Apple is a multinational company that is headquartered in the Californian State of the United States of America. The company mainly develops, sells and designs the major apple consumer electronics. The company also develops consumer hardware and software. Among her hardware products include; iPad tablets, iPhone smart phones, iPod media player (portable) introduced in the year 2001, Apple smart watches, Mac personal computers, Apple digital televisions and Mac personal computers. The company has also increased its online services that suite productivity and creativity. Subsequently, the apples consumers’ software’s have been developed to meet customers’ needs and satisfaction. This software’s included; the iTunes media players, safari browser, improved operating Systems (iOs and macOs), iWork and iLife.
External environment analysis
The firm
Apple over the years has been ranked top in annual global brands and competition. The company has largely invested in innovations and counter competition. Apple has made a move and a decision to come closer and closer to the ever growing automobile industry. The strategic company decisions that Apple Company makes, enables her to appear on the top rankings of global tech companies.
The industry the firm operates
Apple operates in a wide range of electronic lines. Her operation includes manufacturing ad designing. The company operates and continues to offer innovative products. The firm also ventures in; music, Global retail , software’s, applications and largely in personal computers.
Competition
As Apple continues to diverse in offering a wide range of products, the high tech industry has also sparked a significant competition to gain customers. Not only does the company engage in external competition but also has to deal with internal competition. The company has to face competition from major different markets including competitors such as; google, Microsoft, Samsung and Amazon firms. Apple continuously has to counter out a niche that is frequently spheered by competitors in order to dominate the market share. The firm also also faces competition in multiple and several fronts. Android and windows developed smartphones have largely sparked apple in competition. Google’s cloud storage is playing against the apples established iCloud service. On the other hand, Microsoft competes against Apple’s operating system.
Major challenges the firm faced
Despite the company’s successful market domination, Apple widely faces challenges from global firms and investors. The company is playing against forces who want to see its death. The company is facing travails that are growing fearfully from all sides of competition. Microsoft’s rejuvenated fortunes have perched the Apples products to decline. China’s ascendance to technological advancement in the consumer electronic is also a major challenge and has also impacted in the slowdown of Apples production. Chinese consumer electronics ranging from; Lenovo, Huawei and Cosmos are playing largely in weakening the apples dominance. China is largely engaging in roiling stock market and also its engagement in IT market is weaknening the Apples foreign dominance. Many ducks including; Samsung, Facebook and Microsoft continue to diminish the Apples desires and heightened expectations. Their Arsenal are marking a turbulent period within which Apple is pulling back in its stock transition. Such competition have stumbled the company’s stock.
Porters’ five forces models
This model is a powerful tool in shaping Apples competition. These forces offer insights for apple to determine the external factors facing the company. These forces shed light for apple to analyze external factors facing the company in the competitive landscape. To sustain industry leadership dominance the company is using the porter’s five forces to address bargaining power. The forces also address competition and buyer acquisition. These forces also enable the company to establish the intensities emerging from external forces. These forces are;
Competitive rivalry
Customers bargaining power
Threat from substitutes
Threat from new entries
Competition
Considerations
The influence posed from competition by apples rivalries can be classified in terms of aggressiveness and low cost switching. Aggressiveness can be analyzed in terms of; imitation, advertising and rapid innovations. How consumers can switch preferences from apple is another strategic formulation. As bargaining power is a essential variable for consideration, Apple can develop a strategy to weaken the players and customers at their individual levels. Advancing Apples feature can counter substitutes making no need of prioritizing substitutes. Apple can restrict new entry through innovations, developing strong brands and maintaining her competitive advantage.
Cost leadership strategy adopted by apple
This is a strategy that apple has highly adopted to maintain its successes in the technological competitiveness. With this strategy the company has reduced its cost of management and also production. The cost leadership strategy that Apple adopts entails;
Minimizing operating costs
Reducing distributional cost
Lowering input costs
Implication of cost leadership on economic performance
This strategy has enabled the company to establish its product prices. It has also improved the success of the company and its competence has been successful. In addition, this strategy helps the company to increase its profits. Moreover, this strategy enables the company to sustain her development and economic growth. Executing the cost leadership strategy has helped Apple to; restructure its management, redefine her strategies, sustainability, stabilization, economic empowerment and economic growth.
