Apple case study, SWOT and pestel analysis.
This article provides you an insight to one such organizational framework in the form of a case study through SWOT and pestel analysis.
To help you better understand and relate to the process. We have chosen one of the biggest companies in the world, which you must already be familiar with.
Apple is a company which started from nothing but an idea along with sheer determination and will have its founding members and become the world's largest tech giant in a very short span.
The aim of this case study is to find out the various factors which have led to its unparalleled success, and what factors could influence their position. SWOT analysis is the basic and the most effective tool used for identifying various internal and external factors, such as strengths, weaknesses, opportunities and threats faced by an entity.
Apple is the leading innovator in consumer electronics among all the other brands in the market. By providing new technology to the consumers with strong and effective marketing. Apple has achieved high brand recognition in the market all over the world. In addition, Apple delivers unmatched quality in its products, as well as the support services it provides to its consumers. weakness, delivering quality and innovation has given rise to significant price difference between Apple devices and its competitors.
The compatibility of their operating system with other devices has made it difficult for people to switch to iOS based devices. Because it takes some time to get used to it.
The market share of Apple has been declining as well. One of the main reasons for which is there is a large dependency on the iPhones and iPad series opportunities. Due to its high market share and brand recognition, Apple is experiencing rising demands for their various products. People who use Apple electronics are still loyal to the brand by showing interest in the upcoming devices as well. The market for communication devices has shown major growth since 2013.
Thus, it allows Apple to explore new markets, which were previously untapped by the company, such as the Commonwealth countries. With the rise in data connectivity and speeds, more and more people are using cloud services for their task, giving rise to the demand for AI cloud based services threats. The field of consumer electronics is constantly evolving with new technological advancements every other day. This makes it a challenge for companies.
To keep up with the new trends. Apple was involved in a tax fraud scandal, which led to a very public trial and caused a huge damage to their reputation through viral content and social media. In another such incident, the company faced backlash for its IP rights policies, which led to a privacy threat outburst among its consumers. One of the major threats faced by the company is the large growth of its competitor's operating system, Android.
As per the SWOT analysis, it is evident that the strengths and opportunities give Apple a competitive advantage over its threats and weaknesses. This is primarily because of the company's status and loyalty among the consumers. Although it will be beneficial for the company to address the major weaknesses described earlier with the help of effective management strategies and mitigate the threats which it may face in the future
Let us now have a look at the next part of this case study analysis, which is the pestel analysis. A pesto analysis is an important analytical tool, which helps a company to evaluate the macro external factors which can influence an organization similar to SWOT pestel analysis is also an abbreviation which stands for political, economic, social, technological, legal, environmental, each of which rests To the nature of the respective influencing factors.
In contrast with SWOT analysis, it majorly focuses on the macro environmental external factors, which might affect the present or near future position and situation of the business.
Political Factors,
Foxconn is the supplier of apple in Taiwan, which is facing many cases of suicide from its employees due to high blood pressure. This can have negative effects on the reputation of Apple for being associated with such a company.
Low labor costs in China makes manufacturing cheaper for Apple. But the increasing nationalism and anti Americanism among the Chinese people and government makes Apple one trouble to move its manufacturing operation to US, which would increase the production cost.
Tim Cook, the current CEO of Apple made a public acceptance about his homosexuality, though it had only positive effect in the US, the CEO and the company. Both have faced tremendous backlash from the Russian lawmakers because of their strict and harsh homophobic propaganda. This can have a negative effect on the company and needs to be dealt with efficiently by economic factors.
Due to the global recession and the consistent high prices of their products, Apple experienced very slow economic growth. This was mainly due to the downfall of their sales figures. As the economic conditions of European people changed. Apple's revenues took a major hit, and declined to about 16%.
In the third quarter of 2012. labor costs in China were quite low. Thus, most of the manufacturing process of Apple was done in China. But due to the changes in the minimum wages, and rise in the wages in different parts of China, Apple might have to move their production to the US.
The value of Apple products changed tremendously in foreign markets in Asia and Europe, because of the rise in the exchange rates of the US dollar,
social factors.
Due to their high prices and unique premium features. Apple products have acquired a market status by appealing only to high and upper middle class sections of the society. As Apple is yet to expand in the countries of Africa, it is estimated that they will gather good market share in those countries provided the right marketing while entering any new market.
Apple has to make sure to form productive partnerships with the companies in those countries, so as to facilitate and gain the trust of new consumers. It is well known that Apple carries its manufacturing process in China due to the low labor cost. This decreases the appeal of the company among various individuals who wish that Apple should do its manufacturing in America to increase job opportunities for the American nationals.
Technical factors.
According to CNBC, Apple spent $4.2 billion on research and development in the third fiscal quarter of 2019. As per the latest trends, people have been using phones with bigger screens. This is a technical aspect, which puts Apple at a disadvantage, as the screen of Apple is smaller than most of its competitors.
Speaking of competitors, Apple faces a major threat from its competitors offering alternatives to the unique services, which were previously offered by Apple. For instance, soon after the launch of Apple Pay, which is a mobile payment and digital wallet service. Google soon came up with its own app called Google pay with the same efficiency.
Apple experiences a lesser number of consumer base every time they bring a new product to the market. This was the case when Apple TV was introduced, the sales of the product were very less. The security framework of Apple has failed a couple of times in the past, which has led to its consumers questioning the integrity of their phone and wondering if Apple devices can withstand the growing menace of cybercrime.
Legal factors,
Be it patent issues, importing parts, slowing down older versions of iPhones, or even false allegations. Apple has always found itself caught up in legal stress in the USA, not only mobile payments, Apple also opened up its doors by offering financial aid to people through Apple Pay. This makes up a wonderful amount of litigation as the financial sector is highly regulated.
Intellectual property law violations over the internet, in terms of piracy and counterfeit software have become quite common. A majority of Apple's revenue comes from its music and other software which fall prey to internet piracy and other issues.
Environmental Factors
Apple is taking heat from environmentalists due to a variety of issues, including the disposal of its own lithium batteries and electronic devices. In addition, Apple's production costs are likely to get affected due to the new environmental reforms in China, which would increase the electricity cost.
Apple also needs to monitor its carbon footprint and contribution to the greenhouse effect from the transoceanic shipping, which is an integral part of its supply chain.
The pestel analysis has helped in outlining the key influencing factors for Apple, it can be concluded from this that Apple will continue to prosper only for the next three years with its current strategies.
This is mainly because of the distinctive features and the exclusive nature of its products. However, there is still a need for Apple to adapt to the changing trends in the electronic communication industry to ensure rising revenue and to keep up with its major competitors.
In addition to keeping up with its environmental impact, and check.
This concludes the analysis of the internal external factors of the apple case study.