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Essay: Apple analysis inc. SWOT / PESTEL

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  • Apple analysis inc. SWOT / PESTEL
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Industry Information

The total industry size in terms of sales is ever increasing with the financial statistics according to Apple’s website, from a press release on January 28, 2020 stating that “apple is providing the following guidance for its fiscal 2020 second quarter” (Quayle, 2020). The statistics show “revenue between $63.0 billion and $67.0 billion, gross margin between 38.0 percent and 39.0 percent, operating expenses between $9.6 billion and $9.7 billion, other income/(expense of $250 million, and tax rate of approximately 16.5 percent” (Quayle, 2020). This quarter in comparison to others has hit a record.

Constant rapid growth of development of new product lines, industry expansion, and the increasing dependence for technology has helped with the overall expansion of this industry. Apple Inc. is an international firm manufacturing in innovative computers, cell phones, watches, and other devices including separate product lines. This company also distributes music, books, videos, and more globally across their retail stores. With the technological innovation paired with new product lines, CEO, Steve Jobs, has made Apple Inc. very successful. According to Apple’s press release on January 28, 2020, “international sales accounted for 61 percent of the quarter’s revenue” (Quayle, 2020). As reported by Statista, statistical results stated that results Apple has a brand value of $309.53 billion. Statista not only recorded the brand value, but that Apple is recognized as the most valuable technology brands worldwide in 2019.

Apple reaches many target markets, and have a wide range of buyers whether it be consumers, government, education, or business. Apple uses a location as a strategy to place their stores in high-traffic locations, within malls or busy shopping areas.

According to the Apple Supplier Responsibility 2019 Progress Report, it reveals that staff members of Apple value their work at a high standard “we believe that if we’re not finding areas to improve, we’re not looking hard enough. If we discover that standards aren’t being met, we work side by side with suppliers to help them improve. If a supplier is unwilling or unable to meet our requirements, we end our business relationship with them” (2019). Apple has high standards and ensures that their employees, company, and regulations are in line.

Company Information

According to Michael Calore in a Wire article, Steve Jobs was classified as the greatest technological innovators of our time. (2011). Calore also stated that the first Apple Computer was founded on April 1, 1976, by Steve Jobs, Steve Wozniak, and Ronald Wayne pricing at $666.66. Calore then reported that in 1977, Apple released the Apple II which was immediately successful. Furthermore, he reported that the Macintosh then arrived in 1984, “integrating both graphical interface and mouse” (Calore, 2011). Apple then released the Apple IIC, similar to a laptop. The company’s headquarters are in Cupertino, California. According to a team of researchers, Apple has approximately 132,000 full-time employees. Apple supplies customers with phones, laptops, iPads, iPods, headphones, watches and many more products. Apple has its own App Store, Apple Care, Apple TV, Apple News, and iCloud. This company also provides consumers with Apple Music, providing millions of songs available to download. Apple has options for all of the needs in every demographic and target market. Consumers, expanding globally, are interested and influenced by Apple as a brand, and their products they produce. People across the globe are interested and influenced by Apple as a brand.

Prospect Information

Apple Inc is a manufacturer and has been in the business for over 45 years. The firm is very large, offering business globally. The products range for all technological needs whether it be an iPhone, iPod, Apple TV, Air pods, MacBook laptops, watches, Apple Care, or other products. Apple meets the need of any customer in the technological market.

Steve Jobs, inventor and innovator expressed, “you can’t connect the dots looking forward; you can only connect them looking backwards. So, you have to trust that the dots will somehow connect in your future. You have to trust in something–your gut, destiny, life, karma, whatever. This approach has never let me down, and it has made all the difference in my life.” Tim Cook is now the CEO of Apple and has been since 2011.

The potential problems that can occur within this firm is the constant need to adapt to upgrading technologies and listen to the needs of the consumers. Apple also struggles with competition from other branding. Another problem that Apple can have is the cost of phones to increase as technology is becoming more advanced, and there will be less of a demand as the products become more expensive.

Apple Inc, created Apple Watches which not only record the time but offer cellular data including texting, notifications, email, weather, news, and records workouts. It not only offered a need for people, but satisfied all of their wants at their wrists as well. Everyone can interact in their day-to-day events, including making calls right from their wrists. In doing so, Apple has adapted to the constant need of communication through demand of technology, but also, they have competition. Apple has many consumers ranging from all types of demographics, ranging from middle class to upper class users. Most upper-class members of society have most of Apple’s branding products and will continue to adapt to their updating technologies. The elderly is trying to adapt to the technology of Apple by becoming educated in iPad and iPhone usage.

Product/Service Information

Sales for Apple Inc are ever increasing and the adaptability to new technologies have helped the products become more demanding. The sales have slowly increased over the past decade and profit in 2018-2020 are the highest it’s ever been. Apple Inc offers their own Apple Care to support users for warranties and care systems for all of their product lines. Apple Care is an extra cost to their products.

