Strategic Management
Strategic management-Apple Inc.
SWOT ANALYSIS
Competitive forces
Apple has an excellent opportunity to expand its distribution network. In India alone, there’s a weak distribution channel. Direct distribution would help apple tap into India’s market instead of the indirect distribution channels by third party network carriers. Small expenditure on research and development in introducing new products has given the rivals a share into the market. Its research and development spending is lowest compared to its competitors.
General forces
Apple’s IOS operating system is often incompatible with other manufacturer’s hardware. Compared to android and windows users may find it hard to use a different OS. Emerging economies targeting wealthier individuals come from developed regions. Smartphone markets are already saturated, and this would mean introducing new products (Abraham, 2013).
Treats
Competitive forces
Apple's rivals are well funded to compete with apple devices. The companies are experienced and serve a huge market with cheap devices compared to the high end but expensive apple products. The steadily growing Android market share has put the apple team into the pressure of innovation. Google and its apps are becoming essential for developers and will be of favor more than the iTunes market.
General forces
Currency exchange rates tend to affect multinational companies. The US dollar is expected to strengthen over other currencies thus disadvantaging the other countries that Apple operates. Most of its revues come from the outside of the US thus with such predictions this would mean revenues are expected to decrease in a few years to come. Apple is not free from infringement. A slight lawsuit over patent issues would damage its reputation. Technology companies are susceptible to such cases due to software lines that could have been patenting by other businesses.
Strengths
Apple Inc. has excellent advertising capabilities with huge advertising expenses. Moreover, the company boasts of a strong extensive distribution channel from its responsive online stores, direct sales force and arguably vast retail store network. The company boasts of a robust financial performance. Revenues of the company are enormous leading to successful growth for example in 2015 alone the company made a whopping 233billion in revenues a profit margin of 22.84%. Financial strengths are part of the company’s strengths to its business strategies. Reputation and brand awareness have contributed to confidence by consumers worldwide. In 2015, it was listed as the most valuable brand.
Weakness
Apple products have a high selling price for its products due to a premium pricing strategy. Apple has most of its revenue coming from the high-end market. Limitations to the middle and upper class compared to the competitors who cater to the needs of the lower bracket. Limitations in distribution channel because the company carefully selects its authorized sellers.
Value chain analysis
Name of Apple Inc. core business is Apple
Apple Inc. is involved in inbound and outbound logistics which has created highly sophisticated supply management as well as efficient warehousing and distribution channels. Apple Inc. services are exceptional quality for consumers. The company maintains centers in the main cities around the globe for warranty maintenance, education, and training upgrades. Sales and marketing through various distribution network through promotions, customer management, and analysis market research.
The company has outsourced through quality maintenance as well as innovations in a slick looking product which is unanimous among the young adults (Evans & Lindsay, 2013). Various versions of their operating system have tried to ward off flaws boosting the flexible system.
Apple Inc. continues to gain value through its iPhones, IPads and Apple watch. iPhones have greatly impacted the company's sales through the creation of innovative features for the smartphone market. IPhones continue to change the company's strategy through developing various robust models that are slick and serve the latest technological trends.
Performance analysis
Financial analysis
Apple continues to generate massive cash flows thus maintaining a healthy balance sheet. Revenues from the sales in various countries boost the company’s growth expectation for example in China the expected sales were $12billion, but the company saw a sale of $18.4billion in 2016.
Strategic analysis
Apple Inc. marketing strategy has significantly provided for the company’s physical presence. Earlier on, it was strictly limited in the US, but proper distribution channels have allowed the company tightly control the image of the brand and provide excellent customer services. Matching success and impacts like store models are difficult for other firms to achieve.
Competitive advantage analysis
Apple Inc. has more than doubled the NASDAQ return (Heracleous, 2013). This was attributed to the growth of the popularity of the iPhone. Apple devices run on IOS comparison to most manufacturers that run on android and windows meaning the consumers want to remain within the apple ecosystem. The brand is considered to be a luxury brand due to its high quality and maintenance system thus making the company control its pricing strategy. The brand name iPhone has significantly helped the company maintain its value compared to its rivals.
Reference
Abraham, S. (2013). Will business model innovation replace strategic analysis?. Strategy & Leadership, 41(2), 31-38.
Evans, J. R., & Lindsay, W. M. (2013). Managing for quality and performance excellence. Cengage Learning.
Heracleous, L. (2013). Quantum strategy at Apple Inc. Organizational Dynamics, 42(2), 92-99.
