Business Report: An Analysis of Apple Inc. Using SWOT Framework

This report presents a comprehensive SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis of Apple Inc., a leading multinational technology company. It begins with an introduction to the business, outlining Apple's core functions and its position in the consumer electronics market. The report then delves into a detailed SWOT analysis, identifying Apple's innovative capabilities, strong brand image, and research and development as key strengths. Weaknesses such as patent infringement, high prices, and incompatibility with other software are also discussed. The analysis highlights opportunities like the growth of the smart wearable technology market and the potential of artificial intelligence, while also addressing threats such as rapid technological changes and increasing competition. Recommendations are provided to capitalize on these opportunities and mitigate the identified weaknesses and threats, including continued innovation, expanded marketing strategies, and strengthening distribution networks. The report concludes by summarizing the key findings and evaluating Apple's position in the market.

BUSINESS

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Background of the industry..........................................................................................................1
SWOT Analysis...........................................................................................................................2
Strength analysis..........................................................................................................................3
Weakness analysis.......................................................................................................................4
Opportunity analysis....................................................................................................................5
Threat analysis.............................................................................................................................5
RECOMMENDATION...................................................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
The word 'Business' is come from English word Busi+Ness. It is an organised institution
to provide products and services to the society under the incentive of gain. Business is the
activity of manufacturing, buying and selling goods or providing services in order to make profit.
The main functions of business are; Planning, Production, Purchase, Sale, Insurance, Market
Research, Grading and Standardization, Advertisement and Publicity. The business project aims
to evaluate about the chosen organisation that is Apple Inc. it will include an analysis that
represents strength and weakness of the company, opportunity and threat for the organisation.
The analytical tool that is select for the purpose is SWOT.
MAIN BODY
Background of the industry
Name Apple Inc.
Logo
Area Served Worldwide
Industries served Consumer electronics
Computer hardware
Digital distribution
Computer software
Financial technology and services
Digital distribution
Headquartered California, U.S.
Founders Steve Jobs
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Steve Wozniak
Ronald Wayne
CEO Tim Cook
Employees 132000
Revenue $265.595 billion
Competitors Samsung, Amazon Echo, Microsoft, Sony,
Fitbit, Bose, Dell, Hewlett Packard, Acer,
Google and many other companies
Apple Inc. is an multinational technology American based company that designs, manufacture
and sell various products such as; consumer electronics and computer software products. The
industry established in Cupertino, California on 1st April, 1976 and incorporated on 3rd January,
1977. In the very beginning, the organisation called as Apple Computer Inc. for 30 years but
after the computer word has been dropped on 9th January, 2017 that reflects their ongoing
expansion into the consumer electronic market (Apple Inc, 2019). In the current market, Apple
Inc. is considered to be the most successful electronics company in the world and Apple also has
a high level of brand loyalty and is ranked as the world's most valuable brand. The corporation is
known for their unbeatable niche in the industry. The company has also introduced their own
official website that is www.apple.com that enables consumers to buy products and services
directly from the website.
SWOT Analysis
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It is the most basic and popular analytical tool for identifying strength and challenges that
present internally and opportunity and threats that are available outside the industry.
Strengths Weaknesses
 Apple is a leading innovative company
in mobile device technology.
 Strong brand image
 Research and Development
 High quality products
 Patent infringement
 Product recalls
 Dependency on single products
 High price
 Incompatibility with other software
Opportunities Threats
 Growth of tablet and smartphone
market
 Increasing in the demand of cloud
based services (Bull and et. al., 2016).
 Market gap
 Rapid growth in the market of
communication devices.
 Rapid technological changes
 Strong dollar
 Intense competition
 Dependency on specific supplier
 Market penetration
 Tax scandal and damage on reputation
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Illustration 1: SWOT Analysis of Apple
(Source: Apple Inc, 2019)

