Apple Incorporated is a successful enterprise that develops, markets, and manufactures many electronic devices. Personal computers, media, mobile devices and portable music players are all products known across the world within the apple culture as the Mac, iPad, iPhone, and iPod. These names are part of many households, businesses and educational divisions in various countries. The decision to invest in such a company goes far beyond the popularity of a product. One must assess and analyze a company’s internal structure, reputation, quality, financial standings, as well as risks associated with the company.
The first phase in the research needed to make this decision is to explore the strengths, weaknesses, opportunities, and threats known as the SWOT analysis and how these relate to Apple Inc. ’s current standings and project where the company may go in the future. With this analysis I will be able to identify and evaluate internal and external accomplishments as well as the company’s stakeholders to evaluate if their needs are being met. This information will support the final decision if it is astute to invest in Apple Inc. at this juncture.
Part I: Business Analysis of Apple Incorporated Apple Inc. formally known as Apple Computer, Inc. was created in 1976 by Steve Jobs, Steve Wozniak, and Ronald Wayne. The company started with the initial vision of selling personal computer kits. By 2007 Apple Computer Inc. changed the name to Apple Inc. due to the vision becoming broader and encompassing various consumer electronics. Apple Inc. ’s innovative and revolutionary character took the technical world by storm and developed such products as the iPod, iPhone, and iPad.
Apple opened worldwide retail stores now in 14 different countries for customers to experience the products hands on as well as offering specialists and technical assistance. According to 2012 Financial Times 500, Apple is the “world’s most valuable company” with a market value at $559,002. 1 (million) in March of 2012. (Dullforce, 2012) Although Apple has gone through significant leadership changes due to the death of the co-founder and longtime CEO Steve Jobs in 2012, the outlook of the future of Apple has been positive. Analyzing the historical information of Apple Inc. nd projecting the future direction of the company in the following SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis will help me in making the decision to invest in the company. SWOT Analysis The objective of performing this SWOT analysis is to examine Apple Inc. ’s current and potential resources and liabilities that would be undertaken if and investment was made into the company. By weighing the internal and external elements of this company I will have evaluated the key topics of Apple Inc. for the purposes of potential investment.
Strengths- Strong brand image that is globally recognized- Developer of innovative and high tech products- Loyal customers – Strong research and development programs- Strong financial position| Weaknesses- Higher prices compared to competitors, limits customers- Faulty screens and batteries in the iPod Nano| Opportunities- Growth with cellular services- Green efforts – iCloud- New CEO, Steve Cook| Threats- China’s labor conditions – Increased competition and product substitution- Incompatibility to Windows and limited software| Strengths Apple Inc. is an innovative leader in technological developments.
The strong brand image this company has made for itself is known around the world. According to Morrissey (2010), the iPhone was named the top social brand. Apple has created many original devices and realizes the potential in technology. Apple is future-thinking and strives to develop the next best thing such as iCloud where all of one’s personal apple devices automatically synchronize to each other. The customers of Apple are loyal to their brand. Apple has focused on recruiting new users and relies on their consumers to stay with Apple products by developing devices that complement each other.
Customers continue to wait in lines and camp over night at Apple retail stores and have termed this a tradition when new products are available. Apple has created a culture and has kept up with the demands of modern technology and customer needs. The robust research and development department of Apple Inc. is the foundation for the ever changing world of technology and gadgets. Apple not only employees hundreds of well-trained individuals but also allows the public to become part of their development team.
This team has supported Apple’s financial success and has created a company that has become the world’s most valuable company in 2012. (Dullforce, 2012) In Q3 2012 Apple released the net profit was $8. 8 billion compared to Q3 2011 net profit of $7. 3 billion. The market shares continues to increase for Apple as does the company’s net profit. Weaknesses Many of the Apple products are priced higher than their competitor’s comparable devices. Apple has maintained a high quality product for a higher price than most other companies such as the Samsung Android.
