BUSINESS ANALYSISName:
Introduction
I am interested in Apple Inc. This company has managed to establish itself as one of the major multinational technology companies around the world. Apple Inc. has its headquarters in Cupertino, California in the United States. Apple deals with designing, development, and sale of computer software, consumer electronics, and online services. The company was founded in 1976 for development and sale of personal computers.
Strengths of Apple Inc.
One of the main strengths of Apple Inc. is innovation. Under the leadership of Steve Jobs, Apple rose to prominence. Jobs had a knack for being ahead of the technology curve. Apple was able to build the reputation as a company that relied highly on its innovative power. They launched the first iPhone in 2007 and went on to launch the iPad in 2010. These innovations made Apple one of the leading multinational technology companies. This pattern has gone on for years now, and Apple remains the hallmark of innovative new products. Their customers are always excited about the next innovative product to be launched.
Apple Inc. has rock-solid finances. By the year 2014, Apple Inc. had around $38 billion in cash and $127 billion long-term marketable securities (Hellman, 2014). Apple is known for its strategic acquisitions that are made possible by their vast cash reserves. For instance, they managed to acquire Beats Electronics in a $3 billion dollar deal. Another Strength of Apple Inc. is their strong brand image. Apple is among the strongest and most valuable brands around the world. The company has managed to penetrate almost every international market due to their strong brand image. Apple can introduce profitable new products by utilizing their strong brand image.
Weaknesses of Apple Inc.
The premium pricing strategy by Apple Inc. is one of its main weaknesses. Apple gets most of its sales from high-end markets due to their high prices. This luxury positioning means that it is hard for Apple to make huge sales in foreign countries where there are considerable pressures on ordinary consumers. The company is easily vulnerable to price competition from the likes Samsung and Xiaomi.
Another weakness of Apple Inc. is their limited distribution network. Apple has an exclusivity policy that limits the number of Apple products distributors. The company makes a careful selection of authorized sellers of their products. This exclusivity strategy supports their control over product distribution but limits their market reach.
Factors affecting the performance of Apple Inc.
The rapid growth of the developing countries is one of the factors that affect the performance of Apple Inc. Developing countries have been growing at a fast rate. For instance, Asian countries have posted high economic growth rates for the last few years. This is a major opportunity for Apple Inc. to increase their sales. As citizens in developing countries start making more money, they will be able to purchase Apple products as long as they are marketed to them. This implies that Apple is likely to increase their sales by tapping into these markets.
Another factor that is likely to influence the performance of Apple Inc. is the rising access to mobile phones. The number of mobile phone users in the world has been rising steadily. This trend where there is increased popularity of mobile devices creates an opportunity for Apple Inc. as they can provide easy-to-use mobile devices to the people. This is likely to increase the total sales and profit of the company.
The rising use of social media is another factor that can affect Apple Inc. performance. The number of users on social media sites such as Facebook has hit a staggering 1 .5 billion (Protalinski, 2015). This implies that the demand for digital devices has significantly risen and will continue rising. Apple can increase their sales by developing more digital devices that are necessary for enjoyable social media experience. These devices will be sold thereby increasing total sales and profits of the company.
The two critical factors
The two critical factors the three factors listed above are the rapid growth of developing countries and rising access to mobile devices. The rapid growth of developing countries presents potential new markets for Apple Inc. If Apple develops a clear strategy, it is possible to increase the sales of the company significantly by selling their products to these countries.
As for the rising number of mobile device users, it means that Apple can significantly increase their total sales as mobile devices are one of their main products. The current number of mobile device users stands at over 4 billion. This figure is expected to hit 5 billion by the year 2019 (Mobile phone users worldwide 2013-2019 | Statistic, 2016). Apple should take advantage of the increasing number of mobile device users to increase their sales.
Business actions to overcome the factors identified
One of the business actions that can help Apple Inc. increase their competitiveness especially in developing countries such as India is making their exclusivity policy more flexible to incorporate an increased number of distributors around the world.
The second business action that would increase Apple Inc.'s competitiveness is changing of their premium pricing strategy. This will allow customers from developing countries to afford more Apple products and ultimately lead to increased sales.
The third business action that will increase Apple's competitiveness, especially in the issue of increased mobile device usage is the development of easy to use mobile devices. A huge number of people can use these devices, thereby leading to increased sales for the company.
References
Hellman, J. (2014, August). Apple Inc.: A Short SWOT Analysis. Retrieved April 24, 2016, from http://www.valueline.com/Stocks/Highlights/Apple_Inc___A_Short_SWOT_Analysi s.aspx#.Vx14SXpNsQd
Protalinski, E. (2015, November). Facebook passes 1.55B monthly active users and 1.01B daily active users. Retrieved April 24, 2016, from http://venturebeat.com/2015/11/04/facebook-passes-1-55b-monthly-active-users-and- 1-01-billion-daily-active-users/
Mobile phone users worldwide 2013-2019 | Statistic. (2016). Retrieved April 24, 2016, from http://www.statista.com/statistics/274774/forecast-of-mobile-phone-users-worldwide/
