Apple Inc.’s SWOT, Marketing, Control, Finances

Executive Summary

Apple is an American company that manufactures, sells, and distributes computer hardware, software and electronics. It was founded by Steve Jobs along with Steve Wozniak and Ronald Wayne in 1976 (Grady, 112). They incorporated the company in 1977 and located the headquarters in Cupertino. It is very popular in USA since it produces highly quality products which include iPhone Smartphone, iPad tablets, and Mac computer hardware (Grady, 114). The company’s mission is to produce high quality technological products which are easy to use and cheap. Its philosophy argues that technology should not be complicated in a manner that intimidates illiterate and non-computer experts. In the light of fulfilling this mission, the company embraces corporate social responsibility by handling employees fairly, providing safe working environment, and using environmentally conscious manufacturing processes.

Situation Analysis

Apple’s mission statement drives towards improving the safety and health of workers as well as customers by producing products that are friendly to the environment (“Apple” par. 6). On the other hand, the vision has the clamor to provide the best experience to users by making quality personal computers. In essence, the mission and vision statements are consistent with the long-term goals bearing in mind that the company seeks to provide high-quality products. The protection of environment and provision of the best computing experience is a critical component of quality production. Understandably, in its attempt to provide safe products and best computing experience, the company will improve the quality of its products (Grady 12). Accordingly, quality is viewed as the capability to protect humanity against afflictions that may arise from using the company’s products.

SWOT Anaysis

Strengths Weaknesses
  • Apple has been capable of commanding loyalty from their regular customers owing to the quality of products.
  • It has portrayed its innovational capability in the production of mobile devices and surpassed its competitors profoundly.
  • The company has a strong financial performance whereby it does not have any debts while the profit margin is at 44 percent.
  • The company has gained brand reputation that is strengthened by uniqueness and quality
  • The products produced by Apple have high prices.
  • Most of the software that the developers have developed are incompatible with Apple’s OS
  • The company’s market share has been decreasing continuously
  • Making frequent changes in the management.
  • Patent infringement has been a problem that might disparage the organization’s reputation
  • Some new products have shown defects
Opportunities Threats
  • The company’s products are experiencing high demand worldwide.
  • There is a robust growth of tablets market and demand.
  • The company has an opportunity to getting other patents through the process of acquisition.
  • The company can outsource income from patent infringers.
  • Mobile advertisement has gained popularity and necessitated the use of Apple devices
  • Technology is changing rapidly and hence the devices are becoming obsolete after a short time.
  • There is pressure exerted by Samsung especially when it comes to products such as mobile phones.
  • The emergence and rapid growth of Android OS is a major threat.

Marketing Strategy

The company noted that customers who come from developing countries are not ready to purchase Apple products. They purchase products from other companies which include Nokia and Samsung. The two companies dominated the market in developing companies hindering the prevalence of apple products. In light of obtaining comparative advantage, the company introduced cheap products including iPods and iPhones. When the consumers use the cheap devices, the consumers are introduced to Apple products. This triggers them to purchase other products regardless of the price since they have accessed the quality of the products. This is the core strategy that has enabled the company to attain comparative advantage in developing countries.

Additionally, the company has used local and international media to popularize its products in the international markets. For instance, it broadcasts technological expos through CNN and BBC among others. International media has, therefore, enabled the company to popularize and advertise its products to the international companies (Samuelson and Marks 213). Another competitive marketing strategy is the use of social media as an advertisement platform. For example, it has created pages on Facebook and Twitter which are used for marketing Apple products. Since social media is both effective and cheap, the company reduces the cost of marketing leading to much comparative advantage over other companies.

Apple has not implemented the strategy of horizontal integration that allows the production of various products with different prices. In this regard, they have increased the production of high-priced devices that target the wealthy people (Lashinsky 233). In fact, manufacturing high-priced product has led to the creation of this successful and profitable company. In this regard, Apple seeks to increase the profit margin which necessitates the production of few devices that have a high profitability. As a result, the limited production allows the company to maintain high standards and increase the reputation. These standards enable the company to obtain a competitive edge.

