Course Code: MGNM571 Course Title: Corporate strategy and entrepreneurship-I
Course Instructor: Dr. Mohit Jamwal
Academic Task No.: 01 Academic Task Title: Apple
Date of Allotment: 19/09/2021 Date of submission: 06/10/2021
Student’s Roll no: A07 Student’s Reg. no:
Evaluation Parameters:
Learning Outcomes: (Student to write briefly about learnings obtained from the academic tasks)
Declaration:
I declare that this Assignment is my individual work. I have not copied it from any other student’s work or from any other source except where due acknowledgement is made explicitly in the text, nor has any part been written for me by any other person.
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Apple
Introduction: The Apple Company is basically an American multinational company that designs and markets customer electronics, processor software and personal computers. Apple was founded by Steve Jobs, Ronald Wayne and Steve Wozniak in 1976 in order to develop and sell wozniak Apple Computer. It was incorporated by Steve Jobs and Steve Wozniak as Apple Computer, Inc. in 1977, in order to sales of apple computers. Apple Inc. was formerly called as Apple computer company during the period of 1976-1977 after this they changed their name to Apple Computer, Inc. from 1977-2007. During the journey to be a success, they faced many hurdles and Apple returned to profitability under the revitalizing think different campaign which launching the iMac and iPod. As the market for personal computers expanded and evolved through the 1990s, Apple lost considerable market share to the lower-priced because of Microsoft Windows on Intel PC clones.
In 2007, the company launched the iPhone to critical approval and financial success. In 2011, Steve Jobs resigned as CEO due to health problems and died two months. He was succeeded by Tim Cook. Its headquarters located in Cupertino of California, U.S. The Company has 514 retail stores in different location. Apple acquire more than 135 companies. Apple Inc. have 147000 no. of employees.
Apple is world’s largest company of Information Technology and second largest in the manufacturing of the mobile phones all across the globe. The new and first generation of the smart phone (iPhone) was launched in the year 2007 at a simple amount for the 4 GB and 8 GB apple models.
The Company has meanwhile start building design and sold computer software, consumer electronics goods and also the online services like iCloud. The entire hardware product of the company includes iPad tablet computer, iPhone, iPod media player which is portable, Mac book and the Apple smart watch. While the consumer software of the company includes OS X operating system, the iOS, the safari internet browsers, iTunes media player systems, and the iWork creativity plus productivity suites. The web based services include the Mac App Store, iCloud, iTunes Store, the iOS App Store available at the site of the company.
Recently, Apple launched the iPhone 13 series on September 14, 2021 during its California Streaming event. The company did not modified the design of its high-end iPhones this year as the company had presented a new design just last year with the iPhone 12 series and it usually follows the same design for up to three years. Apple has presented new features and better hardware. The company launched four new iPhones this year i.e., iPhone 13 Mini, iPhone 13, iPhone 13 Pro, and iPhone 13 Pro Max.
Most importantly, the company has carried a new processor, the Apple A15 Bionic, improved cameras, a 120Hz high-refresh-rate OLED display with a slightly smaller notch and bigger batteries. It also presented the Cinematic Video camera style for depth-of-field effect. The company has also presented faster charging for some iPhone 13 models.
All the new iPhones run iOS 15 which is out of the box and they will take at least five iOS updates in the future. Other connectivity features could include dual-frequency GPS, AirPlay 2, Airdrop, Bluetooth 5.2, dual-band Wi-Fi 6E, NFC, and a Lightning port. They will most likely be well-matched with Apple’s new MagSafe accessories for wireless charging and more.
SWOT analysis of Apple: Following are the strength, weakness,
opportunity and threat of apple.
v Apple Strength-
1. Most valuable brand: Apple is ranked #1 brand for the 10th consecutive year by Interbrand with a brand value of $612 billion.
2. Universally Iconic: Apple is one of the most trustworthy company when it comes to modified advanced computers and smart technology devices. It has lots of loyal customers with steady increment.
3. Top technology: Apple was the first to present some of the most advanced products that have altered the world i.e., iPhones and iPads. Apple is still strong-minded to build and craft better, more talented technology devices.
4. Brand of choice: It isn’t big news that Apple is a demanded product in business offices. Apple has a particular commercial page that offers top quality technology solutions for every corporation’s needs.
5. Proficient research: Apple puts full enthusiasm into its product designs. Additional research is performed to understand customer needs and requirements.
6. Expansion in services: Apple has been increasing its services portfolio for many years. For instance, about 19% of Apple’s yearly revenue ($53 Billion out of $274 Billion in FY 20) came from its services, which is the second biggest sponsor to its revenue after the iPhone.
Apple has presented many new services in 2019, such as Apple TV+, Apple news+. Apple Card and Apple Arcade (game subscription).
