Apple Inc., formerly known as Apple computers Inc., is an american manufacturer of computer systems, computer peripherals and computer software based in Cupertino California, USA. It was founded on April 1st, 1976 by Steve Jobs and Steve Wozniak and soon financially backed by Ronald Wayne. In 1977, Apple Computers Inc. was incorporated without Ronald Wayne, who sold all of his shares for a mere $500.
Products and Services:
? Hardware products: such as IPhone, IPad, MacBook Air, Macbook Pro, IMAC, Apple TV, IPod Touch, and Apple Watch series
? Software Products: such as iOS, MacOS, TvOS, WatchOS .
? Services: Internet Services, ICloud, AppleCare, Apple-Pay
Apple is a very collaborative company and as Steve Jobs said the company is “organized like a startup”. Apple follows a traditional hierarchy, see Appendix A. During the 1990’s Apple encountered serious management issues and lack of funds which put them on the brink of bankruptcy due to Steve Job being ousted from the company. As a result, Jobs was called back and since then Apple inc. has emerged as a successful tech company and today, it is the most valuable company in the world, with a value exceeding $9001 billion dollars USD.
ENVIRONMENTAL ANALYSIS (Performance using SWOT & PEST)
Issue: Is Apple’s financial position suitable to yield profits while maintaining its dividend cycle, addressing the safety if creditors claim as well as accounting its fixed and variable expenses?
Apple Inc. is the most valuable brand in the world, and in 2015 it became the first company to surpass $700 billion2 USD in value. According to Forbes, Apple has remained the most valuable brand for the seventh straight year following 2016 earnings into the end of fiscal year 2017. This is mainly backed by Apple’s strong brand image and presence in the North American and European Market. Apple Inc. also has the largest cash reserve in the world surpassing the U.S. treasury at $216 Billion USD3 in 2016. This positions apple as a leader in tech industry as it has surpassed its competitors which had been established way before Apple had been founded. Apple also follows an unique approach to the organizational structure, similar to that of a startup, allowing Apple to be very productive as each action is overlooked by another to ensure nothing goes wrong.
In addition to strengths, Apple has various business opportunities. Utilizing its cash reserves, Apple can spend large amounts on R in order to innovate and streamline its products. Apple can also diversify products to attract middle-class customers, as currently it projects itself as a premium brand with highly priced products. Considering their current market, Apple is the most valuable company, yet it has much room for expansion which can tremendously drive its sales. Apple can develop larger distribution networks to attract offshores companies. Apple Inc. believes on providing quality products which has built brand loyalty, which can help develop brand equity in untapped markets.
Although Apple Inc. is the most valued company, it does have some weaknesses and threats. Apple’s highly priced products limit their market share. This proves to be advantageous for competitors like Samsung, which offer identical yet sometimes better products for a cheaper price. In addition to this, as apple has developed an isolated and solitary system for its products, i.e. its own operating system (iOS) and cloud services, it prohibits seamless interaction with products from other brands. It forms a sort of closed ecosystem which may obstruct certain tasks such as quick media transfer between devices. Apple is the only major company which runs on its own operating system, design and cloud services with each of its major competitor sharing the Google Android operating system. The competitors are a potential threats as they can imitate Apple products within a short time frame and provide identical services leading apple to lose market share. Lastly, consumer preferences and choices change according to extremely fast technological advancements, which Apple can capitalize on or lose its customers if it fails to maintain pace.
But since Apple has sufficient cash reserves and a strong market share, it has the capability to avoid potential threats and even capitalize on emerging trends much before competition does, hence maintaining Apple’s strong market position.45Before a decision is made, we must consider Apple’s liquidity ratios and its solvency.
*To see a diagrammatic SWOT and PEST analysis, see Appendix B1 and B2
1 “Apple Is Worth Over $900 Billion. But It Won’t Be the World’s First Trillion-Dollar Company – Fortune – Apple news,” Newslocker, November 09, 2017, 1, accessed January 03, 2018, http://www.newslocker.com/en-in/news/apple/apple-is-worth-over-900-billion-but-it-wont-be-the-worlds-first-trillion-dollar-company-fortune/.
2Kurt Badenhausen, “Apple Heads The World’s Most Valuable Brands Of 2017 At $170 Billion,” Forbes, May 30, 2017, , accessed January 03, 2018, https://www.forbes.com/sites/kurtbadenhausen/2017/05/23/apple-heads-the-worlds-most-valuable-brands-of-2017-at-170-billion/#2e0868a8384b.
3 Jeremy C. Owens, “Apple isn’t really sitting on $216 billion in cash,” MarketWatch, January 27, 2016, , accessed January 03, 2018, https://www.marketwatch.com/story/apple-isnt-really-sitting-on-216-billion-in-cash-2016-01-26.
4 “Apple Inc. PESTLE Analysis,” PESTLE Analysis, June 21, 2016, , accessed January 03, 2018, http://pestleanalysis.com/apple-pestle-analysis/.
5 Nathaniel Smithson, “Apple Inc. SWOT Analysis & Recommendations,” Panmore Institute, January 29, 2017, , accessed January 03, 2018, http://panmore.com/apple-inc-swot-analysis-recommendations.