Strategic Management Apple Inc.

Posted on May 28, 2018 by Cheapest Assignment

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Analyse the key threats and opportunities in the current environment of the Apple Inc. and depiction of the future innovation trends based on the analysis of the threats and opportunities.

Analyse the perceived strengths and weaknesses of the Apple Inc. and discussion of the competitive analysis of the company from the perspective of innovation.

Analyse the direction of the company in the next 10 years assuming strengths, weakness, opportunities, and threat of the company.

Introduction:

The study has been mainly focusing on the analysis of the key opportunities and threats which has been useful in developing and analyzing the strategic business performance of Apple in this global market. The study has been focused on the identification of the direction of the company under study in the next 10 years to come in the future (Beckman and Barry, 2007). The study is also based on the perceived strengths and weakness for the company Apple and there should be the comprehensive discussion of the findings to be taken place. This will be useful in illustrating the competitive analysis of the company with the innovation has been taken as its perspective. The study has also been focused on the indications of the future trends for Apple in the next 10 years to come. Apple has been considered as the market leader in the electronics industry. Apple has the wide range of product portfolio by which they could be able to reach millions of customers and have developed a huge customer base resulting in improved performance of the business for Apple.

 

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SWOT Analysis

Strengths Weakness Opportunities Threats
Apple has high branding power as it has a global presence and the strong leadership of Steve Jobs. Apple has been very much dependent on the sales of iPhone so Apple has been vulnerable in the Smartphone market. Apple with the huge financial backup, they could be able to enter different product line altogether which involves in computer related products or in media. Apple has been facing stiff competition with the companies like IBM, Microsoft, HP as competition has been increased significantly.
Apple spends very less in advertisement yet its recognition and popularity has been world class. Apple has weak distribution channels in India and in India there have been no official Apple stores at the moment. Apple has been getting the opportunities to expand their business in Asian countries as compared with the European countries. The exchange rate of US in the coming years will increase so the revenue and profitability of Apple outside will likely to decline in the future affecting the overall revenue of Apple.
Apple has been very much strong in the US market due to its extensive distribution channels. Apple has been using the multiple channels for delivering the products to the customers. The company has been using the direct sales, online stores and the Apple stores for distributing their products. Apple has been spending very less on R&D as compared to other companies as they do not get a competitive advantage for this. Apple has been focusing much more on the innovation in the designs in the future for attracting the youth a lot.

 

 

 

 

 

Apple would be focusing much more on the development of innovative products for enhancing the revenue for Apple.

There is a high risk of data breaching cases to be taken place for Apple.
Apple has huge employee strength.      
Apple has been vertically integrated company as it has been managing four separate divisions which include the hardware, software and they have been itself a service provider. Apple has the integrated supply chain.      
It has strong financial capability and this will increase in future as well.      

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Analysis of the key threats and opportunities in the current environment of the Apple Inc and depiction of the future innovation trends based on the analysis of the threats and opportunities

In essence of the rapid advancements in technology, Apple Inc has managed to be regarded as one of the most technologically advanced companies in the world maintaining its pace by introducing innovative products in the market. It is needless to mention that in spite of having a huge number of opportunities in the field of technological development, the domain in which they work is also not free from all sorts of threats. The main threats and opportunities that Apple Inc is likely to face currently and also in future can be discussed as below:

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Key threats of Apple Inc:

When Apple Inc is considered based on the viewpoint of being a company, minimum or no threats are there. This is because as a company they are always trying their level best to be at the leading position among its competitors. But, based on the products that they sell, the company is likely to face a huge number of threats from others. Although Apple Inc is constantly focused on the innovation of their product line, but there are also other companies like Microsoft or Google which also try to constantly innovate their products. It is a well – known fact that often the users of the smart phones find Android and Windows system easier as compared to that of the iOS system which the Apple Inc products have. Thus, it can be analyzed from this that the market penetration in the smart phone market is a major threat. Android system is currently occupying the majority of 47.5% of the market share while IPhone being a product of Apple Inc is still at 42%. On the other hand, if the laptop market is considered it is an undoubted fact that MacBook being the product of Apple Inc is a product of high innovation and is regarded to be the best by the customers. Still, the other competitor companies like Dell or Lenovo also always stay ahead of the innovation and they have introduced smart laptop models recently which also include the Alienware model (Martin, 2009). Moreover, the business of smart phones being dynamic, there is high price sensitivity also in case of certain geographical locations like that of the emerging markets like China, India or Brazil. This makes the fact clear that in spite of being the best in technological innovation of the products, Apple Inc has to face these kinds of key threats from its competitors.

