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  • Subject area(s): Marketing
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  • Published on: 14th September 2019
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  • Number of pages: 2

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Apple: How to Sustain a Competitive Advantage?

1.   Apple SWOT analysis:

Strengths:

a. Innovation: Steve Jobs believes that “Innovation distinguishes between a leader and follower”. With its continuous innovation in various aspects, Apple continues to be leader in all areas.

b. Advanced marketing capabilities.

c. Strong brand image gained from superior and high quality design.

d. Huge and loyal customer base.

e. Solid cash reserves that can be used for research, investment and expansion purposes.

f.   Highly efficient supply chain that can cater huge requirements and withstand any fluctuations in market demand.

Weaknesses:

a. High cost makes its products unreachable to some sections of consumers.

b. Limited range of products and designs make users with specific needs to look for alternative products.

c. Incompatibility of features such as Bluetooth and access to Memory devices.

d. No major improvements in technology apart from design in its latest products.

Opportunities:

a. Demand for smartphones and tablets is increasing day by day.

b. iPhones and iPads are not exclusive to household usage, its integration capabilities with mac notebooks and computers has made it appealing even in the corporate environment.

c. Easy integration with iCloud can increase market for devices and also expands its revenue opportunities from already sold devices.

Threats:

a. Leadership in Apple is under question since the death of Steve Jobs who has been the face of innovation in Apple.

b. Increasing competition from local handset manufacturers in potential market areas such as India and China.

c. Damage of reputation due to alleged involvement in tax scandal and security violation suits.

d. Other smartphone manufacturers such as Samsung are creating aggressive competition.

e. Rising labor costs in countries like US where Apple manufacturing plants are located.

Google SWOT analysis:

Strengths:

a. Unique and efficient search algorithms and huge arsenal of patents.

b. Widely accepted smartphone OS platform, Android.

c. Innovative and universally compatible products and strong brand image.

d. Innovation enhancing environment for employees by letting them utilize 20% of their time in developing their own projects and large organizational size.

Weaknesses:

a. No differentiation in content as search engine cannot check the credibility of content.

b. Totally dependent on internet so it can't expand into developing countries where internet coverage is yet to be increased.

Opportunities:

a. Rapid development in internet availability in developing countries.

b. Accelerating innovations in telecommunication to provide faster data communication.

c. Expand its Google fiber and enter into new arenas of business apart from advertising.

Threats:

a. Competition from other search engines such as Yahoo, Bing etc.

b. Copyright infringement lawsuits regarding Android OS and smartphone technology.

Amazon SWOT analysis:

Strengths:

a. Leading provider of cloud computing services.

b. Efficient delivery network, free delivery in certain areas.

c. Expansion by acquisitions is proven successful in generating revenue.

Weakness:

a. Shrinking margins for amazon because of price wars and free delivery services.

b. Core business of Amazon, Online shopping is not exclusive to Amazon

Opportunities:

a. Strong brand appeal and loyal customer and supplier base.

b. Introducing a smartphone into highly demanding smartphone market, as Amazon already has more than 60,000 apps running on Android OS.

c. Collaborate with handset manufacturers to provide smartphones at lower costs than supplied at retail shops.

Threats:

a. Tough competition in certain product lines such Kindle tablet from Apple IPad.

b. Increasing operating costs for holding inventories.

Microsoft SWOT analysis:

Strengths:

a. Largest desktop operating system provider in the world and software is easy to use.

b. Robust financial strength and diversified product portfolio.

Weaknesses:

a. Slow in innovations and poor in acquisitions and investments.

b. Highly dependent on hardware manufacturers to pre install OS.

c. Piracy of Windows OS and Windows office suite.

Opportunities:

a. Collaborate with handset manufacturers.

b. Increase and improve apps in the windows app store

c. Cloud services.

Threats:

a. Tough competition from Google, Apple as they have their own OS.

b. Linux being free and open source is attracting enterprise consumers.  

c. Innovative devices such as iPads are replacing market for personal computers.

2.   Summarize Apple's product segments, suggest where it can pursue growth.

Answer: Primary businesses of Apple are mobile phones, desktops and tablets. Famous apple products are iPhone, Mac, iPad and iPod. In addition to these iTunes, iCloud and applications in app store are other sources of revenue.

iPod is a portable digital music player. iTunes is introduced as a compliment to iPod. It is the online store from which customers can buy songs. iPod has revolutionized the way people listen to music.

iPhone is a multifunction smartphone which provides a unique touch based user interface and a revolutionary operating system with computer like experience. It was described as “Internet in your pocket”. It has many features like built in camera with high resolution, voice assistant, fingerprint protection, iTunes, iCloud and integration with Mac.

iPad is a multimedia tablet style computer. It is introduced as an innovative product that can give the best browsing experience. Customers now have gadget falling under a third category between laptop and smartphone.