 High demand in Smart wearable
technology
 They have opportunity of Utilising
Artificial Intelligence
 Consistent consumer growth
Strength analysis
Leading innovative electronics brand- This is one of the key strength of Apple. The
company has been selected to be the most innovative business over the world three times
(Castro, 2016). The industry is regarded as a leader for innovating goods and services in the
market such as; iTunes Media Player and iWork.
Strong brand image- The strong brand image of the industry enables a premium pricing
and creates significant demand in the market for its products. The strong brand image is the
strength of the organisation that gives an edge to the company over the regional and global
competitors. The image of the brand in the market is build as a highly innovative, well-
functioning, well designed products and recognised by consumers in the same manner. The
products are also known and demanded by the consumer under the image set by the brand in the
marketplace. The brand value of the company is $214,5 billion. The strong brand image and
value is efficiently reinforced by a combination of various factors such as large consumer base
and high profit margin (Gürel and Tat, 2017).
Research and development- Apple has high brand recognition and the company has
invested $8.5 billion in 2017 for Research and development. The R&D help the company is to
understand the need of consumer effectively and deliver them quality products. This activity is
the strength of the company as this help in developing innovative and trendy products that can
set a standard in the market.
Consumer loyalty combined with expanding closed ecosystem- In the beginning
closed ecosystem was a weakness for the organisation that is changes and become the strength of
Apple. Now the company has full range of software, apps and products that are interlinked and
support each other (Harmon and Castro-Leon, 2018). The expansion in closed ecosystem enable
company to enhance the consumer loyalty and build effective consumer base.
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Weakness analysis
Patent infringement- The iTunes by Apple infringed three patents owned by smart-flash
LLC and was ordered to pay $532.9 million. The company is often accused of infringing patent
of other companies and even lost some trials that result in damage on the brand and its financial
situation.
High prices- The only effective and major limitation company have that is the high
prices in compare to its competitors (Khan, Alam and Alam, 2015). This have negative effect on
the sales of the company's products and service. This weakness limits their consumer area as
clients have many options available in the market such as; Samsung, Microsoft that provide
similar products and services in much cheaper rates. As compared to 2015, Apple loss consumer
base from 93% to 88%. Every year the competition of Apple bring some intense feature for the
consumers in reduced price that give high competition to the organisation and they can easily opt
for similar quality products but in lower price range. The products offered by Apple comes in
premium pricing and it changes their target market from middle to high-income consumers.
Incompatibility with other software- This is the biggest weakness for the consumers.
As if they purchase apple product, they enter into the Apple universe (Linz, Zimmermann and
Müller-Stewens, 2017). The products offer by the company does not support other software or
technologies that makes them incompatible with other devices. Consumers have to exclusively
buy apps and accessories that are developed by Apple to continue using the products.
Dependency on single products- The company has been criticised as a single product
company for its over dependence on iPhones (Sammut‐Bonnici and Galea, 2015). In the mid of
2012-2015, the sale of iPhones are decreasing in the global scale that is one of the major
weakness of Apple.
Opportunity analysis
Smart wearable technology- The world is changing into all new smart technology. The
smart wearable technology will dominate the world. It has been analysed by Forbes that smart
wearable technological device sales will be double up by 2022 and will become 29 billion+
market with 230 million unit sales. It provides an opportunity to Apple to capitalise on smart
wearable technology (Bull and et. al., 2016).
Utilising Artificial Intelligence- Apple have opportunity to utilise the artificial
intelligence in their products and services that help them to enhance their profit margins and to
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build strong market position. In their features they are implementing AI but now with the
technological advancement world they are require to expand Artificial Intelligence to give a new
edge of service to their consumers.
Increased cloud based services- In future Apple have opportunity to bring innovation
iCloud that will redefine the earning of the company (Castro, 2016). They can grab the
opportunity and could expand the range of iCloud services and software.
Consistent consumer growth- Apple Inc. has been dominating the technological sectors
for years now. The company is known for providing high quality products and services with the
cutting edge technology that offers a breakthrough in the experience of consumers. The
consumer rate of the company is 92% that is phenomenal. The industry can rely on the power of
internet for the future opportunities that help them to gain new consumer and new alliances.
Threat analysis
Rapid technological changes- This is one of the most severe threat, all the other tech
companies and Apple is facing rapid technological changes. The changes make pressure on the
organisation to release new products and services faster and faster to being with the
technological advancement world and to beat the competition (Linz, Zimmermann and Müller-
Stewens, 2017). This is so hard for Apple company as they want to introduce something new
each and every time with new innovation.
Market penetration- This is the biggest threat for the company, as there has been a
significant change in market penetration by other brands in the Smartphone market. In compare
to iPhone, Android is eating market share as it has 47.6% of the market share whereas iPhone
only have 43% market share (Sammut‐Bonnici and Galea, 2015). There are many companies that
are using Android such as; Samsung, Lenovo, HTC and approx all the mobile brands are using
Android.
Increasing competition- Apple has solidified itself as a brand but still threat is
competitor have to face by the company. With the technological advancement brands like; Dell,
Samsung, Microsoft, Google are giving a tough competition to Apple. The competition is getting
stronger and stronger. It put pressure on the company and now Apple either have to introduce
new technologies or revise their pricing policies to stay ahead from its competitors.
Tax scandal and damage on reputation- Currently Apple maintain their bran image and
reputation in the market but an involvement in the tax scandal in 2010 caused a huge damage to
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the reputation of brand (Harmon and Castro-Leon, 2018). The news at that time make this viral
in no time. This break the trust of consumers and drive the sales down suddenly.
RECOMMENDATION
 Based on the strategic issues highlighted in the analysis, a recommendation is to continue
the aggressive and rapid innovation involved in developing the product of Apple. Such
inventions and innovation help the company to reduce the adverse effects of imitation on
revenues.
 It is also recommended to the organisation that they can further increase the automation
of the production process and support the automation of the manufacturer that in contract
that will help to address the rising labour cost in each and every function (Gürel and Tat,
2017).
 Apple have limited marketing strategy and it is recommended to the company that they
can develop and expand their marketing strategy through digital media that is an
important aspect in today's digitalised market.
 The analysis of the company and the market place stated that the demand of smart
wearable devices is increasing rapidly that should grab by Apple by understanding the
need and demand of consumers and deliver them the devices with unbeatable features so
that enhance the market share and value of the company (Linz, Zimmermann and Müller-
Stewens, 2017).
 It is recommended to the company to expand their services and chances of adopting new
strategies in order to engage new customers that help them in meet high rise in demand of
iCloud services.
 Another essential recommendation to the industry is to establish or enhance their
partnership with more distributors to improve the overall market reach of the distribution
network of the company (Castro, 2016).
CONCLUSION
From the present styudy it has been evaluated that although Apple is a renowned brand
and have a proper and effective management, but they also face some crisis in the marketplace
and within the organisational structure. On the basis of the analytical tool that is SWOT analysis
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it has been concluded that the weakness and threat of the company can be changed in their
strength and opportunity with the effective marketing/business strategy.
It also has been concluded that they have limited consumer base from middle to high
income level consumers due to their high pricing products that low income person cannot afford.
For overcoming this barrier to have all the segment of consumers, company provide various
offers where they cut down the price of old products and sell them through various online
websites.
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