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External Factor Evaluation (EFE) Matrix is a strategic tool that allows assessing the external environment of a company and appreciating potential threats and opportunities. Apple Inc. is a US-based consumer-oriented company consistently ranked highly in profit, revenue, market capitalization, and consumer cachet (Hoovers, n.d.). Its primary products are phones, tablet PCs, Mac computers, laptops, mp3 players, and smartwatches. The present paper offers an overview of the EFE Matrix of Apple Inc.
While there are ten opportunities listed in the EFE Matrix, it is worth mentioning only the critical ones. The central opportunities for the company are market growth, reactive competition, and increasing demand for Apple products. Market growth is associated with the rising demand for Apple products as the company penetrates more markets around the world (Prakruthi & Ramu, 2018). The tendencies provoke increased profits of the company allowing them to expand their product line rapidly. According to Khan, Alam, and Alam (2015), talented personnel is the key to Apple’s performance, and the loss of human resources may lead to decreased revenues of the company. In short, the assessment of the outside environment shows that Apple Inc. demonstrates an above-average response to opportunities.
The majority of threats to Apple Inc. are associated with intense competition and legal and social responsibilities. Khan et al. (2015) state that the majority of competitors do not have their software that needs to be supported and updated. Android dominates iOS in mobile causing difficulties with compatibility. Additionally, the increases in tax, push to environmental sustainability, and political instability also increases the spending of the company. Rapid technology development also makes Apple spend much money on research and development.
The total EFE weighted score is 3.12 which accounts for the company being strong in position. While the outside environment of the market is aggressive, Apple Inc. seems to have found its way to make a profit. The company’s success should be attributed to talented leaders and outstanding strategic planning.
Hoovers. (n.d.). Apple Inc. Web.
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.
Prakruthi, A., & Ramu, M. (2018). A study on SWOT analysis with special reference to the Apple Company. International Journal of Pure and Applied Mathematics, 119(17), 181-192.