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SWOT Analysis of Apple Inc

SWOT Analysis of Apple Inc

Strengths

  1. Apple is one of the biggest names in the information technology industry and operating in the market for several decades. In 2017, the revenue of Apple was recorded around $229,23 billion, which was the largest by any IT company. As per Forbes, Apple is the most valuable brand across the world with the brand value of around $170 billion (Forbes, 2018). It reflects that the organization possesses a strong loyal customer base across the global market.
  2. Strong innovation capabilities can also be regarded as the biggest strength of the organization. For that reason, Apple has concentrated on making a huge amount of investments in the research and development sector. In 2018, Apple’s R&D investment is expected to grow above the $3 billion marks for the first time (Apple Insider, 2018). It has allowed Apple in coming up with innovative products like iPad, iPhone, and Mac. All these products have helped Apple in becoming the dominant name in the technology sector.
  3. Over the past few years, Apple has expanded its geographical reach to penetrate larger section of the market. Presently, Apple is operating with total 506 stores across 25 countries, which has allowed the company in achieving sustained growth for longer timeframe (The Balance, 2018).

Weaknesses

  1. Apple has adopted a premium pricing strategy for all its products, which has restricted the company in a limited section of the target market. In the present time, the average selling price of iPhone and iPads is around $400, which is significantly higher than other available products (ZDNet, 2017). Furthermore, many popular competitors of Apple like Samsung are offering products at a much lower price. Over the past few years, several companies like Huawei and Xiaomi, have grown within the smartphone industry as well, which in turn increased overall competition level. As a result, the organization is facing high risk of substitute across the global market.
  2. Unlike other top companies like Microsoft or Google, Apple does not have a massive product portfolio. In fact, Apple depends heavily on the revenue generated from selling iPhones across the global market. Apart from iPhone, other products of Apple are not offering the desired level of revenue to the organization. Such a high dependency on one product has increased the risk of conducting business immensely.

Opportunities

  1. Apple, as a technology-driven company, can come up with new and innovative products to create disruptive impact on the market. In fact, the management of Apple has already concentrated on developing new products like Apple cars, Apple watch and Apple TV for achieving long-term success across the targeted market (BGR, 2015). All these products possess innovative features and can have an immense impact across the global market.
  2. Geographical expansion is another alternative option that management of Apple can utilize to reach new customers. It has been assessed that the per capita income and GDP level of several economies across Asia and African market is growing consistently (Global Finance, 2017). As a result, demand for such luxury electronic items is also growing at a rapid rate. Hence, expansion across the global market will definitely help the organization in increasing the profit level even higher.

Threats

  1. Over the past few years, the quality of smartphones has grown immensely across the global market. Companies like Samsung, HTC or One Plus are now offering supreme quality smartphones to go beyond the expectation level of the customers (Leaf and Core, 2017). As a result, Apple is facing increasing pressure to come up with new and innovative product features at the time. Such high pressure has induced the organization to invest more on the R&D activities, which in turn created an adverse impact on the overall profitability.
  2. Apple is also facing intense competition in the laptop market, as companies like Dell, Sony and Lenovo have captured the majority of the global market (Fortune, 2015). MacBook, however, is among the premium quality laptop across the global market. The quality of Apple’s MacBook is perhaps the best in the market. In spite of that, companies like Dell and HP have been able to capture a major share of the market with its highly competitive pricing strategy. These organizations are not only offering laptops at a lower price range but also targeted higher end market as well. For instance, Dell’s Alienware have created immense impact on the premium quality laptop section of the market.

Inflation and increasing labour cost have also augmented the threat level for the management of Apple. To counter this issue, Apple has already shifted its major manufacturing unit to China. However, Chinese market is also becoming costly for Apple, as the economy is facing issues like increasing labour cost and inflation.

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