Apart from these Apple also has another product, Apple TV, that is rather referred to as hobby than a mainstream project. It is a box that is connected to a television set to sync and play content from iTunes store and other Apple gadgets. It can even mirror the screen of these devices like iPhone or iPad to play games, surf web pages and play videos. Apple also introduced its first wearable device called Apple Watch.

Apple can pursue continued growth by doing the following:

a. Apple's greatest strength is Innovation. It needs to innovate not just in introducing new gadgets but also redesign and improvement of services and applications like apple pay.

b. Emerging markets may be the biggest new source of revenue for Apple. Apple has strong supply chain management which should be expanded to grow rapidly in emerging markets too. Having active developers in countries with emerging markets can help Apple create a loyal customer base in these markets.

c. Gaining acceptance in Enterprise market can be another major boost to Apple sales. Macs can be made more attractive to business users by enabling it with enterprise related security and device management features. Enterprise market can a stable source of income as Companies invest large sums of money in technology infrastructure and is less affected by customer defections.

d. Apple should reinforce integration of applications of Mac OS and iOS. Doing so can increase sales of applications in app store. Complementary sales can increase, demand for Mac can improve sales of other apple devices such as iPhone. This also serves the purpose of binding customer to the Apple brand and building a loyal customer base

3.   Identify at least 3 major challenges that Tim Cook faces and how he should address them – be specific.

Answer: - Three major challenges Tim Cook faces are:

1. Continuing the spirit of innovation: The major factor that put apple on the cutting edge from startup to survival to success and profitability is innovation. “Innovation distinguishes a leader and a follower”, said Steve Jobs. Steve Jobs was a pioneer of innovation. His management style kept the company ahead of market trends. Tim Cook's biggest challenge is to continue the legacy of innovation created by Steve.

2. Coming up with exciting new products and Sustaining Competitive advantage: Apple has a great competitive advantage through its differentiated products, brand loyalty and seamlessly integrated devices. Upcoming Apple products are expected to be stylish and technically impressive. Apart from prioritizing existing businesses Tim Cook needs to predicting new market trends like less expensive iPhone, next generation iPad and figuring out new businesses to enter such as making wearables and TVs  

3. Cook needs to carefully strategize the company's next moves into emerging markets. Emerging economies like China and Brazil have lot offer as they have large populations, growing disposable incomes and low cost of living. Cook needs to make some decisions regarding price strategy, introduction of low cost devices and if it should stay differentiated to compete in emerging markets.

4. Do you think Google's Android OS is a threat to Apple? And Why?

Answer: - Yes, Android OS is a threat to Apple. Android is introduced as an alternative to Apple iOS. Android became astonishingly popular in a very short time. Android OS is used by many handset manufacturers such as Samsung, HTC, Motorola, Huawei and many other local manufacturers. These companies have rapidly stolen the market share of Apple in the smartphone industry. Samsung especially has been able to create phones running on Android that are workable alternatives to the iPhone. Galaxy S3, which runs on Android operating system is considered to be viable alternative to iPhone 5. Manufacturers were not only providing alternative devices but equipped them with additional features which Apple doesn't provide. Android OS is not only a threat to smartphone market share but also to in the tablet sector too.

5. Do you agree with Apple's refusal not to comply with the government's demands based on this situation? and Why?

Answer: - Yes, we agree with Apple's refusal not to comply with government's demands.  

The FBI's request to Apple to unlock the encrypted iPhone owned by a dead terrorist to access the data stored is unreasonable. The FBI's request might seem reasonable as it demands specifically for one phone. It is also understandable that FBI wants to unlock an iPhone of a terrorist who killed 14 innocent people. But the software that FBI requests would work on any Apple phone. This can lead to vulnerability in Apple devices security that can be exploited by anyone who may not have proper intentions as FBI does.  FBI is not just asking for Apple's assistance but it is requesting Apple to develop a software that can put entire iPhone security under distress.

If developed, there are many ways to misuse this new software. Once such software is created, not just US but governments around the world would like to access this software to solve crimes in their countries. So though the US government can be trusted for protecting and enforcement of proper measures preventing misuse of power, same cannot be expected from other governments. It is also not impossible for hackers to steal the software that could unlock any Apple phone either from government or Apple servers.

There are other ways to collect evidence to get the data in the iPhone by accessing online services like iCloud and Gmail without affecting the security standards provided by Apple devices.  The FBI should rather pursue those ways.

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