Business Analysis
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Buisness Analysis Part I: Apple Inc.
This paper will discuss and analyze the investment opportunities of a top fortune 500 company by conducting a SWOT analysis as well as identify the internal and external stakeholders of the company. A SWOT Analysis is a strategic planning tool used to identify and evaluate the Strengths, Weaknesses, Opportunities and Threats facing a company. It involves identifying the core factors that are favorable and unfavorable that will aide in financial and investment decisions. The stakeholders are those individuals and or organizations who have a direct or indirect interest in the company and are affected by the companys business activities. The findings of this SWOT analysis will provide information on the strengths and weaknesses in relation to the opportunities and threats of the company that will help determine if the investment would be beneficial.
Apple Inc.
The company that I chose to conduct the business analysis is Apple Inc. Apple is one of Americas top leading and innovative technology companies. The California-based company has been around for decades beginning its evolution in the 1970s with the Apple II and reinvented the personal computer in the 1980s with the Macintosh. In the 1990s Apple took their product to a higher level making the decision not to license its technology, something that hadnt been done by any of the competitors. This gave Apple a huge competitive edge amongst technology giants such as Microsoft, who with its Windows operating system had quickly dominated the market providing consumers with computers features that we now take for granted such laser and color printers. In the last 10 years alone, Apple has issued more than 1000 patents and now Apple makes bolder moves by introducing products that appeal to consumers of all ages. For the first time in his history Apple moves away from its core business of computer into the music business and kicks off a revolution again. Apple introduced the iPod, which has become the most selling portable music player in the world and the iTunes Music Store a revolutionary online service to buy digital music. In addition to the Ipod, Apple was the first to launch the concept of the popular tablet known as the Ipad and is currently amongst the leading competitors in the smart phone market with their popular Iphone
SWOT Analysis:
Strengths
Apple Computer Inc. is one of the oldest hardware manufacturers that control manufacturing both computers and their operation system. It is known that Apple has a high quality product which makes Apple the leading brand amongst their competitors.
Aggressive campaigns and commercials are advertised through media with interesting and intriguing visuals which keeps the brand and products relevant to the consumer.
Apples stock price is the highest in the personal computer industry. Apple is financed mostly by its equity therefore Apple does not have any debt, so investors would bear less risk by holding Apples stocks.
There are a huge number of consumers who are loyal to Apple even though the prices of Apple products are higher comparing to its competitors. This means that products will continuously sell.
Apple is diverse in meeting the needs of the consumers. They offer a variety of products that are relevant to the ever changing technology trends which keeps them ahead of the competitors.
Weaknesses
There is pressure on Apple to increase the price of its music download file. This pressure comes directly from the music industry itself as it recognizes that more money is generated from iTunes than from their original CD sales, but if it gives in to the music producers, it may be perceived as a commercial weakness.
Frequent product recalls. One of the most noted recalls is the Ipad Nano and the Iphone. This frequent recall procedure can weaken the companys reputation among consumers
Apple market share still falls far behind Microsoft.
Apple will not allow consumers to download third party apps. Apples operating systems do not support all applications, which drive consumers to go for other products.
Opportunities
The recent growth in the smart phones market segment has created an opportunity for Apple to increase its market share. Statistics show that the demand for worldwide touch-screen devices has doubled in. This success in the smart phone market segment can be credited towards the widely successful iPhone. Initially launched in 2007, Apple has become the third largest player in the smart phone segment.
Provide better warranty support. Apples warranty purchase plan is not the most desirable and you only get 90 days standard service compared to everyone else at 1yr. Additionally, Apple does not provide insurance coverage on its products which also does not appeal to the consumer due to the high costs of the products.
Success of Apple iPhone has created a steeping stone for Apple to attract and gain new customers who had not previously owned an Apple computer.
Threats
The biggest threat to companies such as Apple is the very high level of competition in the technology markets. Many competitors such as Samsung, Sony and Toshiba have developed products similar to the innovative Apple products. Apple works very hard on research, development and marketing to retain its competitive position.
The popularity of iPod and Apple Mac are subject to demand and will be affected if economies begin to weaken and demand falls for their products. Economic declines often reduce the demand for higher priced consumer items as many people view these items as luxuries. Since Apple products are considered to be top of the line amongst consumers, they are most likely to switch to other manufactures in the face of falling incomes.
There is also a high product substitution effect in the innovative and fast moving technology market. Ipods and MP3 players are the leading music players today but tomorrows technology might be completely different. Wireless technologies could replace the need for a physical music player.
SWOT Analysis Findings.
After conducting the SWOT it can be determined that investing in Apple Inc would be a wise decision. The analysis provided insight on the companys performance, present and future, identifying key areas that highlight the success of the company. The strengths and opportunities of the company far