Situational Analysis of Apple Inc

This paper provides a detailed analysis of Apple Inc, including SWOT and PESTEL analysis. It discusses the company's strengths, weaknesses, opportunities, and threats, as well as the external factors that may impact the company. The paper also examines buyer behavior, micro-environment, competitors, and provides a summary of the findings.

Running head: SITUATIONAL ANALYSIS OF APPLE INC
SITUATIONAL ANALYSIS OF APPLE INC
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Executive Summary
This paper is a detailed analysis of the company Apple Inc. This paper involves both
Swot and Pestel analysis that will give a detailed overview of the company’s strength,
weakness, opportunities and threats. It will also talk about the external factors that might have
an impact on the company that will be assessed in this paper.

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Table of Contents
Introduction................................................................................................................................3
Discussion..................................................................................................................................4
Buyer behavior.......................................................................................................................4
Micro-environment................................................................................................................4
Porter’s Five Forces...........................................................................................................4
Competitors............................................................................................................................5
Swot Analysis.........................................................................................................................6
Macro environment................................................................................................................8
Pestel Analysis...................................................................................................................8
Conclusion................................................................................................................................12

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Introduction
AppleInc. is one of the most popular and notable brands in the world today. It is an
American multinational technology company. Founded by the late Steve Jobs, Ronald Wayne
and Steve Wozniak. Tim Cook is currently the CEO Apple Inc. Currently Apple, considered
the world’s largest information technology company.Founded in the year 1976 on April 1, the
headquarters are in Cupertino, California, United States of America.. In the recent years,
Apple has spread in the entertainment industry and in information technology becoming one
of the largest companies in terms of music streaming as well. Apple iPad, iPhone, iPod,
Apple watch, Mac and Apple TV are few of the popular products, which is currently
produced by Apple.

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Discussion
Buyer behavior
Apple Inc. is one of the most expensive brands in the market. Apple products have a
strong fan base thus making people upgrade the phone irrespective of the hike in prices.
Apple products are very smooth, look good and gains the attraction of the buyers
(Khachatryan, 2018).Apple has very few retailers making it an integrated ecosystem. By
using their channels, which includes iTunes, retailer point of sale and other methods that
include online, Apple acquires information in details about the consumer behavior and the
current market situations. Apple uses thisinformation to manufacture their products and
messages that resonate with their target audience and make products that are in demand with
necessary features. Apple looks at certain factors like social, cultural, personal and
psychological factors as to how buyers are going to perceive the product. They tend to look at
people’s perception about the products, resonance with the brand and their attitude. Apple
caters to the younger generation as they are likely to be less sensitive towards price and
focused on the brand more. Apple’s target audience are mainly people belonging to the high
economic strata and youngsters.
Micro-environment
Porter’s Five Forces
Competitors- there is a tough competitve rivalry. L.G and Samsung, Google Pixel, Xiaomi,
and Dell are few of the biggest and strongest competition of Apple in the market.
Buyer power- the buyer power is strong as it is easy for people to change their phones thus it
is important for Apple to come up with innovative products of the customer satisfaction.
Supplier power- the supplier power is weak as Apple is globally a big company and has
access to different and many suppliers in the world.

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Threat of Substitution- this is relatively weak in affecting the sales of Apple. Most people
would prefer to use Apple products rather than some other brand on the basis of advanced
functions and convenience.
Threat of New Entrants- this has moderate force. There are many new brands that are
launching in the market. However, the innovative products has paved way for brand loyalty
thus not affecting the business of Apple Inc.
The Porter’s five forces states that Apple Inc. is at a very good position. There are
mostly positive aspects. However, there are threats od customer changing brands but that can
be solved if they satisfy the customers.
Competitors
Apple Inc. is one of the most popular brands. With unique technical innovations, creative
marketing and minimalistic designs has branded the company as game changer in the market.
Apple provides a wide range of products like smartphones, laptops, iPods and T.V. Apple
faces a lot of competition in the market as there are many brands competing in the market
with same products. The biggest competitors of Apple in the market are Dell, Lenovo, Acer,
and HP when it comes to laptops as these brands make affordable laptops and with unique
features in the market. Samsung is one of the biggest competitor of Apple Inc. in the
smartphone business following with Google Pixel and Xaomi. However, Google Pixel falls
under high-end phones due to the price but Xaomi caters to a wide range of consumers due to
their price range and the features. Brands like Asus, Lenovo they compete in both areas as
they also manufacture both laptops and smartphones. Panasonic, L.G are brands that give a
stiff competition in the Television market. However, Apple manages to survive these
competitions due to the company’s reputation, brand name and innovative products.