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Key opportunities of Apple Inc:

Apple Inc has a huge opportunity of shifting their focus in different other media or computer products where not many companies have entered into. The company also has the chance of forming strategic alliances with other companies and thus creating further huge innovations in technologies. For instance, like that of the fact of expansion of Facebook with Instagram, Apple also focused on trying on new products which they can launch in the market. As a result of this, following the innovation trends, Apple has decided to launch a new product which is Apple Car that will be technologically very innovative by the end of the year 2020. Since the products of the company are already considered to be of great quality, thus it can also be expected that this new product will also provide great comfort and ease to the end users. Also, as Apple Inc is a leader in the technology industry, they can always have the scope of developing and advancing in this industry along with the rapid technological innovations occurring throughout the world. Apple Inc can leverage its resources and make the best technological innovations in their field. This is definitely a huge opportunity for Apple Inc with the help of which they can further launch more advanced versions of Iphones, MacBooks, Iwatches etc. It is needless to mention that Apple is an ever growing company and currently in the growing or emerging market, Apple can grab the opportunity of capturing the majority of the market share by outdoing the Android or Windows systems. Moreover since the GDPs of the countries that are developing are at an increasing pace, the chances of consumption of products of premium brands like Apple are also increasing. Thus, a growing company like Apple Inc can get the larger market base that it needs by gradually building up their market base with the help of expanding their business in most of the developing and developed countries.

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Thus based on this discussion it can be depicted that Apple Inc is a company which always keeps their product line innovated and following the future innovation trends the company can increase the presence of their products like Iwatch and Apple TV when the digital presence will further be increased in future. The future trend is also that the demand of online products will further increase and Apple can capture this market by bringing more innovative product line and thereby competing with its major competitors in future.

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Analysis of the perceived strengths and weaknesses of the Apple Inc and discussion of the competitive analysis of the company from the perspective of innovation:

Apple Inc has been a leading global technological player for over more than 2 decades. One of the most perceived strength of the Apple Inc as a company is its brand image. The brand image which the company has developed is mainly for the constant practice  of innovation that they has developed over the years. The company has been immensely successful in creating a desire among the customer to use the company product.  The innovation that they incorporate within the product and the features that they implement essentially provides a true value to the customers. The company has been investing in innovation with high level of investment in research and development to stay ahead of the immensely competitive technology product market and electronic goods market. It can be rightly said that the innovation practice which has essentially lead the company to develop high technological product. For a technology based company it is important to have a right research and development team who are willing to and motivated to develop right kind of product which will certainly act as a benchmark in the industry. It is imperative to mention that the research and development team is high world class who are essentially dedicated to innovate and create a benchmark to incorporate features which are not only unique but indeed a absolute new innovative feature. This has been the core competence of the Apple Inc since its inception which has been setting industry standard and benchmark. It is apart  from the product development which is unique and exam plenary for the company, another perceived strength of the company is the immense level of customer focus.  This technology company always develop product which are meant for future and at the same time it is absolute customer oriented. In essence they incorporate product feature which even customer did not expect from the product. So this immense customer focus strategy is one of the core strength of the company which is significantly another major strength of the company. It is also noteworthy to mention that Apple provide major impetus to the design of the product. They develop product with such a exclusive design which is not only innovative but so attractive that it creates a long lasting image to the product and a exclusive customer experience. The company has been known for its design which provide a cutting edge image to the product. In addition to it, the company has a unmatched distribution with 470 own stores operating in as many as 17 countries. Beside, providing the required customer service, the company has various offline and online channels through which the company cater its product to the various markets. So with a extensive distribution strategy the company has been successful in distribution across the length and breadth of the globe in the major markets. Apple Inc distribution is so focused that each and every service delivery through its own global stores are exclusive and they keep the aspect of customer satisfaction in their minds. Therefore, in a nutshell it can be said that the product feature, design, continuous research and development to incorporate new innovative feature in every version of the product and the distribution strategy and customer service has been a unique in its own way which adds to the strength and competitive advantage to the company.

