Strengths

1. Unique ability to design and develop proprietary hardware, software, applications

and services

Apple Inc.’s ability to design and develop its own hardware, software, applications and
services allows the company to introduce unique, innovative and easy-to-use products
and solutions for its customers.

Unique, innovative and easy-to-use products and services that integrate seamlessly into
one Apple ecosystem are the reasons why customers buy Apple’s premium products and
enjoy using them. In other words, it creates a competitive advantage no other company
can match.

Figure 1. Apple’s product ecosystem

Source: Strategic Management Insight

Apple’s ecosystem is the result of the company’s ability to design a wide variety of
integrated proprietary hardware, software, applications and services.

Many of Apple’s competitors have tried and still try to imitate the success of Apple’s
product ecosystem, but fail due to not having strong capabilities in designing,
manufacturing and developing both hardware and software, applications and services.

Samsung Electronics, Apple’s strongest competitor, lacks a comprehensive OS and has

very few apps and services to offer its customers. Google, Apple’s second largest
competitor is very strong on software, application software and services, but has only
developed a few unsuccessful hardware products.

Except for Google and Samsung Electronics, no other company could seriously attempt to
challenge Apple’s competitive advantage.

2. Powerful brand supported by strong advertising and marketing capabilities

Apple is the world’s most valuable and recognizable brand. According to Interbrand [2] and
Forbes [3], the Apple brand is worth US$184.154 billion and US$170 billion, respectively.
Brand value is closely related to its recognition, meaning that Apple is also one of the
world’s most recognizable brands. Their brand recognition is supported by its vast product
ecosystem.

Moreover, Apple has a reputation of developing highly innovative, well designed, and well-
functioning products, as well as for delivering a great customer experience and sound
financial performance.
The company has been able to achieve such strong brand recognition and reputation
through its strong advertising and marketing capabilities.

Apple’s excellence in creating spectacular marketing campaigns, its superior advertising

capabilities, premium quality products and ability to deliver an excellent customer
experience has allowed the company to build the most powerful brand in the world.

Weakness
Over-reliance on iPhone sales as a major revenue source

Iphone generated 55.8% of the company’s total revenue in 2014.

This number grew to 61.6% in 2017.

Opportunities

Augmented and virtual reality markets will be worth $100 billion by 2023

AR and VR will become very profitable growth markets and Apple should take advatange
of this opportunity

Threats

Smartphones and tablets are becoming a commodity, which could impact the company’s
gross margins
 Apple’s Strengths (Internal Strategic Factors)
This aspect of the SWOT analysis framework identifies the strengths
that enable the company to overcome weaknesses, take advantage of
opportunities, and withstand threats in its business environment. These
strengths are internal factors specific to the conditions within the
business organization. In this case, the following are the most notable
strengths of Apple Inc.:

1. Strong brand image

2. High profit margins
3. Effective rapid innovation processes

Apple is one of the most valuable and strongest brands in the world. In the
context of this SWOT analysis, the company is capable of introducing profitable
new products by virtue of its strong brand image. In addition, Apple’s
marketing mix or 4P involves the premium pricing strategy, which comes with
high profit margins. This internal strategic factor is a major strength because it
maximizes profits, even when sales volumes are limited. Moreover, the generic
competitive strategy and intensive growth strategies of Apple Inc. involve
effective rapid innovation, which enables the business to keep abreast with the
latest technologies to ensure competitive advantages. Based on this aspect of
the SWOT analysis of Apple Inc., the company’s strengths are difficult to
compete with, thereby supporting continued leadership in the global industry
environment.

Apple Inc.’s Weaknesses (Internal Strategic

Factors)
In this aspect of the SWOT analysis, the emphasis is on the weaknesses
or inadequacies of the company. Weaknesses are internal factors that
are obstacles to business growth. The following business weaknesses
are the most notable in the case of Apple:

1. Limited distribution network

2. High selling prices
3. Dependence of sales on high-end market segments
 Apple Inc. has a limited distribution network because of the company’s
policy of exclusivity. For example, the company carefully selects the
authorized sellers of its products. The SWOT analysis framework
considers this exclusivity strategy as a factor that limits market reach.
This weakness exists despite exclusivity’s advantages, such as Apple’s
strong control on the distribution of products. In addition, because of its
premium pricing strategy, the company has the weakness of the
dependence of sales on high-end market segments. High prices attract
customers from the middle- and high-income brackets, while preventing
customers from low-income brackets to easily purchase the company’s
products. This internal strategic factor is a considerable weakness
because high-end market segments represent only a minority of the
global market. Based on the internal factors in this aspect of the SWOT
analysis, Apple Inc.’s pricing and distribution strategies impose
limitations or weaknesses in the business.