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Customers- Most of the Apple customers belong to the high income strata. The teenagers and
yound adults mostly use Apple products because of the design and the product.
Suppliers- there are moderat to high number of supliers,
Swot Analysis
This analysis will assess the strength, weakness, the possible opportunities and threats
of the company Apple Inc. (a.ebscohost.com, 2015)
Strengths
 Innovations of the company- Apple Inc.consistently keeps on innovating on their
technology and products coming out with new ranges and new updates in their
systems. Apple Inc. media player, internet radio broadcasterand a media library helps
downloading and streaming musicthat has become very popular amongst the
youngsters (Wang, Lai & Lin, 2016). It is currently the largest retailer online for
streaming videos, music and software solutions.
 Sales growth- Apple Inc. sales go up at a very high speed. In 2018, Apple shipped
their two billionth iOSdevices. The company generated a revenue of $62.9 billion, an
increase in 20 percent.
 Brand Loyalty- Apple Inc. has a huge brand loyalty among their customers. People
who use apple get used to it thus think of upgrading it rather than exchanging their
phone with new products in the market (Huang, 2017). Apple Inc. has garnered a
loyal fan base making it one of the most reliable products in the market as well.
 Effective and Strong Marketing Team- The marketing team of Apple brilliantly
displays the products playing the nostalgia and the emotional card. Apple does not
hire any celebrities as the brand, the logo identifies with everyone and the brand

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cleverly as a high standard and a luxury product that helps them effectively so that
people instantly associate themselves with the brand(Cloonan, 2016).
 High –quality experience – Apple builds customer relationships very effectively.
Apple approaches their customers in a personalized manner. They understand the
existing problems and try bringing out solutions that are acceptable to the people. This
kind of customer service experience becomes fruitful for the company’s reputation
(Lamiman, 2016).
Weakness
 Exorbitant Price- The primary complaint of the consumers are the high prices of the
products of the company. Many people find the products unaffordable. New products
are launching in the market with the same features in reasonable prices that makes
people choose to buy the other products.
 Limited Distribution Network- The exclusivity policy of the company is the reason
for the limited distribution. The company minutely decides their sellers of their
products. This land up being their weakness despite of their exclusivity.
 Dependence on high-end market sales- Apple Inc. categorizes themselves as luxury
product making them very expensive and inaccessible to the middle class group. Their
dependence on the high-end market sales becomes a weakness for them as few people
buy the expensive product.
Opportunities
 Expansion of distribution networks- Apple Inc. if collaborates with more sellers in the
market then the distribution rate increases. This will help the company to generate
more revenue.

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 High demand- There is an increasing demand of Apple products in the market. People
want to avail these products thus there should be an increase in production.
 Growth in the Communication device market- Apple does not intend in selling phones
of low cost. They want to make the phone high-end. Despite the difference in price,
Apple enjoys the increasing demand of its products.
 Unexplored market- Apple products can expand their business by introducing the
products to countries where they have not reached yet. Exploring markets will
increase the sales and be profitable for the company.
Threats
 Progression of Electronic Communication- The structure of the environment of the
electronic communication is constantly evolving. Apple has to keep itself updated
about new product launches and the features introduced by them. The Android market
is expanding and is offering products at a reasonable price making it accessible to the
majority in comparison to the iOS market.
Laptops of different brands re coming up with new innovative ideas and very good
services that are becoming a huge competition for the MacBook by Apple. Other
laptop brands are inexpensive compared to the MacBook and have many new features
making rise in their sales.
After assessing Apple Inc. based on SWOT analysis it is seen that Apple has more
strengths and opportunities in comparison to weaknesses and threats. Apple Inc. is currently
enjoying the position of being at the top position. Apple should take actions and make
strategies to overcome the problems present so that it can retain its position.

