In 1977, Apple incorporation takes the first step to enter in the production of the personal computer, but due to the mismanagement they lost the competitive edge over its rival companies such as Microsoft, IBM, and Dell. Apple incorporation operate in various functions which ranges from music industry to mobile industry, not only they design, but they also produce their computer software’s which is known as IOS. Apple Incorporation has diversified its product portfolio by entering into venture with the music world by the development and marketing of iP0ds, and iTunes. Apple Incorporation maintains its competitive edge by its innovative production and application. However, there is also a huge drawback, as its rival are able to produce its replica, steal its creative and innovative applications. This detailed case study is focused over the factors which are affecting the Apple Incorporation. Firstly, the Apple Incorporation is analyzed in the macro-environment by applying the PESTEL analysis, and then to analyze the industry and sector impact, SWOT, Porter’s five forces model and Mckinsey’s 7s framework are used to conduct the analyses of the company. At the end, it is followed by conclusion and recommendation, in which it determined, what appropriate steps should be taken for effective results.
Steve Jobs and Steven Wozniak are the two brains behind the incorporation of the Apple Incorporation in 1976, Woznaik has the passion for the development of the systems, while working for the Hewlett-Packard, Woznaik developed his first computer, which is later become the first Apple computer (Rawlinson, 2015). By the help of Jobs who realize the Woznaik dream to develop computer, he push Woznaik to develop and sell his first graphic computer. However, Apple incorporation in its initial year of incorporation faced numerous hurdle in convincing the market to purchase their newly developed graphic computer, unless it is introduced its plastic incased, colorful graphic computer named Apple II in Silicon Valley in the event of the trade show of computers. (Rawlinson, 2015). After a successful launch of Apple II in the computer trade show, it change the course of Apple Incorporation, and success reaches its door step, creating Apple Incorporation a pioneer in computer industry. Now days, Apple has diversified its product portfolio which range smart phones to music industry. Apple Incorporation worth around $600 billion, and having around 80 thousand of workforces around the world. (Rawlinson, 2015). Apple has achieved the success over the period due to its high innovatively in its products, friendly graphic user interface, good strategic planning, and the process of learning from its weakness.
1 Situation analysis of Apple Incorporation
1.1 SWOT Analysis
Having a large market share in the mobile industry in America, Apple incorporation runs with the total of 80 thousand employees around the world and have around 5 stores on average in every country. Through SWOT analysis, we are able to conduct analysis of the Apple Incorporation at an industry level. SWOT analysis is the tools which help the company in analyzing its strength, weakness, opportunities, and threats which are prevailing in the market (Hartline, 2005). It helps the company in determine the factors, which becomes obstacle in the success of the company, and how to overcome on that obstacle to achieve the desired goal. In this paper, SWOT analysis is applied on Apple Incorporation. (Makos, 2015)
Apple Incorporation is one of the biggest leading manufacturers of both smart phones and computers. It captures the vast majority of the market in mobile industry around the world. The strength of the Apple Incorporation is wide range of the products, strong brand image of Apple in the consumer market, and its sophisticated supply-chain infrastructure because of this, Apple enjoys the premium due to its brand image in the market, and many its customer is loyal to their product. This strength enables the Apple to capture the most of the market share, thus resulting as a barrier for the new entrants who are planning to come in the market.
The major weakness which can be identified while observing Apple Inc is its products and services which are much higher in prices as compared to its rival products, and, most of the Apple products and services, which includes its application, are incompatible with the services and products of other manufacturers. This weakness results in huge risk that Apple might lost its sale due to its high cost, as its competitor such as Samsung, LG, and Nokia manufactures the products which are lower in cost and their app are supported by other services.
The opportunities which are available for the Apple Incorporation in the market, such as Apple can inject investment in research and development to further improve its product brings more innovation in them, and Apple can reduce its prices, by reducing its profit margin, making its product economical. This opportunities will enable the Apple will be able to generate more profit and capture the market by diversifying its portfolio of product, by the customer needs.
There are numerous threats in the industry which are being faced by the Apple incorporation. The threats which are being faced by the Apple Incorporation can be, Apple Incorporation may lose its art of innovation, after the decease of Steve Jobs. Huge competition by the China and India in the development of cheap smart phones and Apple Incorporation has been found infringed over rights of intellectual property. These threats may result that Apple incorporation lost its vision of creativity, thus losing its mission and vision. Also the huge competition by the China or India will give Apple a tough time which leads it to reduce its cost to maintain stability in the market.
1.1 Porter’s Five Forces Model
Porter’s five forces model is another market analyzing tool, which is used for understanding the business power in the current situation. This is an important tool, because it enables the company in understanding and evaluating the current and its competitive position in the market, and its positional strength in which it is planning to move into. (Chapman, 2013)