Case Analysis: Apple, Inc.

Memorandum

Case Analysis: Apple, Inc.

Introduction

The purpose of this memo is to relay the findings of our group’s analysis of Apple, Inc. We performed a SWOT analysis of Apple and one of its main competitors and compared the results. We also analyzed the company’s product segments, viewed profitability and potential growth areas, and conducted a VRIO analysis on the iPhone segment to determine whether or not Apple has a competitive advantage. Next, we analyzed how Apple has transformed using dynamic capabilities and identified challenges that CEO Tim Cook will face in the company’s future. Our memo concludes by providing recommendations to Apple, Inc. on how they should overcome the challenges our team has identified.

Question 1: Conduct an internal and external environmental analysis for Apple using the SWOT
matrix.

A SWOT analysis was conducted for Apple, Inc., to determine the strengths, weaknesses, opportunities, and threats of the companies. Figure 1a lists factors in each of these categories for Apple, which is the first step in a SWOT analysis. Figure 1b shows a matrix that details how to use strengths to exploit opportunities and minimize threats, how to use opportunities to eliminate weaknesses, and how to minimize weaknesses to protect from threats. As you can see in figure 1a, Apple’s core strengths focus on its excellent financial position, innovative culture, and strong brand image and customer loyalty. Some of its weaknesses are few product lines, limited capabilities of products, and the cost of its products. Opportunities include entering new markets such as auto or wearables, and increasing compatibility of products. Major threats that could arise are lack of innovation due to the loss of Steve Jobs, increased competition in a tight market, and the large sum ($14.5 billion) of back taxes that the European Union ordered to pay to apple (Kanter and Scott).

One of Apple’s greatest strengths is its financial position. The company should use its large amounts of surplus cash as an opportunity to increase R&D in new industries to broaden their product lines. Another opportunity they could pursue would be the incorporation of newly acquired Beats electronics into Apple devices to give Apple a fresh competitive advantage. The last option is to increase advertising in current industries to capture a larger market share. This will also help to eliminate some of the threat of competition. Other threats to the company can easily be dismissed. We believe they should resolve the tax issue with the European Union as soon as possible. This will help them maintain their positive image, as well as allow for further sales without hassle in Europe. The last threat to Apple we identified is the lack of new products since Steve Jobs left the company. Apple should look within their highly talented employee pool to seek visionary leaders.  While we believe Apple is a very strong company, it still has its weaknesses. By pursuing some of their opportunities, they can eliminate the weakness of having too few product lines and also increase the compatibility of Apple devices. Another way they could diversify is by mergers and acquisitions or by entering emerging markets. Lastly, Apple needs to consider minimizing their weaknesses to avoid some of the threats identified. This can be done by creating more affordable and fresh products. We also believe a risky venture by the CEO Tim Cook, such as the Apple Car, could create some flare in the company, which has gone dull over the past few years. We firmly believe, Apple’s strengths and opportunities will be able to mitigate any threats and reduce weaknesses in the company if some of the suggested actions are taken.

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