The Situation and SWOT Analysis of Apple Inc - Research Paper Example

Apple’s I-pad Executive Summary Organizations of all kinds face continually changing situations. Changes taking place may be minor or significant. With the help of strategic management managers critically evaluate existing factors in order to come up with the best possible work plan that will benefit them to deal with uncertainty currently prevailing in the business atmosphere (Robbins & Coulter, 2008, p.209). This research was carried out to do the situation and SWOT Analysis of Apple Inc. Company’s I-pad, an innovative production of one of the most successful companies of the IT industry. The approach of this research has been kept unbiased and elaborate, keeping in mind the study of past trends and the current scenarios of the industry in question and to see whether the company would benefit from such an association. Browsing through the trends and the performance of this product, its competitors and other influential companies, it was deduced that the Apple Inc. had come to enjoy a stable market share and influential growth in its financial and strategic possibilities. Table of Contents Executive Summary 1 1.0 Introduction 3 2.0 Situation Analysis: 5 2.1 External Situation Analysis: 5 2.1.1 Competitive situation: 5 2.1.2 Macro environment situation: 6 2.2 Internal Situation Analysis: 7 2.2.1 Customer Market Situation: 7 2.2.2 Market Mix-Situation 7 2.2.3 Supplier Situation 8 2.2.4 Resources and Capabilities: 8 3.0 SWOT (Strengths, Weaknesses, Opportunities, Threats) Analysis: 10 4.0 Conclusion and Recommendations 12 5.0 References 13 1.0 Introduction This paper indicates an analysis of Apple’s I-Pad; its history and its present position in the market. Especially invented to cater to customer’s diverse needs, I-Pad is in progress to gather wide recognition in the customer market. Meanwhile it also evaluates the problems that the company faces and the effect of some economic, social and political factors on its working and also the influence of its pressure groups and rivals. Every business organisation is made with the solitary aim to excel “In analyzing the external environments, both specific and general environments need to be considered to examine present market scene. From changing technology to changing demographics, to changing customer needs, managers have looked for strategies to accommodate current trends” (Robbins & Coulter, 2008, p.212). Apple Inc.’s challenge is to find a way to reverse the business market in its favour. By considering the current market scenario, the realities of external environment and by gathering information about the available resources or assets that Apple Inc. possesses, managers will become able to formulate strategies of the corporate, business and functional sector. Doing an external and internal analysis of the company helps to identify the strengths and weaknesses that Apple Inc. is currently facing. It will give employees the clear understanding of the company’s immediate goals so that they could manage any risk situation that may arise. Moreover it will also help in the negation of strong organisation culture by initiating situation analysis as successful organisations like Apple sometimes became the “prisoners of their own successes” by blindly following a single route irrespective of the competitors next moves( Robbins & Coulter, 2008, p.213). While assessing the overall progress, intangible assets like skills, knowledge, reputation and company’s unique databases are also taken into account. 2.0 Situation Analysis: Situational analysis comprise of competitors, customers, collaborators and socio-cultural climatic conditions. It is concerned with the current happenings in the business industry dealing with the macro environment, competitors, target customers and product distribution. 2.1 External Situation Analysis: “External environment is not only composed of markets (i.e. potential/ actual purchaser of the organisation’s goods or services) but also of communities of people (including governments) who have needs and priorities which are of a non market nature and who have power to force change on the organisation”(Cole, 1996, p.125). Formed after the advent of I-phones, some refer I-Pad as the missing link between hand-held devices and our laptops. Threatening the mere existence of laptops themselves, Apple Inc. has come to challenge most of its competitors by re-defining the very definition of technology. 2.1.1 Competitive situation: An analysis of the competitive situation shows that current competitors are not the only competitive forces operating in the external environment. “Suppliers and buyers also make an impact as do the actions of potential newcomers and the possibility of substitute products”(Cole, 1996, p.256). It is mandatory for Apple Inc. to be responsive to such triggers of change in the environment. In order to create competitive advantage and in case of shifting input costs or change in governmental regulations e.g. Trade tariffs, product standards etc., innovation is needed (Cole, 1996, p.257). I-pad has, at the moment no decent competitors that could bite away its share of market however most critics admit that this situation is likely not to last long. Giants such as Hp and Samsung are already working on their products that they claim would be strong enough to compete against the I-pad. Offering more features and some windows-enabled, such products can truly shy away some of I-pad’s customers who eventually get too tired of the apple applications and require a more ‘lap-top/ PC’ feeling to their handheld devices. The company, though considered to be an unpopular rival would have little problem to expand. Not only does its ever-increasing demand and revenue generate it with financial stability, it also helps in giving the company a consumer-loyalty beyond its reach. Markets where the company has still not launched its I-pad are already hungry for it, awaiting its arrival with great intensity. The company, with its stocks and equity can easily invest in such markets, as there are possibly no structural issues for it either and take advantage of all the demand. 