Apple SWOT Analysis by Geeks with Examples — 2018 Edition
Apple SWOT analysis is a complete breakdown of strong and weak points of the company, both from market’s and internal points of views. It would hardly be an exaggeration to say that Apple is an iconic company. Everything about it is impressive financial results, technological innovations, customer loyalty, and human resources. Where does Apple’s success come from? SWOT (strengths, weaknesses, opportunities, threats) analysis of Apple is a compelling strategic analysis tool that answers this question. If you need to conduct Apple SWOT analysis for research, this article will provide all the info you need.
❓ What is SWOT Analysis?
SWOT analysis is a strategic planning technique that allows evaluating strategic perspectives of a business entity by evaluating internal and external decisive factors. SWOT analysis includes evaluation of internal environment factors and external environment factors:
- Strengths (internal strategic factors)
- Weaknesses (internal strategic factors)
- Opportunities (external strategic factors)
- Threats (external strategic factors)
This strategic analysis tool has been used for decades to determine the strategic position of various organizations and entities.
SWOT analysis tool is widely used worldwide in strategic planning due to the following benefits:
- Little to no cost – SWOT analysis focuses on major factors and doesn’t require special skills or training to conduct it, besides knowledge of business internal and external environments
- Can be done quickly – SWOT analysis doesn’t require time-consuming calculations
- It works – despite the simplicity, SWOT analysis helps evaluate whether strengths are sufficient to overcome weaknesses as well as take opportunities and minimize threats, which is critical for effective strategic planning.
While using the SWOT analysis tool, it is important to keep in mind some of its flaws:
- No solutions – results of SWOT analysis often imply many possible solutions, but this tool doesn’t help to pick the best ones
- Too much information – SWOT results can be overwhelming
- No priorities – strengths, weaknesses, opportunities, and threats typically aren’t prioritized by their impact, which can ultimately result in overlooking crucial aspects of the internal or external environment.
Despite these limitations, SWOT remains one of the most widely used tools in strategic planning. Updated 2018 Apple SWOT analysis results demonstrate that the company has several key strengths that source the company’s long-term success.
Before you start, I recommend checking our Research Paper Guide and Human Language Chi-Squared Test Explanation — they are two the most popular blog posts among marketing and MBA students. With their help, SWOT analysis below was constructed. 👇
Updated 2018 Apple SWOT Analysis
💪 Apple’s Strengths (internal strategic factors)
Apple’s long-term success was built on a range of key strengths, such as strong brand, innovations, customer focus, and customer retention.
- Strong brand. Apple is one of the world’s most valuable and recognizable brands. Brand value is what companies strive to gain because it means increasing demand and pricing power. Apple’s brand is associated with innovativeness, creativity, supreme quality, and signature design. Strong brand image increases customer loyalty and trust, which is essential for company’s growth and development.
- Innovation and technology. Apple charges higher than market average prices for its products not only due to its high brand image but technologies that are put into each product development. Apple products win the competition regarding ease of use, compatibility, and quality of software and hardware. Apple is one of the world’s most innovative companies.
- High customer retention rate. Apple has extremely high customer loyalty and retention rate. In fact, 92% of iPhone users who plan to get a new phone in the next 12 months are “likely or extremely likely” to get an iPhone, compared to much lower 77% for Samsung. This means that once customers buy Apple product, they are almost always certain to continue purchasing from the company in the future
- Loyal core clientele. Apple creates extreme brand loyalty and can always rely on the stable customer base of loyal buyers. Innovativeness and exclusivity generate the desire to support the company, and Apple truly knows customer needs and how to meet them.
- Exclusivity and design. Apple wisely exploits the fact that people judge by the cover. This is why the design of Apple products stands out among rivals: it is sleek, elegant, and recognizable. Apple products are associated with superiority in quality and design, while they are also often perceived as a symbol of prestige.
- Customer first. Apple is notorious for customer support, identifying customer needs, and meeting them. Moreover, Apple consistently exceeds the expectations of customers, which makes them feel valued and cared for.
👎 Apple’s Weaknesses (internal strategic factors)
Despite Apple being the market leader with outstanding strengths described above, it is important to note that the company also has several critical weaknesses.
- Pricing. Compared to rivals, Apple’s pricing is considerably higher. Despite the strengths as mentioned earlier and advantages, many customers can’t afford company’s products due to limited disposable income. As a result, Apple’s ability to increase sales and clientele is limited by the financial situation of potential customers.
