Apple Inc. SWOT Analysis

free essayThe market need for technologies has grown steadily for last several decades, and currently, it is immense. The Apple Corporation is one of the few largest leaders in the industry that have a strong brand and market position. However, Apple’s other two competitors that specialize in the production of similar technological produce have recently grown in popularity. Thus, Google’s Android devices as well as those manufactured by Microsoft that have a Windows operation system are also popular among consumers. After the analysis has been presented, the board of directors will be able to make conclusions and corresponding decisions regarding the direction of further development of the Apple Corporation.

Company Background

The Apple Corporation is an American company that has its headquarters located in Cupertino, California. The company designs, manufactures, and sells a wide set of electronic devices. The list is extensive and includes several types of hardware products, online services, and computer software.

The company was founded 1976 by Steve Wozniak and Steve Jobs under the name Apple Computers (“Timeline,” 2011). After that, the corporation experienced a strong and significant growth. Currently, it is one of the few leaders in the industry. Despite the fact that its brand is popular and strong the competition is intense. Apart from the competition on the market, the Apple Inc. faces some challenges related to its operation abroad, especially in Europe. Since the company had tried to have higher profits by decreasing the taxes that it had to pay, it eventually became known that some of these actions had been illegal. Now, the corporation has to pay over 14 billion dollars to the government of Ireland (The Economist, 2016). Although the amount that has to be paid is not likely to be a financial burden for the company, it could have a negative impact on the brand identity. Nevertheless, despite this single incident, there are some other facts and information that the board of directors should take into account when determining the further direction of the company’s development.

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SWOT Analysis

As a top brand in the world, the Apple Corporation has many strengths that outweigh its weaknesses. At the same time, because the company specializes in the design and manufacture of electronic products that depend on scientific and technological progress, there are many opportunities for further development. However, due to the popularity and innovative strategy of Apple Inc., numerous threats seem to emerge for the company. Therefore, SWOT analysis provides a review of the company and explains why it is the leader in the industry.

Strengths

Apple Inc. is the world’s leader in the industry because the products that it designs, manufactures, and sells are highly popular among the populations of the majority of the world’s countries. The extensive list of products generates significant revenues for the corporation, and it is likely that the trend will continue. Apart from its products’ popularity, the company’s significant presence is another strength that can be attributed to the large portion of sales. Specifically, in 2016, the domestic sales were 35% of the total sales, while the international ones were 65% (“Apple – annual report,” 2016). Besides the high value of its products, Apple Inc. has an expensive brand image. The positive effect of this fact is that the company has a high level of loyalty of its customers, which, consequently, creates an advantage in the market competition with other companies. Finally, the high sales and revenues as well the strong brand image create a solid financial fundament for the company to invest in research and develop new innovative and competitive products and services that will bring the profits for the company in the future.

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Weaknesses

One of the major weaknesses of Apple is the high prices of its products despite the high degree of competition on the market. For instance, one of the company’s products, the iPhone 6, costs almost 300 dollars more than its direct competitor, Samsung Galaxy S5, even though the specifications of both devices are similar (Parker, 2015). Apart from that, the weakness of the company is the decrease in total sales due to the decline in sales of hardware devices such as phones, personal computers, and tablets. Such a situation might be related to the high price of these products. The fact that Apple’s products are incompatible with other services and products by other companies is another weakness because it might be a reason for customers to avoid purchasing an Apple product. At the same time, the closed operation system is another factor that frightens off some of the potential buyers. Finally, despite the high popularity and a strong brand image, the company’s product range is limited. Moreover, although Apple Inc. introduces new devices regularly, it does not make profound improvements; it rather develops the existing features.

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Opportunities

The Apple Corporation has many opportunities that it could use for its further development. First, due to its vast financial capabilities, Apple is able to invest into research and technological advancement. Thus, there is an opportunity to develop and introduce new products as well as sell the improved versions of the existing ones. Apart from that, a current strong brand image, a high popularity of the company, and technologically advanced products create an opportunity for the market and audience to grow. Moreover, as some countries other than the United States grow economically and their GDP’s increases, the populations of these states starts to have more money that they might spend on the products of such brands as Apple. Finally, Apple Inc. could consider making its products more compatible with the devices made by other companies, form strategic partnerships with some big companies in the area or even competitors, and diversify the range of products, offered to the customers.

Threats

The leading position of the Apple Corporation on the market is the reason for numerous threats to it. First, a high popularity of its products makes its competitors interested in achieving the same success by copying the ideas. Such a situation took place when Samsung copied the design of the Apple iPhone, and the US court decided that the Asian manufacturer had to pay over one billion dollars as a compensation for the damage (Bradshaw, 2016). At the same time, the competition of the Chinese and Indian companies grows, which raises the threat that some portion of Apple’s target market will shift to the less expensive devices with similar specifications. Moreover, there is a threat that the costs of manufacturing will increase because the cost of labor in Asian countries rises slowly, and the majority of Apple’s production lines are located there. Thus, such a change might decrease the volume of the company’s profits.

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Conclusions

Overall, it may be concluded that Apple is obviously a leading company in many spheres of designing and manufacturing of electronic devices. However, such a strong position is a cause for some of the challenges that the corporation has to overcome. Therefore, the further direction of Apple’s development should be oriented at the use of its numerous strengths and opportunities to eliminate all arising threats and currently existing weaknesses. Fortunately, the current strong brand image and extensive financial resources provide all possibilities for the company to expand its product range and presence on the international market to eliminate other threats and weaknesses.