The Apple Watch’s first generation was invented on April 24, 2015. The Apple Watch has released 5 models since then. The Apple Watch is made of stainless steel, with many options for the wrist band. The obdurate performance of the watch is high, as it offers not only a time but a heart rate monitor, all of your Apps at your wrist, phone and texting, weather, news, workouts, sleep tracking, and many more. The suggested retail price for these products can range from $300-$550. Mark Sullivan, writer of an article in Venture Beat states Apple retrieves an immense amount of profit from the watches as the total cost to produce the watch is $83.70.

Apple takes initiative in the people who build the products, stating that “we hold ourselves and our suppliers to the highest standards to ensure everyone is treated with dignity and respect.” By doing this, Apple ensures that their employees feel welcomed and have the right training and abilities to perform at their best. They also state “we continuously challenge ourselves to expand our education programs and provide skill-building opportunities that meet the needs for those in our supply chain.” (2019) Apple indicated in this report that since 2008, they supplied educational programming among over 3.6 million employees. These programs help the employees learn new skills, earn degrees, and expand career options. When becoming an employee with Apple, not only do you obtain this education but they also provide health and wellness education for mental and physical health.

Our education programs are designed to provide a path to advancement for the people in our supply chain, from life skills to vocational certifications and college degrees.

In 2017, a program was created to share Apple’s Swift coding technology with supply chain employees. Swift was developed by Apple as an intuitive tool that makes learning to code fun and interactive. – new career path

In 2018, over 1500 supplier employees earned a college degree through the SEED Program. Since SEED began, over 13,500 supplier employees have enrolled in a degree program.

Competitor Information

Apple has many competitors as they have many product lines. As for phones, their main competition is Samsung, whereas they are trying to compete with new and upgrading technologies. Another competition Apple has is Netflix and Disney Plus, in replacement of Apple TV. There are also Smart Watches in replacement for the Apple Watch.

Samsung also makes technological consumer products such as phones, electronics, home appliances and many more. In comparison to Apple, according to an online source, Samsung is considered one of the 10 top most valued companies in the world. Samsung was reported to be introduced in 1938, an online source stated, where Lee Byung-Chill founded the company. To be one of Apple’s top competitors, Samsungs’ smartphone is leading the market, where they are both highly competitive among one another.

Samsung does have a watch similar to the Apple Watch, but it isn’t in high competition in comparison to their smartphones. The Samsung watch is more professional whereas the Apple watch has more of an athletic style. Samsung also has a “Samsung Care” similar to Apple Care which provides customers with 24/7 support, protection, and warranty. Apple and Samsung are highly competitive in the smartphone market but have less competition for their smart watches.

Appendix A – PESTEL

Political:

• Stable politics in developed countries

Economic:

• Rapid growth of developing countries
• Increasing disposable income among target customers
• Rising value of the US dollar

Social:

• Risking use of mobile use
• Increasing dependence on technology
• Location services for family and friends

Technological:

• Growing cloud demand
• Technological integration in businesses
• Growth in product lines / market
• Growing technological capabilities of other competition

Environmental:

• Energy efficient trend
• Business sustainability trend with apple
• Apps for environmental education

Legal:

• Increasing privacy regulations

Appendix B – SWOT

Strengths:

• Highly adapting to new trends and technologies
• High profit margins
• Strong brand image

Weaknesses:

• High selling prices
• High-end market segments
• Limited distribution

Opportunities:

• Economic, Sociocultural, and Technological Trends
• Development of new products
• Higher sales with higher demand

Threats:

• Competition, threat of new entrance
• New/upgraded technologies from other companies
• Intensifying Rivalry

References

Apple Inc. SWOT Analysis & Recommendations


Nathaniel Smithson, February 14, 2019

https://www.inc.com/peter-economy/steve-jobs-used-a-remarkably-powerful-decision-making-strategy-that-will-transform-your-business.html
Peter Economy, March 27, 2018

https://www.wired.com/2011/10/steve-jobs-greatest-achievements/
Michael Calore, October 5, 2011

Number of Apple Employees Worldwide


Apple’s Official Reports, Dazeinfo GraphFarm, September 27, 2019

Apple Inc. PESTEL/PESTLE Analysis & Recommendations


Jessica Lombardo, June 9 2019

Apple Watch’s components cost just $81.20 — highest markup of any Apple product


Mark Sullivan – April 30, 2015

Apple Inc SWOT Analysis. (2019). Apple Inc SWOT Analysis, 1–8. Retrieved from https://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=139070158&site=eds-live&scope=site

https://www.apple.com/ca/supplier-responsibility/pdf/Apple_SR_2019_Progress_Report.pdf
Apple – 2019 Progress Report

https://www.apple.com/newsroom/2020/01/apple-reports-record-first-quarter-results/
Kristin Huguet Qauyle, January 28, 2020

https://www.statista.com/topics/847/apple/
Shanhong, Liu, February 12, 2019

https://www.samsung.com/us/support/premium-care/
Samsung website – 1995 – 2020

30.1.2020

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