Contingency Plan and Executive Presentation

Selected Organization: Apple Inc

Complete a SWOT analysis from a global perspective, if applicable.

Analysis

Summarize your findings from the SWOT analysis for the CEO of the organization you chose. Address the following in your 2- to 3-page summary:

Apple Inc was established in 1977 and is one of the most valuable companies in terms of market capitalization and brand value in the world (Fortune, 2019). The company has revolutionized the smartphone and tablet market and is one of the most iconic brands in the world.

Apple is most known for the iPhone, which accounts for 54.7% of the company’s total revenue (Apple, Inc Form 10-K For The Fiscal Year Ended September 28, 2019, 2019).

In addition to consumer electronics, Apple offers many services to its customers like Subscription based services (Apple Music, Apple TV), digital content like iTunes, and other services like iCloud storage, Apple Pay and Apple News.

Apple operates in a highly competitive industry and has continued to perform and stay ahead of the competition. There are many large rivals in the industry that bring fierce competition so Apple needs to consistently innovate and take advantage of opportunities and explore new markets.

· How would you match the organization’s strengths to its opportunities?

As the smartphone and tablet market become saturated, Apple Inc needs to look for different growth opportunities. Augmented and virtual reality can offer a big opportunity for Apple Inc to break into. According to IDC, the AR and VR markets are expected to reach $18.8 billion in 2020 ("Worldwide Spending On Augmented And Virtual Reality Expected To Reach $18.8 Billion In 2020", 2019).

Tim Merel from TechCrunch (Merel, 2019) said that the AR market needs to overcome 5 obstacles to become a mass market:

· hero device (i.e. an Apple-quality device, whether made by Apple or someone else)

· all-day battery life

· mobile connectivity

· app ecosystem

· telco cross-subsidization

Apple’s product ecosystem, its ability to create proprietary software partnered with the release of the new iPhone 11 and Apple’s recent acquisitions of 3D technology and face recognition companies like PrimeSense, Metaio and RealFace, the company is capable of overcoming all 5 obstacles (Johnson, 2019).

Apple was the first company to come out with a voice-activated virtual assistant called Siri. This gave Apple’s devices a competitive edge over their rivals. Apple became complacent and did not maintain their competitive advantage. This gave competitors like Google and Amazon an opportunity to create and market their own virtual assistants like Google Voice, Amazon Alexa, Amazon Echo and Microsoft Cortana. Apple can increase their efforts to continue and develop and expand Siri’s capabilities to strengthen their product ecosystem, provide a better user experience and remain competitive.

The IDC forecasts that the market for wearable technology will grow to 489.1 million units by 2023. Out of all wearables, the most common will be earwear and smartwatches that will account for 55.9% and 22.3% of the market ("Wrist-Worn Wearables Maintain A Strong Growth Trajectory In Q2 2019", 2019).

The top contributing factor to the increase in wearable market is the demand for health-related wearables. The Apple Watch comes equipped with features that measure activity levels, heart rate, blood pressure and sleep patterns. Apple is well positioned to take advantage of the increase in this market by enhancing the features available in the Apple Watch.

· How would you convert the organization’s weaknesses into strengths?

Apple has relied on iPhone sales as a main source of revenue. When the iPhone entered the Chinese market in 2009, it became the company’s second largest market compared to the US. Apple products are also considered status symbols due its price but also offered quality that no other company can beat. Since iPhone prices were high, it was seen as a luxury item that only rich people can afford. This created an opportunity for Chinese rivals like Huawei, and Xiaomi to manufacture highly comparable smartphones and tablets and sell them at much lower prices. These new options converted many Chinese consumers to support and buy products from Huawei and Xiaomi instead of Apple. This resulted in 16% revenue drop in China in 2019 ("China's Smartphone Market Falls 14% In 2018", 2019). Apple should change its strategy in China and leverage their brand recognition and innovation to stay ahead of the competition and increase market share.

· What recommendations do you have to mitigate the impact of the threats?

When the iPhone was first released in 2007, it disrupted the whole mobile phone market and set the standard for new smartphones. Since that time, smartphones have improved a lot and it is increasingly difficult for Apple to differentiate its iPhones from other smartphones. New changes released by Apple are very incremental and nothing ground-breaking. Many smartphones offer the same features, similar designs and color choices as the iPhone. The only major differentiator between the iPhone and rival devices is Apple’s iOS. The only competitor to iOS is Google Android, which is available on every non-Apple smartphone around the world. If Android continues to improve and offers a great customer experience, the iPhone’s unique selling point will disappear. Apple’s brand loyalty plays a significant role in Apple being able to maintain market share. Apple needs to find a way to open its iOS software to third party developers and make it compatible with other operating systems while maintaining safety and brand integrity.

· What action(s) does the organization need to take to advance their organization goals and/or expand their competitive advantage? Why does the organization need to take this/these action(s)?

The smartphone and tablet market are getting saturated and this has a negative impact on Apple’s revenue and profitability but there are many avenues that Apple can pursue to maintain competitive advantage and ensure continued growth and success.

Apple Inc should continue to focus on developing and expanding its proprietary software and hardware systems. These are the company’s major differentiators and main competitive advantage over its rivals. Apple should also improve its research and development competencies and introduce more innovative products at a faster pace.

Changing the strategy in China should be addressed as soon as possible. The Chinese market is the largest smartphone market in the world and increasing and maintaining market share is vital to the company’s continued success.

Enhancing smartphone and wearable technology features leads to many opportunities for continued growth for Apple. The company should also increase focus on the AR and VR market since Apple already has the capacity, resources and capability to dominate in this field.

Citations

Global 500 | Fortune(2019). Retrieved from https://fortune.com/global500/2019/search/

Apple, Inc Form 10-K For The Fiscal Year Ended September 28, 2019(2019). Retrieved from https://s2.q4cdn.com/470004039/files/doc_financials/2019/ar/_10-K-2019-(As-Filed).pdf