Strategic management aims at identifying best growth opportunities and creates defenses against threats to its competitive position and future performance. An analysis of the internal and external environment of an organization is very important for strategic management. The internal environment factors of the firm include its Strength(S) and Weakness (W) and the external factors include the Threat (T) and Opportunities (O). The analysis of both the internal and the external factors of the firm are called SWOT analysis. It provides all the required information that is useful to the firm to so that the firm could match up its resources according to the competitive environment in which it acts. SWOT analysis is very important to formulate strategy and its selection.
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The SWOT analysis framework is given below to get an idea of how the SWOT analysis fits into an environment scan.
Apple Computer, Inc.is an US based company dealing with the design, development and marketing of personal computers (PC) and related software, peripherals, network solutions, portable digital music players, and related accessories. The company also offers other services like iPods, iPhones, and servers. It is head quartered in Cupertino, California and employs 21,600 employees. The company recorded revenues of $24,006 million during the fiscal year ended September 2007, an increase of 24.3% over 2006. The company’s revenue grew on account of increased sale of Mac systems and downloads of digital content.
The operating profit of the company was $4,409 million during fiscal year 2007, an increase of 79.7% over 2006. The net profit was $3,496 million in fiscal year 2007, an increase of 75.8% over 2006. (Apple computer, inc. – SWOT analysis, 2008).
A SWOT analysis of Apple computers shows that the main strength of Apple is its innovative market research, which has resulted in the introduction of ipod and iphones. The strength of the firm can be used as a basis for its further development and also for developing a competitive advantage over the other firms. Its patents, its strong brand name, good reputation among its customers, good access to high grade natural resources and also favorable atmosphere to the entire distribution network can be considered as the strengths. (Robert, Peter, & Brian, 2007).
Apple is also having a powerful brand loyalty which has retained and attracted customers. If the firm is lacking certain strengths, it can be considered as its weakness. Identifying the weakness will help the firm to over come it and make it strength in the future. lack of adequate patent protection, a weak brand name, poor reputation among its existing customers, high costs, inefficient access to good resources and key distribution channels The main weakness of the Apple was that it produced one batch iphones with faulty screen and batteries, but the company made efforts to replace it immediately.
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Many of the Apples competitors make itunes, which are easily downloadable music files because of that Apple is under a pressure to increase the price of its music download file, from the music industry itself. This may be viewed as a commercial weakness then there was a swap from IBM to Intel, which has brought confusion among its customers. Apple has the opportunity to build up its own iTunes and podcastes. It can also enter into the software market and sell its hardware to them. The opportunities identified will help the firm in improving its profit and growth. The opportunities of a firm may be its unfulfilled needs of its customer, new technologies available, opening up of the economy by removal of international trade barriers. By identifying the threats, the firm can be alert before taking any further improvements to the firm’s policy.
The threats mainly include the pressure from its competitors, emergence of new and substitute products, new regulations and the trade barriers existing in the present economy. The biggest threat to Apple is high competition in the technology markets. The demand of the iphones and ipods will be affected if the market research becomes faulty. High product substitution effect is another threat to the fast moving IT consumables market. Apple is vulnerable to leaks that could cost them profits.
SWOT analysis apple, 2008
Company ‘X’, which is also dealing with the design, development and marketing of personal computers digital portable music players, and related accessories is a competitor of Apple. We are about to introduce new services like iphones and ipods. The Biggest threat to our company is very high level of competition in the technology market. The important point that can be gained from the SWOT analysis of Apple computers is that by conducting effective market survey we can successfully innovate new ideas which help in the introduction and development of innovative products.
So our firm should heavily work on the research and development and also marketing in order to gain a competitive position in the market. Experts should be appointed to conduct the market research and find out the potential market. Use of low costs and advanced technology will bring growth in the market. The products should be expanded to all customer segments; and in all product categories across the world so that it becomes a popular brand world wide. Tomorrow’s technology might be completely different so we should find the opportunity beforehand and act so that out market could be widened.
SWOT analysis will help a firm in designing a better strategy. Each firm should identify its own core competencies. Core competency will help the company to build a competitive advantage over the other companies in the market. The competitive strength will inurn improve a company’s long term market position. (Hwin, 1995).
Robert W, B., Peter J, D., & Brian, T. SWOT Analysis: Strategic management. Quick MBA. 2007. Web.
Apple computer, inc. – SWOT analysis. Market Research. 2008. Web.
SWOT analysis apple. 2008. Web.
Hwin, R.D. What is strategic cost analysis? 1995. Web.