Opportunities for Apple Inc. (External Strategic

Factors)
This aspect of the SWOT analysis of Apple Inc. pinpoints the most
significant opportunities that are available to the business.
Opportunities are external factors based on the industry environment.
These factors influence the strategic direction of business
organizations. In Apple’s case, the following are the most significant
opportunities:

1. Expansion of the distribution network

2. Higher sales volumes based on rising demand
3. Development of new product lines

Apple Inc. has the opportunity to expand its distribution network. Such
opportunity directly relates to the weakness of the company’s limited
distribution network. This SWOT analysis emphasizes the need for the
company to change its distribution strategy. An expanded distribution
network can help Apple reach more customers in the global market. In
relation, the company has the opportunity to increase its sales volumes
through aggressive marketing, especially for mobile products. This
opportunity is linked to the rising demand for mobile access, as
illustrated in the PESTEL/PESTLE analysis of Apple Inc. Furthermore,
the company has the opportunity to explore new product lines. Its
current product lines are highly successful. However, with further
innovation, the company can develop and introduce new products, like
what it has already achieved with the Apple Watch. Developing new
 product lines can support business growth in the international market.
Thus, this aspect of the SWOT analysis of Apple indicates that the
business has major opportunities for further growth despite aggressive
competition.

Threats Facing Apple Inc. (External Strategic

Factors)
In this aspect of the SWOT analysis, the focus is on the threats that the
company experiences from various sources, such as competitors.
Threats are external factors that limit or reduce the financial
performance of businesses. In Apple’s case, the following threats are the
most significant:

1. Aggressive competition
2. Imitation
3. Rising labor cost in various countries

Tough competition in the industry is partly because of the

aggressiveness of firms. Apple competes with firms like Samsung, which
also uses rapid innovation. In the context of this SWOT analysis,
aggressive competition has a limiting effect on Apple Inc. Because of
the aggressive behaviors of competing firms, it is necessary to have
strong fundamentals for maintaining competitive advantages. In
addition, the company faces the threat of imitation. This threat is
significant because of the large number of local and multinational firms
that imitate the design and features of Apple’s products. Moreover,
rising labor costs involving contract manufacturers, such as those in
China, reduce profit margins or push selling prices even higher. Based on
the external strategic factors in this SWOT analysis, Apple Inc.’s
performance could suffer because of aggressive competition and
imitation of product design.

SWOT Analysis of Apple Inc. –

Recommendations
The internal and external factors discussed in this SWOT analysis
indicate that Apple Inc. possesses major strengths to effectively
address organizational weaknesses. The company can also use these
strengths to exploit opportunities, such as the expansion of its
distribution network. Moreover, the company can use its strong brand
image and rapid innovation processes to successfully develop and
launch new product lines. However, Apple faces the significant threats
of aggressive competition and imitation, which are major challenges
affecting players in the global market for consumer electronics,
computer hardware and software, and online digital content distribution
services.

Based on the strategic issues highlighted in this SWOT analysis of Apple

Inc., a recommendation is to continue the aggressive and rapid
innovation involved in developing the company’s products. Such
innovation reduces the adverse effects of imitation on revenues. Also, it
is recommended that the company further enhance the automation of its
production processes, and support the automation of its contract
manufacturers, as a way of addressing the rising labor costs involving
Apple product manufacturers. Another recommendation is to establish
partnerships with more distributors to improve the overall market reach
of the company’s distribution network.

http://panmore.com/apple-inc-swot-analysis-recommendations
 What Are Apple’s Biggest Strength?

The Apple SWOT analysis highlights that one of its biggest strength is no doubt the ability

to overcome all other weaknesses.

But that apart another factor that helps Apple is no doubt the internal business

environment.

As the old saying goes, a strong foundation always makes a strong building; the internal

strength often gives the company the ability to get back even after a serious fall.

It is a huge indicator of the kind of power it derives from its organizational structure.

