QUESTION:- Please do internet research on “ Apple Green Card” program and do cri
ID: 468382 • Letter: Q
Question
QUESTION:- Please do internet research on “Apple Green Card” program and do critique of below SWOT analysis done below.
Hints to answer questions are:
-What would you have considered differently?
- Are there any flaws in the logic given below?
- Are there any biases in the below SWOT analysis?
Strengths:
Industry leader and innovator of quality, premium technologic products and services
Extremely strong cash position with $205 billion of cash equivalents and marketable securities
Strong brand identity and support services for products including Apple store and online help
Loyal customer base whom purchase multiple products that interact simultaneously
Research and Development create innovative platform to produce improved products (SCA)
Ownership of the operation system iOS which support all of the company’s devices and products
Globally viable with sales in all segments totaling $233 billion with (40%) in the Americas
Operating segments are managed geographically to better address local customer preferences
Average selling prices of phones help yield high gross margins (40%) as product mix was shifted
First mover advantage in the market
Weaknesses:
Narrow product line and price premiums could hinder sales as competitors keep reducing prices
New products are not always necessarily improved offerings and some products cannibalization
Security concerns from hackers on phones as phishing attacks have been perpetrated in 2015
iPad sales have declined (5%) due to cannibalization from other products offered by company
Dependence on the performance of distributors, carriers, outsourcing partners, and resellers
Reliance on third-party software developers for digital content and support future performance
Short battery life in several Apple products has hindered the sale of certain product lines such as iphone and Apple Watch
Opportunities:
Apple Music is a new subscription service that could generate additional revenue stream
Further development of Apple Watch and Apple Pay could lead to greater recurring revenues
Apple can look to venture into different industries that leverage from its current business model
Utilize research and development capabilities to develop new technological advancements
Threats:
Weak foreign currencies in other major markets outside of the United States
Company faces aggressive competition for products and services of the business globally
Frequent technological advancements in the industry can render innovations obsolete
Competitors selling products at low price points in order to gain or maintain market share
Subject to the risks of international operations as competitors imitation of product features
Price fluctuations and shortage of components parts due to limited number of suppliers
Substantial inventory and other asset risk in addition to purchase commitment cancellation risk
Performance
Best selling products were boosted by iPhone 6 and 6plus leading to total sales of $155 billion
Total net income in 2015 amounted to over $51 billion and company has retained earnings of $93 billion and $21 billion in cash and cash equivalent
Net sales rose by 28% over the 2015 fiscal year, spurred by the increased sales (52%) of iPhone
Explanation / Answer
In recent quarters, Apple iPhone sales declined drastically across global markets such as the US, China, and Europe. Apple iPhone sales in India recorded highest during this period since 2007. Apple CEO took an immediate decision to enter the Indian market in a big way and recently toured major cities in India to understand the potential for iPhones in Indian Market. Indian market size is huge and only 40% of the population having smartphones whereas 90% in China and Europe. During a recent visit to India, CEO took many strategic initiatives such as lowering the prices of current models for fastest growing markets such as Indian market, developing software locally through exclusive development center in Hyderabad and strengthen channel by adding more distribution network. Manufacturing iPhone locally is also planned to capture market share.
SWOT analysis of apple:
Strengths
From the beginning, Apple’s focus was on smartphone premium segments in Europe, North America, and China. But when economies are now stagnated, company’s growth also stagnated. Companies need to adopt a blend of different strategies to dynamic conditions is very important to survive highly competitive markets. Apple tries to change their strategy to suit global emerging markets such as India.
Apple used vertical integration in its favor to block the competitor so that company can enjoy the ownership of raw material/ supplies. Apple adopted this strategy to block the competitor to the get the supplies from the same supplier for Smartphone manufacturing in china. Through this, you can control the patents and intellectual rights over the key items.
Weakness:
Apple heavily concentrated in developed markets where the growth is saturated and almost 90% population is already having smartphones. Shifting focus to other emerging markets requires lot mindset change in the management. Product pipeline is not visible for developing countries such as African and Asian countries.
Opportunities:
Apple iPhone sales in India recorded highest during this period since 2007. Apple CEO took an immediate decision to enter the Indian market in a big way and recently toured major cities in India to understand the potential for iPhones in Indian Market. Indian market size is huge and only 40% of the population having smartphones. Even in USA and Europe, Apple planning to bring more services upgradations related to mobile apps at nominal prices.
Threats:
Many Asian companies such as Samsung, Mi and other Chinese and Indian Smartphone manufacturers are a major threat to Apple’s market. There are many other emerging companies consciously improving the products are the major threat to the company