In Apple’s 2012 SWOT Analysis even the company itself noted, “lack of products at different price points” as a weakness and went on to say, “competitors have access to a large market base and are better positioned to capture varied customer interest. Price is the only effective competitive disadvantage that Apple’s competitors have been leveraging. ” (Apple Inc. Company Profile, 2012) Most of Apple’s products have been high quality with low failure rate. When devices have had faults such as the iPod Nano’s batteries and screen these results in negative outcomes for the customer as well as the company.
Apple created a replacement program in 2011 to address the concerns with the overheating batteries. In result the cost for creating the replacement program and devices as well as the negative exposure of an Apple product costs the company its name and money. Opportunities Being the innovative company that Apple is it is highly likely it will continue to pioneer groundbreaking products. Now Apple has broadened its cellular phone carriers from beyond ATT to Sprint and Verizon this will work as strategic partnerships in marketing for both the cellular service company as well as Apple.
Another opportunity for Apple is their continued improvements of keeping Apple green. Apple started in 1994 recycling e-waste and continues to increase their environmentally friendly process of disposal of old devices by offering free shipping and free drop off to Apple retail stores of unwanted Apple products The company has provided consumers a comprehensive report on their website which describes how they continue to work towards improving the devices environmental performance such as completely eliminated the use of screens made with lead called cathode-ray tubes.
Apple states in this report, “we’re still the only company in our industry whose entire product line not only meets but exceeds the strict energy guidelines of the ENERGY STAR specification”. (“Apple” 2012) Another opportunity listed in Table 1 is the concept of iCloud. iCloud was announced in 2011 and allows storage of data on remote computer servers and acts as a data syncing center for Apple devices. The ease of this product saves the consumers time and efforts and allows automatic back-up of their iTunes as well as other information such as calendars and pictures.
This allows all of one’s mobile and stationary devices to communicate to each other, allowing the consumer the ability to just pick up and go without having to worry about syncing their files. The loss of Steve Jobs in 2012 brought Apple to their new CEO Tim Cook. Cook has been revealing his strong leadership qualities and his different style compared to Jobs over the past year. Tim Cook is known to be an extroverted leader who is charismatic and personable with not only Apples investors but as well as the employees.
When comparing Jobs and Cook their styles seem to be extremely different when it comes to communication. According to Lashinsky (2012), what shocked the investors during a meeting soon after Cook became CEO was when he walked in unannounced to an investors meeting and “quietly sat down in the back of the room, and did something unusual for a CEO of Apple: He listened. He didn’t check his e-mail once. He didn’t interrupt. ” Lashinsky (2012) continues to describe how Jobs rarely met with investors and applauds the success that Tim Cook has accomplished by becoming more visible.
The company’s market value has increased $140 billion since Cook became CEO. Financially and socially Cook is taking Apple to the next level. Threats A possible threat for Apple Inc. is the public scrutiny of China’s labor issues at Foxconn Technology, a manufacturing building and supplier of Apple. Allegations that Foxconn had poor working facilities and long hours created controversy for Apple. Apple has since worked with the Fair Labor Association which conducts independent audits of labor conditions inside factories.
Tim Cook, CEO has also taken a stance against labor abuse and has multiple visits to China for investigation. Increased competition and product substitution are other threats to Apple. The market in the industry of technology thrives on many of Apple’s products. When Apple produced touch screen devices competitors followed in their footsteps, when Microsoft originally introduced the tablet in 1999, Apple was able to strategize and improve on the basic foundation and introduced the iPad. Apple provides high tech innovative ideas to produce their products, but they come with a price.
The price of Apples products is much higher without the option of lowering their price points where competitors may offer different levels of devices. The incompatibility to Windows and less software designed for Macs have been issues for consumers. Mac is incompatible with a large variety of software that is offered by Microsoft and has less software offered to purchase when compared to Microsoft. Apple Inc. Stakeholders Stakeholders are the many people who have direct interest in a company and in return the company needs to continuously reassess if their stakeholders needs are being met.
