Apple Inc – Case Study

The historical perspective of Apple Inc. shows us that they were an innovative company that started the industries of successful computers, music players, phones and many other electronic items we have used over the past thirty years. Apple Inc. have had their ups and downs to include in depth software/hardware which was difficult for competitors and users to understand and mimic as well as holding face on their computer background with their innovative technologies of the iPod, iPad and iPhone which sparked interest once these innovations took a hold on the market we have seen over the past 10 years or so.

Apple Inc.’s competitors were highly successful in the early 1990’s with their mass market in businesses, schools and homes around the world and the ease of communicating across cultures with their computer technologies. They constantly gave Apple Inc. a run for their money with their innovative/similar music players, portable computers, smart phones and desktop operating systems. Current Situation:

Strengths

Apple Inc.’s current strengths include the highest market share and industry selling percentage of digital music (iTunes), music players (iPod & iPod Touch), smart phones (iPhone) and tablet computers (iPad) all over the globe. They have also increased their sales in portable computers for all walks of life due to the popularity and versatility of the above mentioned technologies.

Additionally, strengths of Apple Inc. include; (Meuller, 2010) – Product development. Doesn’t invent the market, but its products set high standards for the market. – Design and utility. Sleek, not clunky. For instance, the desktop computer is part of the screen, not a separate box with wires; the iPhone has very few buttons and feels nice in the hand. Products are easy to use, almost intuitive. – Marketing. Clever and takes advantages of people’s frustrations with other hardware. – Brand name.

– CEO Steve Jobs. Visionary and charismatic.

Weaknesses

A weakness that Apple Inc. currently has is the learning curb of users transferring over to Mac operating systems from Microsoft and other competitors. An additional weakness they currently face is the downfall of their iPod sales and revenues.

Additionally, weaknesses of Apple Inc. include; (Meuller, 2010) – Very proprietary and controlling. Won’t open the operating system to outsiders to develop hardware to work with the products, keeping hardware sales to itself. While this keeps design control inside and up to standards, it has hurt wide adaptation of its hardware, especially computers, where it has a relatively small market share. Apple has veto power over Apps sold. – CEO Steve Jobs. He has been described as a control freak and very demanding. When he dies, the company will take a severe blow. When his health was in the news, his secretiveness damaged the company’s reputation. – Not shareholder-friendly. Has abused option granting in the past and refuses to pay a dividend despite a huge (and growing) cash level, no debt, and gobs of free cash flow.

Opportunities

Opportunities that Apple Inc. has are the avenues to perfect their technologies of iPhones, iPads, desktop computers and portable computers. These opportunities could be as simple as making their computer operating systems more easily understood or providing quick/easy education for these systems; similar to what most Microsoft operating systems have available for all walks of life (i.e. businesses, personal professionals, students etc.).

Additionally, opportunities for Apple Inc. include; (Meuller, 2010) – Very loyal customer base which has expanded beyond the Mac-heads of the 1990s with the iPod and the iPhone. The iPad has had a very successful launch. This seems to be leading to more sales of computers. – Has a well-deserved reputation for high-quality products that work smoothly. New products are generally well-received and have a built-in purchasing base. – Move into other computer or media product spaces that are not served well. Can continue to design the standard-setter for those spaces. – A new version of Apple TV could take advantage of today’s more highly developed Web.

Threats

The threats Apple Inc. face, are their competitors in the smart phone, tablet and portable computer industries. Their competitors are constantly developing similar technologies which give the consumer a choice in possibly acquiring a competitive device that still gets the same job done.

Additionally, threats for Apple Inc. include; (Meuller, 2010) – Big ideas are easy to copy. Microsoft copied the graphical user interface, and even Linux has a version. The touchscreen interface is being used in other phones (e.g. Android). Apps are being developed for other smart phones and devices. – High-priced products. Apple priced itself out of the personal computer market, and that remains a problem. Other smartphones that look and behave similarly to the iPhone are less expensive. – Google is moving into Apple’s smartphone space by giving away the operating system, and it has announced that it will also be moving into the TV space. Both companies are well-funded, so any battle between the two could be long and ugly.

Described Central Issues:

The first central issue that I find was that Apple Inc. started out as a very promising and successful computer manufacturer. This soon took a turn for the worst when IBM and other computer companies developed a far better and user friendly personal/business operating system. Apple Inc. struggled for some years after this but responded in full force in 2001 when they released their first iPod and in a short time to follow, they released their iTunes site where one could download their favorite music at a very affordable price. It expanded from there with multiple forms of the iPod and other forms of entertainment like movies, TV shows etc.

Another central issue Apple Inc. is facing is to stay competitive in the smart phone, tablet computer and laptop/desktop computer business. Multiple companies around the globe are coming up with similar and innovative models of these systems that rival what Apple Inc. have on all levels. Right now though, Apple Inc. has a great hold on the market with their popularity and versatility of their products. I think it will take much more than a rival system to put Apple Inc. below the top of the ‘food chain’ per say in these markets.

Described/Evaluated – Alternatives & Solutions:

None at this time…Apple Inc. have a good foot hold on their market and business strategies.

Developed Implementation Plan: (Morgan & Herman, 2011)

The best course for the firm to follow in order to maintain their current position is to continue following the strategies in place with only a few minor changes. Some of the aspects they could follow are; Maintain their position as an innovator in the industry: Maintaining their position as the industry innovator means that Apple will continue to reap the rewards of having the latest and greatest new gadget. Throughout the history of the firm, innovation has set Apple apart from the rest of the industry and propelled them into the success they are today. Therefore, if the strategy works, keep on using it. Integrate vertically & Diversify their market: Apple has already begun the process of vertical integration with the purchase of a microprocessor supplier. Most all the vertical integration Apple should consider would be backwards in the value chain. If they can gain control of their suppliers they will have more power over their cost structure, opening the doors to saving money for the firm. With the success of all the Apple products, a number of firms have popped up to sell accessory products or services similar to what Apple offers.

These smaller companies draw revenue away from Apple as they offer the same products or services at greatly reduced prices. Should Apple buy out these competitors they could reclaim lost revenue and exact a measure of quality control to protect their brand image from imitators. Acquire a new CEO: Steve Jobs is an integral part of Apple’s success. Unfortunately, his failing health has made him a liability to the future of the company. Apple should start the process of searching for a new CEO with the same drive and ambitions but keep Jobs on in an advisory role so that Apple may still benefit from his singular talents. In doing so, Apple will be prepared should Jobs be unable to perform his duties and continue business as usual. Expand even further into the international markets: Currently Apple is not present in many foreign markets besides Europe and Japan. Apples competitors, Dell and Hewlett Packard, are both sold throughout the world. For Apple to continue to grow and stay competitive they need to expand to the international market. We think that the international market would increase their market share. Most teens in foreign countries are interested in immolating the younger American generation. If Apple used the same marketing strategies that they have captured the American youth with, Apple could be very successful in the foreign market and grow to an even stronger company.

Works Cited

Meuller, J. (2010, June 7). Apple: Strengths, Weaknesses, Opportunities, Threats. Retrieved January 21, 2013, from The Motley Fool: http://www.fool.com/investing/general/2010/06/07/apple-strengths-weaknesses-opportunities-threats.aspx

Morgan, J., & Herman, D. (2011). Apple Inc. Case study.