Objectives

Some of the leading entrepreneurs in the word today are;

1. Bill Gate who in the founder of Microsoft Corporation,
2. Steve Job who is the co-founder of the Apple Corporation,
3. Mark Zuckerberg who founded Facebook,
4. Pieree Omidyar who is the founder of eBay Corporation,
5. And, Arianna Huffington who founded the Huffington Post.

All of the above entrepreneurs have faced stiff competition in their respective business environment. Competition comes from other companies that produce similar products or services, those that produce alternative products or services and new entrants in the market. This study will conduct an analysis of Steve Job’s Apple Corporation. The performance analyses under study include SWOT analysis, industry analysis (5 Force analysis), competitive analysis, consumer analysis, and financial analysis.

Apple Corporation was co-founded 41 years ago by Steve Apple and Steve Woz. However, the company might not have been successful as it is today were it not for Ronald Wayne who engineered the development of the iMac, iPad, and iPhone brands. Apple Corp. engages in designing, manufacturing, and marketing medical devices, music players, mobile communication devices, software and personal computers (Jurevicius, 2018). The Corporation operates in five global market segments namely America, Greater China, Europe, Asia Pacific, and Japan. The segments are further broken into smaller business units so as to break the products and services closer to the customers. For instance, the European segments represent the Europe countries, Africa and the Middle East. Other segments are segmented accordingly as well (Arrow, 2011).

The competitors of Apple are divided into two segments: Computer manufacturers and phone manufacturers. Competitors in the computer segment include Dell Technologies and Lenovo Group. Competitors in the phone segment include Note series and Samsung Corp (Porter, 2011).

SWOT analysis refers to analysing a company’s strengths, Weaknesses, Opportunities and Threats. Apple’s SWOT analysis is presented in the table below.

Strengths	Weaknesses
Ø Apple has strong innovative products. Ø Leadership position in terms of revenue generation. Apple is the second largest manufacturer of smart phones globally. Ø Apple enjoys a strong brand equity. The company’s brand is valued was valued $118.9 billion dollars in 2017. Ø Apple has a strong distribution channel of over 470 stores. Ø Steve Jobs is an inspiration to the success of company. Ø Apple’s products are consumer oriented.	Ø Apple applies exclusivity policy hence limited distribution network. Ø High price of products excludes customers from low income earners. Ø The company uses the premium pricing strategy which focus on quality and high prices. The strategy only focus on high income earners.
Opportunities	Threats
Ø The company can expand its distribution channels to attract more customers. Ø The demand for computer and phone products is increasing hence the company is likely to earn higher sales. Ø High innovation which increases the opportunity to develop new products and brands.	Ø The company faces aggressive competition from rival firms such as Lenovo, Dell, Microsoft and Samsung among others. Ø High level of imitation and counterfeit products in the market. Ø Rising cost of labour which provide a competitive edge to competitors in other countries.

The five force analysis examines the impact of macroeconomic forces in the industry on the performance of Apple Corp.

The company faces direct competition both in the phone and computer segments. Direct competition comes from companies such as Microsoft Corp., Samsung Electronics, Lenovo Group, Amazon, Inc., Dell, and Hewlett-Packard Company among other. The competition is high in the industry (Brown, Schiling, & Wuerffel, 2007).

Unless buyers enjoy a collective bargaining power, buyers have a weak bargaining power. A loss of one buyer has an insignificant impact on the performance of Apple. However, a collective defection of buyers will have a significant impact on the company (Maverick, 2018).

The threat of new entrants in the market is low because of two factors. One, the cost of establishing a new company in the market is high. And two, there is a high cost of developing a recognizable brand name in the market.

Instructions

Suppliers of Apple has a weak bargaining power. The company has a huge number of suppliers which makes it insignificant when one supplier switches to a competing company. Likewise, suppliers supply small quantities to the company. Therefore, leading suppliers seek to stick with Apple (Lin, 2012).

One of a substitute product for Apple products is landline telephone. A customer can forgo Apple’s iPhone for a landline telephone. Substitute products offer a weak threat because they have a limited capability to compete with Apple. For instance, many customers prefer phones with internet access. Such a preference cannot be found in landline telephones.

