SWOT Analysis of Apple Inc.

Apple SWOT Analysis

Apple Inc. was founded as Apple Computer Inc. In 1976 by Steve Jobs and Steve Wozniak. They dropped the word 'computer' from the company name 30 years later, hence the current name - Apple Inc. (Apple Inc., 2014). Apple is well-known for the iPod, the iPad, the iPhone and the Macintosh line of computers.

The top management of Apple Inc. consists of the CEO, 6 directors and the Chairman of the Board. The subordinates are the CFO and directors of different departments (Apple Inc., 2014). It applies a collaborative organizational structure where all members are encouraged to work together to come up with ideas aimed at developing the company.

Although it is well-known for its success, Apple Inc. has also had its fair share of criticism. In 2010, Apple was criticized for banning iPhone users from downloading the Google Voice application although it later allowed the same. It was said to practice unethical business when it forced the European Union consumers to buy songs off I-tunes only. Steve Jobs was also in the public limelight when he banned all books published by Wiley and Sons from Apple stores, his reason being he did not approve them publishing his biography without his approval (Apple Inc., 2014).

Apple Inc. has experienced immense growth. The death of Steve Jobs was a major setback but according to recent reports, the new CEO Tim Cook is doing well in running the company. As of September 2014, Apple Inc. reported quarterly revenue of $42.1 billion and a quarterly net profit of $8.5 billion (Apple Inc., 2014).

The company's strengths and weaknesses

The strengths of a company are the areas that give it a competitive advantage over its competitors. An entity could be richer in terms of resources, competencies or ideas (Ritcher and Pahl, 2007). Apple Inc. has products that are linked together. For example, when consumers buy personal computers, they will need complementary software. Since a personal computer might not be suitable for travel, a consumer may seek an iPad which is easier to carry around. Another consumer may also prefer an iPad that can be used for both cell phone and music needs. Such convenience guarantees customer loyalty. Apple Inc. is therefore well-known for its loyal base of customers (Jeynes, 2013).

Apple is a leading innovator in mobile device technology. The CEO, Tim Cook, stated that "2014 was one for the record books, including the biggest iPhone launch ever with iPhone 6 and iPhone 6 Plus" (Apple Inc., 2014). It was also able to come up with new user friendly products and use the best tailor made designs.

Apple is well-known for its good financial performance. Luca Maestri, Apple's CFO, stated that in the last quarter of 2014, they "earned a record $13.3 billion in cash flow from operations…bringing cumulative return to $94 billion" (Apple Inc., 2014). The company's innovative products have also built the brand reputation. This is also as a result of Apple's good marketing skills, which reach every target market.

Apple Inc. has a number of weaknesses that threaten the profitability of the firm. The price of its products is extremely high as compared to its competitors. This poses the risk of the company losing its market share to competition. Increased competition could also mean long-term decline of the gross margin. The company has recently fallen victim to bad publicity after it was sued for patent infringement. A few of its products were also confirmed as defective which greatly reduced their sales (Jeynes, 2013).

Changes in management have also had a profound effect on the company's operations. The transition from Steve Jobs way of management to that of Tom Cook has slowed business down as the employees have had to adapt to the new regime.

The company's opportunities and threats

Apple Inc. has great potential for growth because it a leading player in the market. Since it is one of the best innovators, most companies have to borrow innovative ideas. This often leads to patent infringement, meaning that the company could sue the defaulters and collect substantial damages. Apple Inc. should also consider acquiring start up firms with better ideas, as it is financially capable of doing so.

One of the greatest advantages Apple Inc. has over its competitors is the fact that its products are in great demand before they are even released to the market. Most are in fact sold out within the first two months. Currently, consumers are waiting for the next series of the iPad and the iPhone.

The Smartphone market is bound to grow in the near future. The trends keep changing and consumers eagerly wait for more products to see what they are like. This is an opportunity for Apple Inc. To come up with new software and better mobile devices that will satisfy new market needs.