2.1.2 Macro environment situation: Corporate planning is becoming more complex due to “the greater inter-connectedness of the world’s peoples in their trades, social and economic terms (e.g. European Union EU, General Agreement on Trade and Tariffs (GATT)”( Cole, 1996, p.124). The macro environment trends that could have an impact on the company’s progress include the demographics comprising of consumer preferences according to the age, gender and occupation of the market. Market geographies: the physical location of the client e.g. using internet as a marketing tool for advertising and promoting product. Innovation may result in a boom of the industry, yielding the company one step ahead of its competitors. 2.2 Internal Situation Analysis: 2.2.1 Customer Market Situation: It includes the target markets to which the company is intended to sale its products. Such markets target their selected audience on the basis of demographic and psychographic segmentation. It should be kept in mind that market situations can alter even over a short period of time therefore through properly formulated strategies organisations could speedily meet the changing market demands”(Cole, 1996, p.260). Following other such of its ‘colleagues’ such as the Newton Message Pad and the PenLite, I-pad was strategically released around the April of 2010, following the three-year base establishment and market ruling of i-phone. There to cater to those who are accustomed to watching movies, listening to songs and reading e-books, the I-pad gained its share of popularity following the expansion of the applications available for it on I-store. 2.2.2 Market Mix-Situation Marketing mix is a vital element of marketing strategy and is comprised of variables like “product, price, promotion and distribution” (Cole, 1996, p.259). Once the market situation i.e. customers, suppliers and competitors is analysed, the role of marketing mix becomes critical. Product offered to the target market must be branded, have variety and quality. Price of the product should be affordable for the consumer, discounts should also be offered. Proper promotion through advertising and distribution of the product to masses via channels and transports is important. I-pad offered by Apple Inc. is of high quality to meet the target market. Apple Inc. by releasing the I-pad, not only tried to make the laptops a lot more simpler and easy-to-use but also something that would give e-book readers such as Amazon-Kindle and Nook, a run for their money (Mirchandani, 2010). 2.2.3 Supplier Situation The popularity of the I-pad was as surprising to the company itself as was to all the critics. The product has sold million of its types, becoming a most sought after gadget of the current year. Highly popular, the sales overdid the expectations. Selling some 2 million units until today, its sales haven’t slowed down even today (Graham, 2010). According to customers, the stock of the product is exhausted almost everywhere and new units take at least 7 to 10 working days to deliver. What is the reason for this, one might wonder. Why is Apple Inc. unable to supply to the ever-increasing demand of its products? With more than 500,000 I-pads sold in just 7 days, the demand is refusing to cease. The reason that Apple Inc. gives for the shortage is the unavailability of the touch screens! The suppliers of the touch screens which include Lg, Samsung and Sieko argue that the touch screen production is much more than the touch screens of the I-phone. 2.2.4 Resources and Capabilities: The investors of the company are in complete disarray over how the company is handling the situation. As they see the demand of the product increasing, they see more dividend earnings for their stocks however the senior management complain that though it is optimistic, it is slightly impossible at the moment. The company, Apple Inc. however seems not to be worried about the approaching customers. Already earning a loyal customer-ship, the company has been upgrading its works so as to compete with the demands of different customers. It recently launched the OS4, a new and improved software that it plans to use for its to-be-launched I-phone 4g. This new software is light with new and easier navigation possibilities and easier user-interface. The company, seeing the approaching customers have already announced that the new OS would in fact be also usable in the I-pad, thus upgrading it. With the new OS the customers have a number of more options that are there to satisfy the whims of their demands and thus make I-pad look even more demanding and attractive. As its demand keeps on increasing the company has taken a drastic decision to reject demands of bulk products for businesses for it is unable to break the supply bottleneck. Also the company is taking the practice of researching and supplying exactly at the stores that demand a specific amount. The technological demand are already playing their part in creating the bottleneck of supply of the product, the company plans to overcome it soon enough. By altering its methods and making deals with media giants that promise to play their part in production, the company would soon rid itself of this technological problem. However, some argue that ‘Apple Inc.’, by restricting the supply is playing games to give birth to artificial demand. Though this is said with little or no proof, the angry customers believe that by creating the vacuum of its products that it has created; Apple can sell the I-pads at even a better bargain than it had before. Most market analysts admit that this bottleneck would eventually die out by April or even before. Seeing the approach of the company of its products which were too nearly as popular, one can say with complete confidence that the company is doing its best to