Internal Environment
Apple Corporation, founded by two members, Steve Jobs and Steve Wozniak, on April 1 1976, is a multi-national technology company based in the United States. In addition, its main expertise includes, design and development of computer electronics, distribution of media content and production of both computer software and hardware. It also has other product lines like the iPhone, iPad tablets, and the Mac personal computer among other products available in the Apple stores or online services. Furthermore, Apple in terms revenue, is the largest information company in the world and the second largest mobile phone manufacturer in the world. This essay seeks to elucidate an internal analysis of the Apple Company in terms of market growth percentage, industrial rivalry, market shares and the organization’s resources and competences.
Rivalry in the Industry
Apple has many competitors due to the wide range of products it manufactures. Consequently, the competitors are continuously changing and constantly strengthening in a fight for market share. However, due to the uniqueness of Apple’s products most of the consumers prefer to exclusively buy their products to stand out from the rest. Some of its main rivals include, Google, Samsung in the Smartphone industry, Microsoft and Amazon.
Competition in the Smartphone sector has come mainly from the Android powered and Windows compatible smart phones. Essentially, Samsung which has been in existence since 1988 is the main rival in market shares. In comparison, Apple entered the industry in 2007 with the launch of the iPhone, has since exceedingly surpassed the expectations by establishing a niche of consumers eager for these brand of smart phones. Lately, the competition has been between the Samsung galaxy brand of phones, and the iPhone 6 and iPhone 6 Plus smart phones. However, Apple leads in smart tablets industry with the iPad brand.
Moreover, the smart phones are run by the iOS operating system, which is solely a property of Apple Company. It also introduced a brand of smart watches. This has created products differentiation, at the same time, most applications and programs are compatible only with Apple, therefore, only Apple devices can access these services. Furthermore, Apple has cut across financial divide with their premium prices for products and services. This means that they are able to reach out even the elite in society.
Market share
Since Apple works in a saturated environment innovation has been key to keep the company relevant. New and improved products are introduced into the market regularly, this has made it almost inevitable to upgrade programs, develop better software and add new features to stimulate the already demanding consumer. This means the company focuses on market research and development to fulfill customer needs by developing new models and providing regular upgrades.
Elsewhere, Google which created the Android software will also be a stiff competitor with its entry into the Smartphone market. In the computer hardware sector, Microsoft Windows, with the PC is in rivalry with the Apple Macintosh computers. Amazon, an online retailer, is also a major competition with the company in the online retail industry.
Market growth Rate
Apple being one of the most valuable brands in the world, this means has brought about great potential in increase in revenue. By this virtue, the company has been making profits and its share value to $115 dollars per share capita. It has also made net profits upwards of 630 billion dollars in the last financial year and studies have shown the company will only grow even more in the coming year.
SWOT Analysis
A SWOT analysis is a research concerning strength, weakness, opportunities and threats of an organization.
Strengths
Its strong brand image has enabled it to stand out as one of the leading global companies in its huge production of iPhones, iPads and laptops. Huge profit margins over short period of time have been a quick source of revenue to the company. The company has valuable and high quality product compared to other companies’ e.g.Techno, Huawei, Lenovo. Hence, the products are able to face competition. The company`s chain of supply has over and over ranked the best due to experienced management systems allowing least disruptions.
Weaknesses
Its products have been proved to be very expensive as compared to other companies making it to lose clients. Apple products are not compatible with many devices e.g. the android and the windows product. Improper functioning of its products has been a major drawback e.g. its latest iOS brand hugely crashed apple devices.
Opportunities
Threats
Apple is facing huge competition from China and Japan products since they have flocked the market with cheap, quality and affordable products to clients. Manufacturing cost has greatly increased due to rise in the economy level. High taxation rates have been a drawback increasing the products price hence damaging their reputation.
Conclusion
In every business that I try to venture in I should be ready for completion, financial and managerial problems. This should be a motivating factor to my company by learning from my mistakes, being more innovative and researching more to overcome competition and achieve my company`s goals.
