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In business, problems can present themselves as obstacles to keep them from further
growing, and in Apple’s case, it has some notable organizational problems. In the most recent
years, Apple had dealt with limited distribution networks, high selling prices, controlling
proprietary, high-end market sales, and aggressive competition from other tech companies such
as Microsoft and Dell (Enderle, 2022). Other issues were imitation since a lot of companies are
producing the same products Apple is producing, like Samsung releasing their new phones at the
same time as Apple, and the increasing labor costs in other countries where Apple operates.
Apple’s stock has also decreased in the last few months because of trade strains and other factors
such as iPhone reports and has been dealing with trade uncertainty since they have had disputes
with Qualcomm over licensing rate and fees (Cain, 2020)
Subsequently, Apple is now dealing with three big problems, the first is that the mobile
phone market has now evolved into a PC market because customers do not have the same
excitement over new laptops compared to the past years. Second, introducing a new product has
become much more difficult because although Apple changed the world with the iPod and
iPhone, some products have not made a lot of money, making it hard to brainstorm ideas for a
new release. Third, Apple is planning on substituting high-margin hardware with unremarkable
service revenue to stop the decline in profits (Harris et al., 2021). It all started when the iPhone
came out in 2007, where it was not yet a big deal but after 2010, Apple sold over 8 million
iPhones and 47 million in 2018. The iPhone has also driven Apple because it has evolved from a
large computer company with a profitable venture in MP3 players to a huge multinational
operating around the world in the last decade. The iPhone has since come up with new features
like alarm clocks, calendars, and reminders, leaving no room for ordinary items to keep track of
those things. However, there has been a growing concern from activists and other people about
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the potential negative costs of selling new products to millions of consumers, especially those
who upgrade their phones every few years. This concern is valid because upgrading to a new
phone can be costly and add an unnecessary expense to one’s budget, but these companies need
to make a profit, so they keep offering new capabilities (Leswing, 2019).
On the other hand, Apple never opens its operating system to the outside to develop
hardware to work with the products, keeping the sales to itself. Although this design exercises
controls to meet its standards, it has negatively impacted the hardware’s broad application,
including computers in a small market. Apple also has a limited distribution network because of
the company’s exclusivity policy, meaning that the company meticulously chosen its authorized
sellers for the products (Smithson, 2023). However, Apple’s premium pricing strategy has
enabled a weakness in having much of its sales revenue come from the high-end market, a
market that consists of middle- and high-class customers. The low-class customers embody a big
number of buyers in the global market but cannot buy any Apple products because of their
expensive prices. Of course, if a phone or a tablet is higher than your budget, then it is clear you
cannot buy it if the product adds to other expenses because it is not smart to buy something
expensive if you do not have enough money saved up to cover the cost (Smithson, 2023)
The biggest problem that Apple has been dealing with according to the 2015 case is that
its market capitalization has come to $700 billion, despite them having the most record sales in
2014. Then, in 2015, the iPod and iPad sales decreased, making Apple solely dependent on the
iPhone as their main source of revenue (Harris et al., 2021). Unfortunately, Apple’s
overdependency on the iPhone has become a huge issue because the smartphone market is very
competitive with the development of high technology, meaning that if the company wants to stay
on top, it will need to take on some risks to make its products desirable. So, this case tells us
4
whether Apple’s CEO Tim Cook can dominate the smartphone market and if he can revitalize the
iPad business and earn his place as a market leader in Apple Pay and continue succeeding with
the Apple Watch because the business has become more and more competitive with new
technology updates (Harris et al., 2021).
Some good solutions for all these issues are to distribute network expansion, higher
demand for tablets and phones, and creating new product lines. You can also build a loyal
customer base and earn a good reputation for creating and selling high quality products that work
well as they receive positive reviews. Finally, Apple can move into different media production
spaces to help further design the standards for those spaces to improve the outcomes. Apple’s
company analysis shows that it has a lot of major strengths that it can use to properly address its
organizational weaknesses, but it can also use its strengths to take advantage of the opportunity
to broaden its distribution network (Harris et al., 2021). It can also put its strong brand image and
fast innovation processes to good use by continuing to develop successful new product lines for
launching them. Yet, the company faces challenges of intense competition and product imitation
but can come to a resolution by using a strong patent portfolio to address these threats along with
keeping up the good innovation to secure Apple’s competitive advantage because the US is the
home market for Apple, but other countries have become a vital source for smartphone makers
and has become more aware of keeping its patents high, a lot of big companies are trying to
secure as many patents as possible. So, since Apple is getting a lot of global markets, it is
securing its patents in more and more jurisdictions, but to do that, the company must take risks to
keep the top spot (Harris et al., 2021).
Although Apple is a newcomer in the consumer electronics market because of its
innovation and experimentation, it is still holding onto its older strategies as a PC hardware and
5
software manufacturer and reluctant to change its business practices. Apple’s reluctance to
change its way of operating can make them a potential disadvantage because the old strategies
have been very successful in the last ten years while consumer electronics were developing, but
as technology continues changing, Apple can fall behind as other companies come up with new
ideas. Unfortunately, Apple appears to be making the same mistakes because it still refuses to
relinquish control, serving as a lesson to competitors to remind them to stay open to
collaborations and partnerships with other high-tech companies (Enderle, 2022).
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References
Cain, G. (2020, March 14). Samsung vs. Apple: Inside the brutal war for smartphone dominance.
Forbes. https://www.forbes.com/sites/forbesdigitalcovers/2020/03/13/samsung-vs-apple-
inside-the-brutal-war-for-smartphone-dominance/?sh=6954d2494142
Enderle, R. (2022, June 2). Microsoft Build: The difference between Microsoft and Apple.
eWEEK. https://www.eweek.com/apple/microsoft-build-the-real-difference-between-
microsoft-and-apple/
Harris, J. D., Lenox, M., & Doris, A. (2021, August 6). The core of Apple’s strategy. Darden
Ideas to Action. https://ideas.darden.virginia.edu/core-apple-strategy
Leswing, K. (2019, December 18). The iphone decade: How Apple’s phone created and
destroyed industries and changed the world. CNBC.
https://www.cnbc.com/2019/12/16/apples-iphone-created-industries-and-changed-the-
world-this-decade.html
Smithson, N. (2023, October 21). Apple Inc.. SWOT analysis. Panmore Institute.
https://panmore.com/apple-inc-swot-analysis-recommendations
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