Introduction of Apple Corporation
Apple Inc. is an American multinational company. Apple Inc. is considered to be the most popular worldwide electronic company which designs, consumer electronics and sells personal computers. Headquarter of the company is located in U.S and the current CEO is Tim Cook. Apple Inc. annually revenue is $ 156.508 billion dollar and profit of the company is $ 41.733 billion dollars. More than 72000 employees are serving the customers around the globe.
The main competitors are Microsoft Corporation, Dell Inc, Amazon.com, Samsung Electronics Co, Cisco Systems, Inc., Google Inc. LG Electronics Inc, Dell Inc, Hewlett-Packard Company and many others.
Apple SWOT Analysis
1. Customer loyalty oath combined with expanding closed ecosystem. While at first Apple’s closed ecosystem was a weakness point for the company, it has changed since 2001 when it has introduced its iPod mp3 player. 1st Apple now has a full range of applications, product and software that are interlinked and support each other. 2nd new products and supplements will be released very soon (ITV), hence expanding the ecosystem. 3rd, Apple has a strong customer loyalty oath, which increases due to Apple’s closed ecosystem, the combination of Apple’s expanding closed ecosystem and customers’ loyalty oath increases the competitive advantage.
2. Apple is a leading innovator in mobile device technology. In 2012 Apple has been chosen third time as the most innovative product in the world. The strength of the company is producing innovative products to the market.
3. Strong financial performance ($10,000,000,000 cash, gross profit margin 43.9% and no debt). The financial performance of the Apple’s is one of the best among many companies. End of 2012 Apple Inc. Holds about $10,000,000,000 in cash, which can be used for solution of equations and buying back company shares etc. It also has higher gross profit than its main competitors, which is equal to 44.0%. Company has no debt and its not directly affected by credit markets or interest rates.
4. Brand reputation. Apple has a reputation of highly innovative, well-functioning, and well-designed products and sound business performance. According to 2012 the value of Apple brand is $76.5 billion and was the second most successive valuable brand in the world.
5. Retail stores. Apple’s stores are the most profitable stores in terms of sales. Apple’s retail stores ensure high quality customer experience, give direct contact with knowledgeable staff and increases the awareness of brands.
6. Strong marketing and advertising teams. Strong Marketing is one of the main functions in success of Apple brands. It can sell expensive products, build superior stores and advertise their products in a compelling manner.
1. Highly price. Apple’s products cost much more than its competitors devices. The price of the product is not justified. Apple products price becomes a weakens point because consumers can easily buy a similar quality product but in lower price.
2. Incompatibility with different OS. The OS and iOS X are quite different from each other OS and uses software that is unlike the software used in Microsoft OS. Due to such differences, both in hardware and software, users often choose to stay with their accustomed software and hardware (Microsoft OS and Intel hardware).
3. Decreasing market share. The lower market share Apple has, the lower it can influence its potential customers and persuade to jump them into using Apple’s closed ecosystem products.
4. Patent infringements. The firm is often accused of infringing other brands patents and has even lost some trials. This damages the Apple brand and its financial situation.
5. Further changes in management. Tim Cook becomes the new CEO in 2012 after loss of Steve jobs. Scott For stall and John Browett (chief of retail) left the company too and this will have a bad impact on company’s management.
6. Defects of new products. This is not recent Apple weakness but one that jumps out time to time. Some of Apple’s iPhone and iPod releases had clear faults and which disturbed sales of the products.
7. Long-term gross margin decline. Apple’s current gross margin is one of the highest in the electronic industry but analysts fear that due to increasing other component prices and competition current margins will not be retained.
1. High demand of iPad mini and iPhone 5. iPad mini and iPhone sales will increase Apple’s market share in the tablet market and, will strengthen firm’s competitive advantage.