Apple Incorporated has proven itself time and time again as the leading company in innovation and technology advancement. From the iPhone to the iPad, Apple has not only paved the way for new and exciting mobile communication mediums but also for successful business strategies. The $108. 25 billion dollar company (Reuters, 2012) has created a loyal consumer base by providing integrating products that persevere, update, and keep the owner connected to the world around them.
The upcoming iPhone 5 already has Apple’s consumers saving up for the estimated $199 minimum cost (Grant, 2012), which gives Apple investors a figure to calculate possible growth potential once the phone is released and therefore making the company more appealing to those investors. A mutual fund manager has many aspects to consider when choosing a company to invest in. The best way to help break those traits down is to conduct a SWOT analysis on the chosen potential company.
A SWOT analysis is a method used to evaluate a business’s Strengths it currently possesses in the business market, Weaknesses it has in the business market, Opportunities it has available to take advantage of in order to grow, and Threats it has surrounding the business that may hinder its growth or value. Below is a SWOT analysis of Apple Incorporated that was conducted by Jason Cantrell on September 7th, 2012. Strengths: 1. Innovative Software that is very user friendly. a.
Apple’s iOS has set the standard for mobile phone operating systems that competitors such as Google Inc Android strive to topple on a daily basis. b. iTunes has become the standard for downloading and buying digital music once again having another competitive advantage in not only the computer world but also the music business world. c. Apple’s main operating system software, OSX, for its computer hardware line has also made competitors like Microsoft Windows revamp its current editions to be as seamless and user-friendly as Apple. 2. Apple has the mobile phone market dominated with the iPhone.
a. The iPhone sleek and ergonomic design makes it a plus for consumers. b. iPhone’s compatibility features with multiple hardware and software features make it more versatile in the market place. c. iPhone popularity makes it a must for mobile phone consumers. 3. Apple dominates the mobile entertainment market with the iPad. a. The ever-updating mobile tablet series, the iPad, gives apple high potential growth in digital entertainment sales from books to movies. b. The speed and ease of use makes the iPad an easy choice over competitors like Amazon.
com’s Kindle Fire. c. The ability to be used as an all-in-one mobile computer system for a fraction of the cost of Apple laptop computers let the consumers have a cheaper Apple computer option. d. The iPad sleek and ergonomic design makes it a plus for consumers. Weaknesses: 1. Initial costs of Apple products are high compared to competitors. a. Amazon. com’s Kindle Fire Tablet starts out at $199 (“Kindle fire hd,” 2012) where as the iPad 2 starts out at $399 (“Apple store,” 2011). a. Competitor Dell computers have laptops that start out around $499 (“dell.
com,” 2012) where as Apple laptops start out at $999 (“Apple store,” 2011). 2. Apple’s per share stock market cost is $662. 74 (“Yahoo! finance,” 2012) compared to competitor Microsoft cost of $30. 72. (“Microsoft corporation (msft),” 2012) Opportunities: 1. Expand market to entertainment industries. a. Apple could host a variety of music festivals to further market its products. b. Found and/or build sports/entertainment arenas such as the Staples Center or Verizon Amphitheatre, which could yield high profits from live entertainment events. 2. Reduce cost of high demand products. a.
Apple could reduce the cost of iPad or iBook to match competitors such as Dell laptops to increase consumer base and therefore drive sales. b. Manufacture an economy line of products that are closer to competitors price range to increase consumer base and drive sales. Threats: 1. Potential growth ceiling. a. Apple’s high annual earnings rate of 65% (Reuters, 2012) make it hard to out do the previous years profit margin. b. With goals being set on year prior sales, more money is needed to increase marketing campaign and product line in order to top previous years earnings and display overall growth.
2. Competitor technology advancement. a. As technology gets cheaper and easier to develop it makes it easier for competitors to introduce cutting edge technology and therefore potentially converting Apple consumers to competitor consumers. b. Costs to continue to have much needed cutting edge software will increase dramatically. As much as it is important to identify a company’s strengths, weaknesses, opportunities and threats, it is also important to be able to identify its internal and external stakeholders. Apple’s internal stakeholders are its employees, managers, and financial advisors.
Apple’s external stakeholders are customers, investors, and business partners. The internal stakeholder’s want to be able to generate as much profit as possible, guaranteed career growth within the company, and a variety of personal benefits. The internal stakeholder’s needs are guaranteed competitive salaries and job security. External stakeholders, such as stockholders and customers, want as much bang for their buck when it comes to purchasing Apple’s products and services along with tremendous return on their investment.
The needs of the external stakeholders are simple, guaranteed satisfaction on product purchase and guaranteed return on initial investment. Although the wants and needs of a company’s internal and external stakeholders are similar, they differentiate in what is absolutely necessary to keep them invested and engaged in the company. Apple has yet to fail both its internal and external stakeholders wants and needs. The company has proven time and time again that no matter what its competitors develop Apple will develop something similar but easier to use, more stable, and overall better in quality.
Apple consistently fulfills the needs of its internal stakeholders by continuing to grow in sales year after year and in doing so provide stability in their careers. The company also fulfills the needs of its external stakeholders by creating innovative business strategizes, solutions, products, and overall profit margins. After viewing the SWOT analysis conducted by Jason Cantrell on September 7th, 2012, it is much easier for a mutual fund manager to see that Apple is not only a very smart company to invest in but also a very stable one.
Apple continues to provide groundbreaking products that keep its stakeholders excited and willing to continue supporting the company. Investing in Apple incorporated is something that may have high initial cost but, as statistics show, it also has high return of investment. Works Cited Apple store. (2011, February 05). Retrieved from http://store. apple. com/us dell. com. (n. d. ). Retrieved from http://www. dell. com/us/soho/p/laptops. aspx? ref=us-soho-lt Grant, K. (2012, September 10). How to pick right apple iphone 5 plan. Retrieved from http://www.
marketwatch. com/story/how-to-pick-the-right-iphone-5-plan-2012-09-10 Kindle fire hd. (2012). Retrieved from http://www. amazon. com/dp/B0083Q04IQ/? tag=googhydr-20&hvadid=2524860 Microsoft corporation (msft). (2012, May 17). Retrieved from http://finance. yahoo. com/q? s=MSFT&ql=0 Reuters. (2012, January 23). Apple in 2012. Retrieved from http://timesofindia. indiatimes. com/tech/news/hardware/Apple-in-2012-A-SWOT-analysis/articleshow/11599618. cms Yahoo! finance. (2012, 01 24). Retrieved from http://finance. yahoo. com/q? s=aapl&ql=1