Apple Weaknesses
1. High priced products: Apple’s products can be considered a luxury due to their premium prices. The products are priced for middle class and high-income consumers. Low-Income consumers can’t simply afford Apple products. Due to their superior pricing, only middle class or high-class individuals can afford to buy.
2. Limited advertisement & promotions: Apple has set their lands by establishing loyal customers, even with limited advertising resources. Apple advertising trusts deeply on its iconic and flagship retail stores. Because of their success, Apple does not feel the need to have unnecessary spending towards advertisement in comparison to other big brands such as Coca Cola and Samsung.
3. Entering into area of non-competency: Apple is speedily expanding into new services such as video content streaming, game streaming, credit card competing with the leading players such as Netflix, Disney, Citi, Chase, PayPal, etc.
4. Incompatibility with other software: When a customer purchase an apple product, they enter the Apple universe. Apple’s products do not upkeep other software or technologies making them mismatched with other devices. Customers have to entirely purchase Apple apps or accessories to continue using their Apple products.
5. Allegations of tracking: Tracking users weakens trust. Apple has been suspect of using tracking apps in its phones, which revealed the exact location of users. Even though the latest version of Apple’s phones gives users the right to decay the tracking, trust is hard to regain once it is lost.
6. Unfair business practices: Apple is under examination for unfair business practices after receiving overheads to make Google’s search engine as the default search engine for its Safari web browser.
Apple
Opportunities
1. Consistent customer growth: Apple has been controlling the technology segment for years now. They provide top quality and cutting-edge technology that proposals an advance in customer experience. Apple can always trust on the power of the internet for future opportunities to gain new customers and form new alliances.
2. Qualified professionals: Apple’s researchers, developers and product specialists are a team of highly qualified specialists that have years of experience in branding customer products. With the expansion of their team, Apple can nonstop build new opportunities.
3. Expansive distribution network: Apple Inc. has the opportunity to enlarge its distribution network. Currently, the distribution network that Apple has is very boundless and leaves room for negligible growth. Apple can make higher revenue and sales if it focused on creating an extensive distribution network. Furthermore, the company can profit from diligent marketing and promotions.
4. Lack of green technology: Apple is yet to introduce products that are shaped using green technology. The company has not yet applied or contributed in creating sustainable technology that is eco-friendly.
5. Smart wearable technology: Smart wearable technology will soon control the world. According to Forbes, smart wearable technology device sales will twice by 2022. It will converted a $27 billion+ market with 233 million unit sales.
6. Utilize artificial intelligence: To increase its profit limits and have a strong market position, Apple should utilize artificial intelligence. In recent times, the company has extended its AI portfolio. Apple acquired Regaind, a French AI startup and Desk Connect, an AI tool. The former acquisition helps Apple to integrate intelligent search to the photos app on the iPhone, while the latter acquisition automates tasks by helping the consumers to arrange apps and features with a string of commands. The company should focus on extending its AI portfolio to have a strong foothold in the future.
7. Expand music streaming services: The youthful population and rapid economic growth in emerging economies offer huge opportunities for expansion. Apple is already planning to increase its music streaming services to 52 emerging marketplaces in Africa and the Middle East.
8. Deliver self-driving software technology: The demand for autonomous is increasing rapidly. Apple has the expertise needed to deliver self-driving car technology rather than fully-functional autonomous or electric cars. Apple has the opportunity to focus on delivering self-driving software technology instead of building an actual car like Tesla does.
Apple
Threats
1. Coronavirus outbreak: Apple is highly in need of on China for its manufacturing and supply chain. In addition, about 14 % of its $274 billion in revenue derived from China. The outburst has expressively affected and may continue to disrupt. Apple’s sales in the fiscal year 2021.
2. Supply chain disruption: The recent events have suggestively affected and disrupted its operations. It reported flat revenue in Q2 of 2020 and declined to offer annual revenue estimates for FY2020 due to supply chain uncertainties.
3. Apple bullied by counterfeits: Apple has become vulnerable to third world countries illegally utilizing the brand image to sell counterfeit products. The illegal dealers sell Apple counterfeit products at the same value as an original Apple product. Counterfeit products can make potential customers believe that it is a product made by Apple with low quality. Big news can result in negative reviews and bad publicity for the company.
4. Increasing Competition: Although Apple as a brand has solidified itself, it still faces threats from competitors. With the development in technology, brands like Samsung, Google, and Dell are giving Apple tough competition. As the competition is getting stronger, Apple either has to introduce new technologies or revise its pricing policy to stay ahead of its competition.
5. Market Penetration: There has been a significant change in market penetration by other brands in the smartphone market. Companies like Samsung, HTC and Lenovo are using Android software to create new smartphones. Currently, Android has captured 72% (approx.) of the market share, while Apple has only 26% (approx.) of the market share globally.
