Apple, Inc. has been on the list of the most successful companies worldwide for quite some time. The company has offered its customers innovative and unique technology products and high-quality software services. Among Apple’s products, the iPhone is the most popular and successful. For example, in the fiscal year of 2021, the sales of the iPhone amounted to $191 billion, representing 52% of the overall revenue in the same year, which was reported at $365 billion (Laricchia, 2022). Considering Apple’s success, it is important to conduct a SWOT analysis of the company to evaluate its strategic advantage against competitors.
Strengths
Among the core strengths that Apple has over its competitors is that it has a highly valuable brand. Nine years consecutively, Apple has been named the number one brand in Interbrand’s (2021) Best Global Brands 2021 ranking, with the brand valued at $408 billion. In the ranking, Apple is followed by Amazon and Microsoft, with the brands valued at $249 billion and $210 billion, respectively (Interbrand, 2021).
The high value of the brand leads to Apple being globally recognizable. This means that the company can retain existing customers in the international arena while also acquiring new ones because Apple is a desirable brand. Besides, both regular customers and professionals prefer purchasing from Apple because of the leading technologies that enable high performance. Besides, according to Saba (2021) for Reuters, Apple spends 7% of its annual revenue ($19 billion) on research and development.
Weaknesses
Due to the high quality of products that Apple offers, it can be considered a luxury brand as the prices are often higher compared to competitors. This means that lower-income consumers cannot afford to pay for Apple products. Besides, the company does not see the need to invest excessively in advertisements while its competitors do. In terms of its marketing and promotion efforts, Apple relies predominantly on its flagship retail stores. Another point of weakness is that Apple products are incompatible with the devices made by other brands, which means that customers must exclusively buy from Apple to ensure that all of their gadgets can interact with one another.
Opportunities
For Apple, consistent customer growth is the main opportunity for expanding the business. The company has a rate of customer loyalty of over 90%, which means that there is always a large audience waiting for Apple to release new products (AppleInsider Staff, 2021). The company also has the opportunity to grow its distribution network because not it is limited. Through the use of AI, Apple can extend the range of services, features, and applications used on their devices, thus offering more than their competitors. In addition, Apple can expand into chip and semiconductor manufacturing to increase its market value.
Threats
The competitiveness of Apple is threatened by counterfeit products because of the brand’s popularity, with companies manufacturing low-quality substitutes and selling them to lower-income customers. Because of the increasing competition in the market, Apple has to deal with brands such as Samsung and Google that come up with new technological solutions, which means that the company should either introduce better devices or revise the pricing policy. In terms of reducing prices, it will be challenging for Apple because the government of the United States has set increased tariffs on Chinese imports, which leads to an increase in overall costs.
References
AppleInsider Staff. (2021). Apple has most loyal smartphone customers in US, study finds. Web.
Interbrand. (2021). Best global brands 2021. Web.
Laricchia, F. (2022). Apple’s revenue worldwide 2004-2021. Web.
Saba, J. (2021). Apple has the most growth fuel in hand. Reuters. Web.