Apple operates in highly competitive computer and phone markets. The aggressive competition comes from companies such as Microsoft Corp., Samsung Electronics, Lenovo Group, Amazon, Inc., Dell, and Hewlett-Packard Company among other. Three major competition comes from Microsoft, Hewlett-Packard, and Dell. Microsoft controls 94% of the operating systems market. Operating System manufactured by Microsoft is compatible with almost all devices in the market. Hewlett-Packard is a top competitor in the personal computer market. The company controls a large segment in the market. Last, Dell is the third leading competitor in the market. Dell supplies computers for schools and businesses. In terms of sales, Dell comes after HP before Apple (Maverick, 2018).

The consumers of Apple are categorised into the following segments:

1. Media professionals,
2. Business Professionals,
3. Students and Young Adults,
4. Enthusiasts and Gamers,
5. Middle and Upper Income,
6. Technology enthusiasts.
7. Product related segment,
8. And, demographic segment.

Consumers seek products that have the required quality to meet their needs and preferences. Apple uses both offline and online platforms to influence the buying behavior of potential customers. Some of the technique used by the Company to attract more customers include product experience, word of mouth from loyal customers, its values and mission and controlled market share (Bhasin, 2018).

Compared to competitors, Apple Inc., reported a 19.63% total revenue increment in 2018. The company’s sale also grew by 19.41% in 2018 compared to the previous year. Lastly, Apple reported the highest net profit margin compared to its competitors. The net profit during the year was 22.46% (Magretta, 2012).

Comparative financial analysis with the industry in 2018

• Apple Inc. reported a net margin of 22.46% compared to 19.57% for the industry.
• Apple reported a return on assets of 15.99% compared to 12.38% for the industry.
• Apple reported a return on investment of 22.08% compared to 28.1% for the industry
• Apple reported a return on equity of 48.68% compared to 42.78% for the industry.
• Apple reported a quick ratio of 0.57 compared to 0.55 for the industry.
• Apple reported a Debt to Equity of 0.87 while the ratio for the industry was not reported.

The analysis shows that Apple Inc. enjoyed financial strength compared to the industry.

Based on the micro and macro analysis of Apple, the company focuses a lot on the developed market. It is time that Apple should focus its rapid and aggressive innovation to analyze developing market. Innovation should focus on reducing the impact of imitated products as a way of increasing sales and revenue generation. Second, Apple should automate its production process as well as entering sustainable contracting with its manufacturers to control the rising cost of labor in the market. Last, the company should develop new ways of engaging more distributors to increase its market share (Patel, 2018).

After successful implementation of the new product, Apple engages in performance evaluation. The evaluation of the sales performance of new products every two weeks from its implementation. Monitoring the performance process is part of evaluating the lifecycle of a product for the purpose of modification. Product modification is based on consumers’ feedback and views. In an instance where a product receives a problematic reception, it is recalled by the company for modification. The company then gives free products to the customer to test whether or not the initial problem has been resolved (Heracleous, 2013).

References

Arrow, K. J. (2011). General Competitive Analysis. Amsterdam: North Holland.

Bhasin, H. (2018, Feb 8). SWOT analysis of Apple Inc – Apple SWOT analysis. Retrieved from Marketing91: https://www.marketing91.com/swot-analysis-apple/

Brown, J., Schiling, C., & Wuerffel, D. (2007). The Competitive Edge: How to Win Every Time You Compete. New York: Tyndale House Publishers, Inc.

Heracleous, L. (2013). Quantum strategy at Apple Inc. . Organizational Dynamics, 42(2), 92-99.

Jurevicius, O. (2018, May 12). SWOT analysis of Apple (5 Key Strengths in 2018). Retrieved from SM Insight: https://www.strategicmanagementinsight.com/swot-analyses/apple-swot-analysis.html

Lin, S. P. (2012). How to start continuously improving innovation in organizational knowledge: A case study on Apple, Inc. Proceedings of PICMET.

Magretta, J. (2012). Understanding Michael Porter: The Essential Guide to Competition and Strategy. Chicago: Harvard Business Press.

Maverick, J. (2018, Jan 31). Analyzing Porter’s Five Forces on Apple. Retrieved from https://www.investopedia.com/articles/investing/111015/analyzing-porters-five-forces-apple.asp

Patel, N. (2018, Sep 19). 7 Key Strategies That You Must Learn from Apple’s Marketing. Retrieved from https://neilpatel.com/blog/7-key-strategies-that-you-must-learn-from-apples-marketing/

Porter, M. E. (2011). Competitive Advantage of Nations: Creating and Sustaining Superior Performance. New York: Simon and Schuster.