SWOT Analysis of Apple Inc.

#. About Apple:
Apple Inc. is an American multinational technology company headquartered in Cupertino,
California, that designs, develops, and sells consumer electronics, computer software, and
online services. It is considered one of the Big Four of technology along
with Amazon, Google, and Facebook
The company's hardware products include the iPhone smartphone, the iPad tablet
computer, the Mac personal computer, the iPod portable media player, the Apple
Watch smartwatch, the Apple TV digital media player, and the HomePod smart speaker.
Apple's software includes the macOS and iOS operating systems, the iTunes media player,
the Safari web browser, and the iLife and iWorkcreativity and productivity suites, as well as
professional applications like Final Cut Pro, Logic Pro, and Xcode. Its online services include
the iTunes Store, the iOS App Store and Mac App Store, Apple Music, and iCloud.
Apple was founded by Steve Jobs, Steve Wozniak, and Ronald Wayne in April 1976 to
develop and sell Wozniak's Apple I personal computer. It was incorporated as Apple
Computer, Inc., in January 1977, and sales of its computers, including the Apple II, grew
quickly. Within a few years, Jobs and Wozniak had hired a staff of computer designers and
had a production line. Apple went public in 1980 to instant financial success. Over the next
few years, Apple shipped new computers featuring innovative graphical user interfaces,
such as the original Macintosh in 1984, and Apple's marketing advertisements for its
products received widespread critical acclaim. However, the high price tag of its products
and limited software titles caused problems, as did power struggles between executives at
the company. In 1985, Wozniak stepped away from Apple, while Jobs resigned and founded
a new company with former Apple employees.

Apple’s Corporate Mission Statement:

Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork
and professional software. Apple leads the digital music revolution with its iPods and iTunes
online store. Apple has reinvented the mobile phone with its revolutionary iPhone and App
store, and is defining the future of mobile media and computing devices with iPad.

Apple’s Corporate Vision Statement:

We believe that we are on the face of the earth to make great products and that’s not
changing. We are constantly focusing on innovating. We believe in the simple not the
complex. We believe that we need to own and control the primary technologies behind the
products that we make, and participate only in markets where we can make a significant
contribution. We believe in saying no to thousands of projects, so that we can really focus
on the few that are truly important and meaningful to us. We believe in deep collaboration
and cross-pollination of our groups, which allow us to innovate in a way that others cannot.
And frankly, we don’t settle for anything less than excellence in every group in the company,
and we have the self-honesty to admit when we’re wrong and the courage to change. And I
think regardless of who is in what job those values are so embedded in this company that
Apple will do extremely well.

 Apple’s Strengths (Internal Strategic Factors)

This aspect of the SWOT analysis framework identifies the strengths that enable the
company to overcome weaknesses, take advantage of opportunities, and withstand threats
in its business environment. These strengths are internal factors specific to the conditions
within the business organization. In this case, the following are the most notable strengths
of Apple Inc.:

1. Strong brand image

2. High profit margins
3. Effective rapid innovation processes

Apple is one of the most valuable and strongest brands in the world. In the context of this
SWOT analysis, the company is capable of introducing profitable new products by virtue of
its strong brand image. In addition, Apple’s marketing mix or 4P involves the premium
pricing strategy, which comes with high profit margins. This internal strategic factor is a
major strength because it maximizes profits, even when sales volumes are limited.
Moreover, the generic competitive strategy and intensive growth strategies of Apple
Inc. involve effective rapid innovation, which enables the business to keep abreast with the
latest technologies to ensure competitive advantages. Based on this aspect of the SWOT
analysis of Apple Inc., the company’s strengths are difficult to compete with, thereby
supporting continued leadership in the global industry environment.

