Apple Inc : SWOT Analysis and the Porters Five Force Model Analysis Sample Report
The following report includes the discussion about the company Apple Inc. The report includes the SWOT analysis and the porters five force model analysis of the company.
Apple Inc. is an organization which deals in designing, manufacturing and selling of desktop computers, notebook computers, and digital music players, cell phones etc. The company is also into the business of creating software’s like the OS X. iTunes, iLife etc. the company is also into manufacturing of the electronic peripherals like storage devices and printers etc. the company is a technology-driven company and has expanded from computers industry to the peripherals and digital entertainment industry (O’GRADY 2008).
SWOT of Apple Inc
Strengths: the main strength of the company is the brand equity it has developed all around the world. The company products have a high demand and have a high loyal customer base across the globe. The company sales for each product have increased from the previous level and have also entered the peripheral industry. The company product Ipad, IPods and IPhone has generated a high demand all around the world and is among the most awaited products in the world. The company is one of the most healthy and established company in financial terms. The company has the highest number of new customers each year and has also the strength to retain them for long. The customers come to apple for new products and the excellent services it provides to its customers (Ireland, Hoskisson and Hitt 2008).
Weakness: There is several weakness of the company as well. The main weakness is that the company has faced some faults in its products like the IPods Nano which has been said that has a faulty screen, though the company has replaced all those products but has impacted the image of the company at large. The company also has the weakness that it is facing pressures from the music industry to increase the prices of the music download file it provides to its customers. the company also has the weakness that it has ended its long standing relationship with IBM its chip supplier and has switched to Intel and this is the weakness which is confusing the customers from long (Bach 2007).
Opportunities: The companies have several opportunities prevailing in the current business market. The company can develop its own iTunes for the music player market and for its IPhone. The company also has the opportunity to join with the other big companies which can add value to the company. The company also has the opportunity to launch new features computers and mobiles which is highly awaited by the customers in the market. The company also has the opportunity to launch green and energy efficient products which will generate high demand for its products in the coming period (Ireland, Hoskisson and Hitt 2008).
Threats: The Company faces the threat of increasing competition in the PC market and also in the phones market. The company main competitors include Dell, Lenovo, and Sony in the computer market and in the phones market the main competitors are Nokia, Samsung. The company also has expensive products as compared to its competitors which is also one of the threats for the company. The high product and substitution effect in the electronic market is one of the biggest threats to the company so the company needs to research and develop new products and technology from time to time (Bach 2007).
Porters five force model of Apple Inc.
Threat of Entry: The threat of entry in the market is low for the company as due to the high economies of scale of the company. The threat of entry is also low because the company has a high research and development team which is one of the biggest costs of producing new products in the computer, and electronic industry. High marketing costs is also one of the factors which make the threat of new entrants at lower level for the company (Linzmayer 2004).
Existing rivalry: The Company faces the threat of existing rivalry at higher level. Looking at the computer market the company faces high competition from Microsoft which has a larger share of the market then the company. The company also faces competition in the phones market, as there are several other large players like Samsung, Motorola, and Nokia etc. the company also faces existing rivalry in the ITunes and MP3 players market.
Threat of substitutes: The Company faces moderate threat from its substitutes. Company has several products which can be substituted for the other company products. The company products also have several substitutes but the technology and ease of the company products are much higher than those substitutes. The company phones can also be substituted by other phones, messengers but the ease which the company mobile provides cannot be easily replaces (Linzmayer 2004).
Bargaining power of suppliers: The bargaining power of the suppliers is moderate on the company, as the company suppliers of raw materials and labor can impact the company operations but the company operates at such a large scale that the suppliers have little bargaining power. Though the suppliers have the power to impact the prices of the company products and services even then the company manages to handle due to the economies of scale of its operations (Bach 2007).
Bargaining powers of buyers: The bargaining powers of the buyers are at the moderate level for the company. As the buyers are large and are disbursed in a large scale. The company also develops a new technology from time to time which forces the customers to use the company products and services and thus have lower bargaining power. The buyers are also increasing and are demanding more new upgraded products which keeps the company operational at large scale. The company also differentiated its products and has been creating its own operating system with unique design and this is highly awaited by the customers from long time period (Linzmayer 2004).
Bach, B. 2007. Implications of enabling technologies for Apple Inc.: Cyber marketing & enabling technologies. GRIN Verlag.
Ireland, R.D., Hoskisson, R.E. and Hitt, M.A. 2008. Understanding Business Strategy: Concepts and Cases. Cengage Learning.
Linzmayer, O. 2004. Apple Confidential 2.0: The Definitive History of the World’s Most Colorful Company. No Starch Press.
O’GRADY, J.D. 2008. Apple Inc. ABC-CLIO.