There are various changes that should be made in Apple Company in order to guarantee progress and competitiveness.

The OS should be opened to accept Software that does not come from Apple. The rising production of open source platforms such as Android necessitates this change (Schiller par. 4). Understandably, these companies might take over the market since most customers prefer to install any preferred software regardless of the source.

Apple should address the sustained issues of defective products. The defective products can easily ruin the reputation of the company bearing in mind that the brand is mainly defined by quality.

Financials

The company has adopted a tactical financial strategy where it seeks to pay out quarterly dividends to share holders. Additionally, the company has currently decided to repurchase its shares. This strategy will help the company in attaining more comparative advantage that its competitors in the local and international arena. In this light, paying out dividends quarterly maintains a state of loyalty between the company and shareholder since the shareholders have more dividends to obtain from the company. If the dividends were paid once a year, the company and shareholders would lose contact of each other. Additionally, it ensures that the company does not pay out without considering future risk. In this light, the company must consider that the future returns are uncertain. Therefore, paying quarterly dividends distribute the risk evenly over the entire financial year. It is important to note that the company has decided to pay these dividends after a period of ten years. This decision aims at creating a good image of the company in order to earn more customers. Additionally, the company wants to buy repurchase its shares so as to reduce debts and retain profits. This implies that it will rejuvenate its financial capability leading to comparative advantage.

Control

Premise control shows that the company has restricted its expansion in developing countries due to existing insensitivity to technology. However, technology has become global such that majority of the world’s population is digitised. As a result, the premise that led to this restriction is invalid. This implies that the company should change its strategy regarding the expansion and franchising in developing countries.

Special alert control shows that Apple has an incompetent crisis management system. This was portrayed when a customer reported an iPhone that caught fire unexpectedly in the house. Additionally, the company was unable to handle the crisis which emerged when customers identified bad iPhone antenna. This implies that the company must consider crisis management.

Implementation strategic analysis must review its manufacturing process since it has been criticized severally. For example, Greenpeace Company argues that Apple uses non-recyclable materials to manufacture their products (Campbell and Craig 87). It, therefore, contends that the company poses a threat to the environment. Additionally, this organization revealed that Apple products contain toxics that are harmful to the body. These criticisms must be addresses promptly.

In accordance to strategic surveillance, it is evident that the main competitors of Apple are very sensitive to the faults which the company makes. It appears that the company could magnify the faults in order to convince customers that Apple does not produce quality goods. It is very important for the company to consider such threats.

Conclusion

In essence, it is evident that Apple Company produces quality as well as well-defined devices. This condition implies that it does not manufacture devices extensively to include many types of products. However, this presents a challenge to the future of the company since its major competitors are engaging in mass production. Despite the capability to produce quality products, rivals such as Samsung are also improving their standards. As a result, Apple should diversify its production, and disregard the mentality of limiting its manufacturing scope (Samuelson and Marks 132). In this regard, they do not have to deconstruct their brand. Instead, they will explore in the production of other devices with the same level of quality. This undertaking will ensure that the loyal consumers will have more products to buy and enjoy the services.

Works Cited

Apple 2009. Web.

Campbell, David, and Tom Craig. Organisations and the Business Environment. 2nd ed. Amsterdam: Elsevier Butterworth-Heinemann, 2005. Print.

Grady, Jason. Apple Inc. Westport, Conn.: Greenwood, 2009. Print.

Lashinsky, Adam. “Inside Apple: How America’s Most Admired–and Secretive–company Really Works.” Choice Reviews Online 49.11 (2012): 231-247. Print.

Samuelson, William, and Stephen Marks. Managerial Economics. 7th ed. Hoboken, N.J.: Wiley, 2012. Print.

Schiller, Bradley. “Inkling.” Inkling. McGraw-Hill, 2009. Web.