Apple Inc.’s Weaknesses (Internal Strategic Factors)

In this aspect of the SWOT analysis, the emphasis is on the weaknesses or inadequacies of
the company. Weaknesses are internal factors that are obstacles to business growth. The
following business weaknesses are the most notable in the case of Apple:

1. Limited distribution network

2. High selling prices
3. Dependence of sales on high-end market segments

Apple Inc. has a limited distribution network because of the company’s policy of exclusivity.
For example, the company carefully selects the authorized sellers of its products. The SWOT
analysis framework considers this exclusivity strategy as a factor that limits market reach.
This weakness exists despite exclusivity’s advantages, such as Apple’s strong control on the
distribution of products. In addition, because of its premium pricing strategy, the company
has the weakness of the dependence of sales on high-end market segments. High prices
attract customers from the middle- and high-income brackets, while preventing customers
from low-income brackets to easily purchase the company’s products. This internal strategic
factor is a considerable weakness because high-end market segments represent only a
minority of the global market. Based on the internal factors in this aspect of the SWOT
analysis, Apple Inc.’s pricing and distribution strategies impose limitations or weaknesses in
the business.

Opportunities for Apple Inc. (External Strategic Factors)

This aspect of the SWOT analysis of Apple Inc. pinpoints the most significant opportunities
that are available to the business. Opportunities are external factors based on the industry
environment. These factors influence the strategic direction of business organizations. In
Apple’s case, the following are the most significant opportunities:

1. Expansion of the distribution network

2. Higher sales volumes based on rising demand
3. Development of new product lines

Apple Inc. has the opportunity to expand its distribution network. Such opportunity directly
relates to the weakness of the company’s limited distribution network. This SWOT analysis
emphasizes the need for the company to change its distribution strategy. An expanded
distribution network can help Apple reach more customers in the global market. In relation,
the company has the opportunity to increase its sales volumes through aggressive
marketing, especially for mobile products. This opportunity is linked to the rising demand
for mobile access, as illustrated in the PESTEL/PESTLE analysis of Apple Inc. Furthermore,
the company has the opportunity to explore new product lines. Its current product lines are
highly successful. However, with further innovation, the company can develop and
introduce new products, like what it has already achieved with the Apple Watch. Developing
new product lines can support business growth in the international market. Thus, this
aspect of the SWOT analysis of Apple indicates that the business has major opportunities for
further growth despite aggressive competition.

Threats Facing Apple Inc. (External Strategic Factors)

In this aspect of the SWOT analysis, the focus is on the threats that the company
experiences from various sources, such as competitors. Threats are external factors that
limit or reduce the financial performance of businesses. In Apple’s case, the following
threats are the most significant:

1. Aggressive competition
2. Imitation
3. Rising labor cost in various countries

Tough competition in the industry is partly because of the aggressiveness of firms. Apple
competes with firms like Samsung, which also uses rapid innovation. In the context of this
SWOT analysis, aggressive competition has a limiting effect on Apple Inc. Because of the
aggressive behaviors of competing firms, it is necessary to have strong fundamentals for
maintaining competitive advantages. In addition, the company faces the threat of imitation.
This threat is significant because of the large number of local and multinational firms that
imitate the design and features of Apple’s products. Moreover, rising labor costs involving
contract manufacturers, such as those in China, reduce profit margins or push selling prices
even higher. Based on the external strategic factors in this SWOT analysis, Apple Inc.’s
performance could suffer because of aggressive competition and imitation of product
design.

#. Recommendations:

The internal and external factors discussed in this SWOT analysis indicate that Apple Inc.
possesses major strengths to effectively address organizational weaknesses. The company
can also use these strengths to exploit opportunities, such as the expansion of its
distribution network. Moreover, the company can use its strong brand image and rapid
innovation processes to successfully develop and launch new product lines. However, Apple
faces the significant threats of aggressive competition and imitation, which are major
challenges affecting players in the global market for consumer electronics, computer
hardware and software, and online digital content distribution services.

Based on the strategic issues highlighted in this SWOT analysis of Apple Inc., a
recommendation is to continue the aggressive and rapid innovation involved in developing
the company’s products. Such innovation reduces the adverse effects of imitation on
revenues. Also, it is recommended that the company further enhance the automation of its
production processes, and support the automation of its contract manufacturers, as a way
of addressing the rising labor costs involving Apple product manufacturers. Another
recommendation is to establish partnerships with more distributors to improve the overall
market reach of the company’s distribution network.