6. China Tariffs: US government has imposed a complex tariff on imports from China, increasing the overall cost of the products. Consequently, it adversely affects the gross margin on the products and may make the product more expensive for customers.
7. Lawsuits: 60 class-action lawsuits have been filed against Apple. Consumers were upset and baffled when Apple announced that it deliberately controls CPU performance on iPhone models with older and degraded batteries. The tech giant said that it did so to prevent unexpected shutdowns. Despite the clarification, consumers felt betrayed because they that Apple does not believe in transparency. This led to a number of people filing lawsuits against the company.
External
Factor Evaluation (EFE) Matrix is a approach that used to examine company's external
environment and to recognize the available opportunities and threats. In another words, the external threats and
opportunity matrix is a tool that is useful in identifying the opportunities
and threats that Apple Inc. is under the externalities from. The opportunities
will Apple to progress further while the threats will serve as a interruption
for their growth.
External Factor Evaluation Matrix of Apple |
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Threats |
Opportunities |
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Internal
Factor Evaluation (IFE) Matrix is a strategy tool used to evaluate firm's internal
environment and to reveal its strengths as well as weaknesses. In another
words, it is a useful tool in evaluating Apple strengths and weaknesses within the organization in
order to develop new strategies to become better. The strengths allows for the
company to increase their advantage and edge whereas their weaknesses serves as
the company’s room for improvement so as to prevent
getting behind the market.
Internal Factor Evaluation of Apple |
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Weakness |
Strengths |
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Competitive
Profile Matrix (CPM) is a strategic analysis tool that allows business owners,
stockholders and other interested parties to realize the strengths and
weaknesses of all main competitors in an industry. In another words, it is a
tool that can be utilized in order to assess and evaluate how Apple Inc. performs as
compared to its direct competitors in the industry. The critical success
factors are used as a measurement basis by which a general weight is provided
in order to compute the weighted scores of the companies. The ratings are classified
as 1 for Excellent, 2 for good, 3 for Moderate and 4 for poor.
Competitive Profile Matrix |
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Apple |
HP |
Microsoft |
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Critical Factor |
Weight |
Rating |
Weighted Score |
Rating |
Weighted Score |
Rating |
Weighted Score |
Advertising |
0.06 |
4 |
0.24 |
2 |
0.12 |
3 |
0.18 |
Product Quality |
0.07 |
4 |
0.28 |
3 |
0.21 |
4 |
0.28 |
Customer Loyalty |
0.07 |
4 |
0.20 |
2 |
0.14 |
2 |
0.21 |
Product Value |
0.15 |
2 |
0.20 |
2 |
0.10 |
4 |
0.20 |
Market Share |
0.05 |
4 |
0.20 |
2 |
0.10 |
4 |
0.20 |
Financial Position |
0.02 |
4 |
0.08 |
4 |
0.08 |
4 |
0.08 |
Total |
0.42 |
22 |
1.2 |
15 |
0.75 |
21 |
1.15 |
The CPM matrix computed that how Apple Inc. compares with its competitors, Microsoft and HP. As we can see Microsoft garnered the highest weighted score with 1.15 while Apple positions itself in second place with 1.2 weighted score. This weighted score serves as an indicator of how their critical success factors works for the company. With this it can be said that Apple can afford to improve their public concern, product value and price competitors in order to increase their performance in the market.
The Internal-External
(IE) Matrix is a strategic management tool which is used to examine the
current position of the divisions plus suggest the strategies for the future.
This tools is similar to BCG Matrix. The Internal External
matrix categorizes Apple in different divisions. The Internal External matrix
is dependent on two key aspects that are the total weighted scores of the
Internal Factor Evaluation (IFE) and the total weighted score of External
Factor Evaluation (EFE). When Apple’s IFE score is less and the EFE score is
more are put together they indicate that Apple should grow and build. The Grow
and build strategy should mainly concentrate on market development.
The results of entire analysis: We can came to analysis that Apple has to
improve many things, even they has many opportunities to get in future and present. For its existing strengths that would bring
the company to a profitable and favorable position in the market. Its strengths
include the success of their products evidenced by the revenues generated by
it, specifically their iPhone products. On the other hand, Apple Inc. has their
weak spot attributable to the low profit generation from some of their
products, portables and desktops specifically, as well as the increase in the
probability of their products to become out of style. They able to take
advantage of the opportunities in the market considering that they have an
existing edge from their competitors through the warm acceptance of the
customers and generation. On the other hand, Apple Inc. is imposed with threats
from the susceptibility of the economy and industry to fluctuations as well as
tight competitions from emerging and existing competitors in the industry.
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