overcome the huge deficit between the demand and supply of its I-pads. 3.0 SWOT (Strengths, Weaknesses, Opportunities, Threats) Analysis: The Product’s strengths seem to be a promulgation of light weight personal gadget having all features of smart phone and notebook combined. Equipped with a battery life of up to ten hours of usage, the I-pad takes advantage of Wi-fi and 3G technology to connect to the internet. Supporting two mono-speakers, the I-pad is said to survive a month’s time on standby. Becoming the new ‘trendy’ product, Apple’s I-pad has been successful to impress technological population as well as those who get appealed by its ‘personality’. With some models having the capacity to configure according to different networks on the plug-able sims, I-pad can also be used for such communication purposes. Wi-fi connection gives faster access to internet pages saving customer’s time and energy. To fit the consumer needs it is provided with a full sized keypad. Screen resolution is excellent as compared to its counterpart micro-technical devices. Also supporting GPS, the I-pad subsequently found its way into mountable areas on the dash board of the cars. Offering everything multimedia that a driver and the passengers’ wished to have, it soon revolutionised into a trend. The elaborate and crisp display, made its handling much more easier than using its predecessors I-pod and I-phones. Coming with translation-applications, one could travel with it and have the ease of communication (Sadun, 2010). It has done what once mobile phones did for us. Adding in everything from a camera, an MP3 player, internet browsing and a mobile service, the mobile phones relieved our pockets of the collective weight of all the above mentioned items. As for I-pad, it combines the powers of a mobile phone, DVD movie-viewer, Laptop (indeed upto an extent) and an e-book reader. The world of I-shop gives it possibilities and adaptations that cannot be counted. Also now, I-pad is able to read pdf files, common software that has its share of loyal customers. The company, through its online partners was able to attract more customers using market strategies that provided the customers with all sources of downloadable television material and media. To make entertainment much more innovative, the company offered a number of games that could be played on it and the same motion-sensor experience of the i-phone could be enjoyed at a more considerable level. Besides that, I-pad offers absolutely everything the internet has to offer. Finding its way into our homes, it has made browsing internet much more fun and relaxing (Connolla, 2010). Weaknesses include no USB; I-Phone port is the only option to transfer data. There is no multi tasking or background activity. Virtual keyboard is relatively small. Main threats faced by Apple Inc. due to I-pad include the decline of target customers largely because of the extensively high price. It may face competition with Mac products like the i-Phone. For continued success in business industry Apple Inc. must prioritize its strategic plan by identifying the current goals of the company. An external analysis of the market situation would be beneficial in getting to know the company’s opportunities and threats. An internal Analysis will identify the core competencies and weaknesses. When the above steps are achieved, strategies should be formulated that would later be implemented. In the end results will be evaluated to indicate the company’s progress in the business world. 4.0 Conclusion and Recommendations “After completing the SWOT Analysis, managers are ready to formulate appropriate strategies that exploit an organisation’s strengths and external opportunities, buffer or protect the organisation from external threats or correct critical weaknesses”( Robbins & Coulter, 2008, p.209). I-pad has revolutionised passing all expectations the product has become a favourite of many. With the fire already at its peak, the company needs to make sure that it is able to live up to the demands and the expectations associated with it. Dealing with all the threats to its market, the company still lives as the media giant, with a monopoly that no one can challenge. The situation analysis gave a very optimistic and crystal clear picture of the company and its progress as a financial body. With such a demand, the company has all power and authority to influence the market it exists in, gaining maximum producer surplus and attaining complete monopoly. Though competing companies tend to warn of competition, the warnings seam futile for the I-pad already has a considerable market share and with ever-increasing updates and innovations, the product is likely not to loose its charm soon. Though a favourite already, just as it was in the case of the I-phone, people tend to get bore of the applications. With rivals such as Hp Slate offering window as its OS, the alternative would be much more popular among the windows users. It is therefore advised that the company indulges and innovates so as to compete with this demand by coming up with a more elaborate and user-interfaced OS such as windows. Also, it needs to talk advantage of its demand and enter into markets that are yearning for it consumption. This would not only be a good financial endeavour but also a promising investment for the future of the company in general. 5.0 References Cole G. A (1996).Management Theory and Practice 5th Edition. Ashford Colour Press. Connolly, P. (2010). Apple's iPad is impressive, but it needs work. eWeek, 27(11), 24-27. Retrieved from Academic Search Premier database Jefferson, G. (n.d). On the road with my iPad. USA Today, Retrieved from Academic Search Premier database. Mirchandani, V. (2010) The New Polymath: Profiles in Compound-Technology Innovations. New Jersey: John Wiley & Sons Inc. Robbins Stephen P. & Coulter Mary (2008) Management 9th Edition. Pearson Education Sadun, E (2010) Taking Your Ipad to the Max. USA: Apress L. P Read More