- Heavy reliance on the brand image. Today technologies become outdated very quickly compared to even a decade ago. To stay relevant, Apple needs to keep up with its brand image and maintain a flawless reputation. For instance, recent Batterygate controversy demonstrated that customers wouldn’t let anything slide just because it’s Apple. As a result, Apple needs to constantly invest in its innovations and image instead of resting on its laurels.
- Incompatibility is an issue. Many Apple devices are incompatible with software from other developers. Apple’s iOS is also not compatible with any devices other than Apple devices, while Apple devices can’t work on any operating system other than iOS. In other words, Apple devices create their own ecosystem.
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🏆 Apple Opportunities (external strategic factors)
In order to maintain a strong position in the future, Apple needs to take several strategic opportunities.
- Develop groundbreaking products again. It has been a while since Apple wowed the world with its unique inventions and innovations. Surely, the company has sufficient strengths to grow in the long run, however, to maintain leading position Apple needs to come up with groundbreaking products instead of perfecting existing ones.
- Expand into new markets. Unlike rivals in the industry, Apple is slow when it comes to physical expansion worldwide. An absence of Apple stores makes customers feel neglected and not appreciated. Believe it or not, the first official Apple store in South Korea, an already huge and rapidly growing market, was opened only in the middle of January 2018.
- Focusing on services. Currently, Apple services, such as Apple Music subscriptions and Apple Store, represent a tremendous growth potential. To seize this opportunity, Apple needs to execute its strategy of customer focus once again and make services more user-friendly and efficient.
- Audio products. What would fit into the Apple gadget family better than audio products? Coming up with audio products would help Apple address the needs of a wider customer audience and increase sales.
😱 Apple Threats (external strategic factors)
Currently, Apple is facing strategic threats that can be addressed and potentially minimized in the future by wise exploitation of strengths and opportunities.
- The pressure of high expectations. Apple is expected to regularly come up with innovative products and be one step ahead of rivals. In other words, if Apple doesn’t live up to customer expectations, brand value can deteriorate over time, especially given heavy reliance of the company on the brand value.
- Competition in the industry. Apple might be currently among the most successful companies in the world. However, such competitors as Amazon, Google, Samsung, Microsoft, Dell, and Sony, are literally a few steps behind. Moreover, each of Apple’s rivals has important advantages. For Apple, competition is the key strategy shaping force.
- Profit margin reduction. The financial success of Apple is crucial to the funding of its future growth. Such factors as labor cost increase and raw material cost increase can potentially reduce profit margin and represent a threat to profitability.
- Reputation damage. If a company like Apple that heavily relies on brand value loses customer trust, clients will become less willing to pay for its products. Protection of brand value is a top priority for Apple because it is critical for customer loyalty, retention, and purchase intentions.
Recommendations for Your Own Apple SWOT Analysis
Conducting a SWOT analysis requires researching up-to-date information. It can seem challenging because, as it was noted above, SWOT analysis can literally include extremely long lists of factors. To make the process more effective, follow these awesome pro tips:
- Apple is a publicly traded company, meaning that its Annual Report will tell you more than you need for an excellent SWOT analysis. To find weaknesses and threats, go straight to “Risk Factors,” for strengths – to “Company Background” and “Company Strategy,” for opportunities – look through the whole “Business” section in the 10-K report.
- Google news about the company. Wondering about Apple’s growth opportunities? Search for news articles from reputable sources, such as Forbes, Business Insider, and US News. Limit your search results to the last 3 or 6 months, and you’ll find a lot of up-to-date information that is relevant for your Apple SWOT analysis, including Apple’s key strengths, weaknesses, opportunities, and threats.
- If a certain factor seems to be a double-edged sword and has both positive and negative outcomes (for instance, high prices of Apple products are both strength and weakness depending on how you look at it), include it in your SWOT analysis and explain the reasoning behind it. Don’t let it baffle you, factors in SWOT analysis have multiple consequences and sometimes need a closer look.
- Don’t try to come up with the same number of factors for each category. Or instance, in this article there are 6 Apple SWOT analysis strengths, three weaknesses, four opportunities, and four threats. Factors in each category have different weight and can’t be compared, so you need to evaluate the internal and external environment as a whole.
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That is it — I’ve collected everything needed to conduct a SWOT analysis of Apple in 2018. I will update this article as soon as anything new emerges. 👂 If something remains unclear for you, get connected to our geeks or drop into comments below — I’ll do my best to help you.