oxford: Olive Publications.
Ivory Research (2010). Ivory Research Online Library: free SWOT Analysis Generator. Web.
Olive Publications (1997). Ideas for a change. Part 1: How are you managing organizational change? Oxford: Olive Publications.