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In contrast to the above strengths, there are few weaknesses too for Apple inc. Though the company has been successful through improvisation of the strength but the weaknesses that this technology company and electronic product company possess can bring threat to the sustainability of the organization. One of the perceived weakness of the company is that after setting after a standard in product innovation, it is always very difficult for the company to match the expectation of the company to incorporate new product feature in each and every version of the product that it launch. In the past it has been observed that newer version of iphone which has launched with much customer expectation has failed to deliver a breakthrough innovation in the newer version. So customers who essentially pays a high premium will not go ahead with Apple’s product if the company fails to deliver expectation of the customer trough a highly innovative product which has always been a USP of the company. Moreover, the company entire revenue is highly dependent on few product portfolio which has also large number of competitors. So competing with few product can be very risky for the company and can pose severe threat to the sustainability of the company. Moreover, the major revenue driver of the company which are I phones and Mac book So these often deters the company, to use purchase the company product which also a major disadvantage to the competitive advantage of the company.

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Analyzing the direction of the company in the next 10 years assuming strengths, weakness , opportunities and threat of the company:

It is from the close observation of the operation of the company , it can e rightly assumed that the this innovation driven technology company improvise on the strength to grab the opportunities in the market.  Rather it can also be said that the company also creates opportunities for its own product through innovation and creating product for the future. It can be rightly analyzed that the company is solely looking at the creating a distinct market from them and absolutely different from the customers. The company also aiming to build competence through revolutionizing the smart phone and computer product segment. The company is set to build upon the competence  of innovation and strong research and development to build a complete new dimension in smart phone segment through redefining the very concept of the today’s generation smart phone product. So it can be rightly said that that Apple Inc is set to redefine the product and create a market of their own and wants other company to follow the foot step. Therefore Apple Inc is trying to create a new product which will provide a new computing and smartphone device which is currently beyond the customers expectation. So they specifically want to a create a new direction of the entire electronic industry in the next 10 years which will certainly help the company to stay ahead quite a few years ahead from the nearest competitor.

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Conclusion

It is concluded that Apple has been one of the most trusted and reliable electronics company operating strongly in the US as well in the global market. Apple has been focusing much more on the investment in the R&D in order to develop innovation in their products and their designs. It is evident that Apple wants to sustain their position in the global market as the market leader which eventually helps them to gain competitive advantage over the other electronics companies operating in this market (Thomke and Feinberg, 2009). It concludes that Apple has been much more focused on the development of more retail stores and bringing the online presence for capturing the market in future.

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References

Thomke, S.H. and Feinberg, B., 2009. Design thinking and innovation at Apple.

Pontiskoski, E. and Asakawa, K., 2009. Overcoming barriers to open innovation at Apple, Nintendo and Nokia. World Academy of Science, Engineering and Technology53, pp.372-377.

Jun, S. and Sung Park, S., 2013. Examining technological innovation of Apple using patent analysis. Industrial Management & Data Systems113(6), pp.890-907.

Nonala, I. and Kenney, M., 1991. Towards a new theory of innovation management: A case study comparing Canon, Inc. and Apple Computer, Inc. Journal of Engineering and Technology Management8(1), pp.67-83.

Martin, R.L., 2009. The design of business: Why design thinking is the next competitive advantage. Harvard Business Press.

Beckman, S.L. and Barry, M., 2007. Innovation as a learning process: Embedding design thinking. California management review50(1), pp.25-56.

Leavy, B., 2010. Design thinking–a new mental model of value innovation. Strategy & leadership38(3), pp.5-14.

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