Apple Inc. has a number of internal and external stakeholders that are affected by the way Apple maintains their business, below lists a few of a much larger number. As a possible investor the need to evaluate who the stakeholders are and if their needs are being met by the company will weigh in on the decision of investment. Internal Stakeholders (are there needs being met) Apple employees, the companies manufacturers, as well as third party developers, are identified as internal stakeholders of Apple Inc. Apple Inc. was listed #7 on the Best Companies to Work For 2012 list by Glassdoor. om. Apple continues to offer high salaries, various leadership positions, and a competitive culture according to Glassdoor. com. Apple has moved its business across the world into 14 different countries and offers job opportunities in many ways such as manufacturing supplies. As internal stakeholders the employees want job security, competitive salaries and respect which Apple appears to be succeeding in. Suppliers of the company are looking for business opportunities and continuous stream of orders to sustain their business.
Apple does not fall short of selling their product to maintain the supplier’s need for production. Apple has focused on the labor issues in China with the assistance from the Fair Labor Association to assist with improving the factory. Apple supports the needs of its internal stakeholders and continues to remain a successful operating company with high levels of job satisfaction and high levels of standards for their team. External Stakeholders Customers, community, environmentalists, retailers, lenders and investors are to name a few of Apple Inc. s external stakeholders. Customers are looking for quality products for a good value. Apple offers a number of inventive devices that have satisfied their customers such as the iPod, iPhone, and iPad. As indicated by the widely known “apple culture” once you are a customer you typically are retained by Apple products. Apple has built an unbreakable customer bond that secures consumer loyalty. Meeting the needs of the customers, Apple has maintained high quality products and great customer service being offered virtually as well as in retail stores.
Apple is increasing its efforts in advancing the company to an even higher level of green. This movement affects the community and environmentalists and meets their needs. As described in the opportunities in the SWOT analysis apple has created many new strategies for environmental friendliness. The lenders such as banks and investors of stocks have an interest in the businesses success in order to get returns on their investments. As well as the company remains successful and continues to increase profits and grow as a company the lenders and investors will be satisfied.
There are many other external stakeholders for such large companies as Apple, each of the external stakeholders listed are having their needs met by Apple Inc. Conclusion In conclusion, after close assessment of Apple Inc. ’s situational analysis and stakeholders needs assessment the decision to add the company into this mutual fund investor’s portfolio has been accepted. This decision is based upon the strengths and opportunities noted in the SWOT analysis of Apple Inc. as well as the relationship of the company with its stakeholders.
Although the SWOT has identified weaknesses and threats it is obvious to this investor that the benefits from the strengths outweigh the risks of the weaknesses and threats. Apple Inc. continues to strive in the ever changing world of technology and continues to excel in the business of running a technological empire.
Dullforce, A. B. (2012). Financial Times. Retrieved from http://www. ft. com/intl/cms/s/0/e9d0412e-ca82-11e1-89f8-00144feabdc0. html#axzz286bZF6gW Apple. (2012). Retrieved from http://www. apple. com/about/ LASHINSKY, A. (2012). HOW TIM COOK IS CHANGING APPLE.
Fortune, 165(8), 110-118. Retrieved from http://ehis. ebscohost. com/eds/detail? vid=15&hid=5&sid=cad11fa9-7315-4a62-9e00-bc8315dd35fd%40sessionmgr104&bdata=JnNpdGU9ZWRzLWxpdmU%3d Morrissey, B. (2010, January). Apple Dominates Social Brand Ranking. AdWeek, 51(1). Retrieved from http://ehis. ebscohost. com/eds/detail? sid=726bbe92-d12f-4c32-9c96-abd166d1d071%40sessionmgr115&vid=3&hid=103&bdata=JnNpdGU9ZWRzLWxpdmU%3d Apple, Inc. Company Profile. (2012, May). Retrieved from https://ehis. ebscohost. com/eds/detail? vid=10&hid=2&sid=7f397637-7db5-46c1-a0d2-11a9615fdbf2%40sessionmgr113&bdata=JnNpdGU9ZWRzLWxpdmU%3d