One of the most valuable companies in the entire world, Apple’s best organizational

features include:

1. A sustainable and credible brand image

2. Strong profitability

3. Constructive innovation that aids profitability

4. A keen sense of customer needs.

When you probe the SWOT analysis highlights, Apple’s biggest driver has been the ability

to introduce innovation rather successfully.

One reason that helps in introducing products profitably is also the fact that the brand is

extremely strong and lends a huge amount of credibility and as a result easily wins

customer trust.

Additionally, by maintaining a rather premium pricing, profitability is one aspect that Apple

does not compromise on.

 This is a strong factor that allows them to remain flexible in terms of keeping profitability

intact.

The strong and the fast paced innovation strategy that emerges from its sustainable

internal growth avenues helps it stay ahead of the competition.

This no doubt gives the firm a major advantage as compared to its peers and helps it

maintain its leadership position.

The premium pricing also enables it to remain strongly invested in its innovation process

without unduly stretching its resources and maintaining steady cash flow unabated.

This allows the company the necessary bandwidth to create a steady performance track

record.

Weaknesses as per Apple SWOT Analysis

Therefore as per the Apple SWOT Analysis, what’s that weakness which could potentially

disturb this growth track.

Essentially these are inadequacies that could possibly dent its leadership position in the

market and also could hinder overall growth.

Well, if you look at the current dynamics of the global mobile movement you would feel

 The relatively high prices

 The rather limited distribution network globally

 High-end targeting

are some of Apple’s major mission and concerns.

While the company’ policy of limited distribution is guided by its will to maintain

exclusivity, it also severely cuts down its reach.

 You may want to argue what about the online stores that can provide access to buyers; the

question remains, what is the percentage of internet penetration globally?

Can it possibly compete with the kind of distribution network that the likes of Samsung

have in place?

Apple SWOT analysis also indicates that the company is overly dependent on its high-end

products for raking in the bulk of the sales revenue.

The main customer base belongs to the upper and the upper-middle classes.

Meanwhile, the lower middle-class customers who form the bulk of global consumers

buying mobiles avoid it or are unable to buy it because of the huge prices involved.

Therefore, you can easily say that the distribution and the selling strategy is a major

hindrance to future growth.

Opportunities for Apple

The Apple SWOT analysis, however, highlights some key growth opportunities

nevertheless.

Given the external business environment and the broad global demand, it can be easily

said that some of the best opportunities at the moment includes

 Rising demand for smartphones and tablets

 Creating new products catering to customers

 Expanding current distribution network for the company.

Not only can these factors propel growth significantly going forward, but they could also

help drum up the current sales numbers.

In fact, the 2016 profit numbers indicate some initial sagging signs and the ability to

incorporate these growth opportunities can quickly help it stage a major turnaround in

quick succession.

In fact, given its innovation strength, it should look at creating fresh products that can also

target a larger customer base and perhaps even look at the lower end of the pricing range.

Therefore, it can be easily said that the Apple SWOT analysis highlights rather sustainable

opportunities for future growth despite some distribution and pricing weakness.

Threat for Apple

Despite the opportunities, the Apple SWOT analysis does highlight some concern areas.

Aggressive competition from mobile makers and the possibility of churning out Apple

fakes is no doubt some of the biggest cause of worries.

It even roadblocks that could seriously hurt growth and profitability.

Rising cost of labor in markets outside the US is also another aspect that could seriously

dent the profit numbers.

Therefore, it is very important that the company takes aggressive steps to limit imitation of

its design.

It also work out a sustainable innovation strategy that can reduce the threat from

competition.
 So the recommendations as per the Apple SWOT analysis would be

 The company can in no way slacken on the innovation front.

 It should be more aggressive in charting out strategy to stay ahead of competition.

 It needs to reach more markets as well as a larger number of consumers in each market to

eke out long-term profitability.

The company must also look at a suitable strategy to limit the threat of imitation.

It must create a stronger patent portfolio to discourage those trying to make fake options.

But all said and done, the pace of innovation cannot slow down any cost.

It should perhaps start looking at more wide reaching creations.

https://www.luckscout.com/apple-swot-analysis/
https://www.cheshnotes.com/2018/07/apple-swot-analysis-2018/

https://www.marketing91.com/swot-analysis-apple/