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Macro environment
Pestel Analysis
This will help in monitoring and analyzing the macro-environmental or external factors
that may have an impact on Apple.
1. Political factors
 Australia is safe in terms of investment. The regulatory and political environment is
progressive, open to new markets, very stable making room for investors. There is a
high degree of certainty and confidence provided (Lie, 2016). Australia has always
been effective when responding to challenges related to the economy. Apple should
expand more here as it is a favorable environment for growing a business.
2. Economic factors
 Labor costs- In Australia the wages of an employee in a private sector grows at a very
slow rate. This can have a negative impact on the sales of the phone as with slow
growth in wages very many people will not be able to afford the luxury brand. The
stagnation of the middle class income groups in a developed country like Australia
might effect the potential market in Australia.
 Value of Dollar – A strong and heavy U.S. Dollar can increase the exchange rates that
can become more expensive for Apple to do business in countries like Europe,
Australia and China.
3. Social factors
 Accessory of the elite - Apple Inc. is one of the leading and most successful
companies in the world. People want to associate themselves with this brand from all
over the world as well as Australia. The unique and innovative designs, ordinary
marketing and the expensive price makes people want to buy the products. It has

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become a social status that only the rich can afford because of the high price making it
a luxury brand (Roper, Caruana,, Medway & Murphy, 2013).
 Resentment by music artists- Marketing strategy of Apple music did not go down too
well with music artists. Music streaming apps have become very popular but music
artists are paid less for their own music making them publicly go talk about it that has
generated public criticism. This could tarnish the image of Apple Inc.
 Increased use of social media and technical devices- Most people are on social media
and usage of technical devices are increasing day by day (Swapana&Padmavathy,
2017). Their constant will to be on social media has paved way for innovations and
unique ideas in their company (Simeone& Russo, 2017). Apple should manufacture
more products for the consumers in the market due to the increasing demands of the
consumers.
4. Technological Factors
 Lack of uniqueness- Apple products are always one of their kind and everyone wants
to own one. These days many companies are creating replicas of the iPhone or taking
inspiration from Apple products and making products like that. Brands like Google
and Samsung have very strong abilities in doing this. After Apple Pay Google after
one year had come with their new app called Android Pay. This shows that the
signature products by Apple are not unique anymore (Zeman, 2013).
 Limited market for new products- The products that Apple can launch is limited.
Their new offerings to the consumer like Apple TV are going to have a very limited
market, as established brands in this sector offer similar products at a reasonable price
compared to Apple.
 Growing use of tablets and smartphones-, Portable gadgets are in demand. The use of
mobile phones and tablets are increasing because of their benefits.People are less

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likely to opt for laptops in comparison to mobile phones decreasing the sales of
laptops by Apple.
 Limited applications- The propriety operating systems of Apple are likely to limit the
huge variety of applications that are available in other smartphones that are available
in the market.
 Cyber-crime issues-Cyber-crimes have become a major issue these days. Cyber-
crimes make the Apple systems relatively less secure (Friedewald&Pohoryles, 2013).
This tarnishes their image as they have a reputation of providing high security and
safety to their consumers.
5. Environmental factors
 Disposal of electronic devices- The massive problem of Apple is that they are
discarding all the electronic junk, non-working and used. These products have lithium
batteries in it making it detrimental for the environment. This may result in massive
expenditure for Apple.
 Effects of Global Warming- Global Warming has its effect all over the word even in
Australia. Due to the increasing rate, Apple might face difficulties in transoceanic
shipping which is an important part of their chain supply (Lockamy, 2017).
6. Legal Factors
 Legal actions against faulty products- The Australian Consumer and Competition
Commission took action against Apple Inc. and Apple’s Australian subsidiary in the
Federal Court. Apple was fined $9 million for faulty iPhone and iPad for violating the
rights of the consumers. Apple admitted that they led about 275 customers informing
that they were not entitled to any sort of remedies like replacement of phones;if their
phones was repairedby, someone else not related to the company. Australians have
also reported that they could not connect their internet to new iPads (Tobin, 2012).

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 Piracy and litigation- Apple products depend on many other products that covers the
intellectual property law thus making Apple vulnerable to litigation and piracy
(Carew, Florkowski, & Smith, 2013).
Based onPestel analysis, Apple Inc.will continue to rule the market despite having some
negative aspects as the company has the capability of handling pressure effectively. The
designs and uniqueness of the phones are an advantage to the company that reflects in their
revenues making Apple Inc. one of the leading companies in the market.
Conclusion
In conclusion, Apple Inc. is one of the most powerful companies in the world. It has
achieved a lot of success. Apple is mainly the first company to come with the new unique
ideas that has generated the company a huge revenue. Emphasis should be put on the
weaknesses and threats that can be detrimental. The different strategies used by the company
has contributed to the rapid growth of the company making Apple Inc. a successful and a
high-end luxury brand.

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