SWOT and KSF Report on Apple Computers

SWOT and KSF Report on Apple Computers

  1. Introduction

This SWOT and KSF study on Apple will get down with a brief description and history of Apple. This is of import as Apple’s development since its initiation in 1976 by Steve Jobs and Steve Wozniak has been fickle, to state the least, and a SWOT and KSF analysis carried out in the early or in-between old ages would look really different from such an analysis today.

Apple Computer, Inc is an American computing machine engineering company with one-year gross revenues of $ 13.9billion and 14,800 employees worldwide. Apple develops, sells and supports a series of personal computing machines, laptops, portable media participants and package and hardware accoutrements. Its most celebrated merchandises are: the iPod portable music participant, the iTunes shop and the Macintosh line of personal and laptop computing machines. The company operates retail shops in the United States, Canada, Japan and the United Kingdom. [ 1 ]

  1. Aims

The aims of this paper are as follows:

  1. To give a brief history of Apple since its beginnings in 1976, foregrounding cardinal developments and events.
  2. To transport out an internal analysis of the company: place its strengths and failings
  3. To transport out an external analysis of the company: place the chances and menaces in the market place
  4. To place cardinal success factors by industry, administration and clients.
  1. History

On October 6, 1997, Michael Dell, CEO of Dell Computers, was asked what he would make if he owned Apple. He is reputed to hold said: “I would shut it down and give the returns to the shareholders.” [ 2 ] On January 13, 2006, Apple’s market capitalization surpassed that of Dell! [ 3 ] The fiscal ups and downs of Apple reflected in this state of affairs necessitate some brief account.

The beginnings of Apple in 1976, like Hewlett Packard, were in a garage. Jobs and Wozniak sourced constituents from where they could and sold personal computing machines at low volumes – the Apple I and subsequently the Apple II. They quickly became market leaders, nevertheless, and began to symbolize the personal computing machine revolution. Their name ab initio was built on good coloring material artworks and high physique quality. They were the first to present a personal computing machine on to the market with in writing user interface ( GUI ) , the Apple Lisa and with the coming of spreadsheet package their repute was enhanced by the association with the so market leaders, Visicalc, which enabled them to come in the concern market.

Apple more or less invented the DTP ( desk-top-publishing ) market in the early 1980s with the debut of the Macintosh but there were proficient jobs, internal dissensions and Steve Jobs left in 1985 to be replaced as Chief executive officer by John Sculley and set up his ain company, Next. During this period ( station 1985 ) IBM launched its scope of Personal computers and Microsoft launched Windows – in direct competition with Apple. Apple Lisa ne’er took off in the market due to its high monetary value.

Under Sculley’s leading the Powerbook scope of laptops were introduced in 1989 – the first laptops to hit the market – and for two old ages Apple experienced a roar in gross revenues and net incomes. Microsoft and IBM were, nevertheless, invariably deriving land and the combination of IBM, Microsoft and Intel were going the industry criterion. A variegation into consumer electronics – digital cameras and PDAs ( personal digital helper ) failed as did the effort to action Microsoft for larceny of rational belongings.

In the mid 1990s Apple seemed to hold lost its manner. It suffered stultifying fiscal losingss and its portion monetary value sank to a 12 twelvemonth low. Continuous efforts to better the operating system and launch new theoretical accounts – partially in coaction with IBM and Motorola – failed. In 1997 Apple purchased Next and Jobs one time once more became CEO of Apple. One twelvemonth subsequently the extremely successful iMac was launched, betterments were introduced to runing systems – based on Unix but with much improved user interface – and in 1998 Apple had its first profitable twelvemonth since 1993. The undermentioned twelvemonth it entered the digital picture redacting market with package foremost for consumers and so for professionals. The first Apple shops were introduced in 2001, as was the digital sound participant, the iPod. This was followed by the launch of the iTunes shop, which had achieved 1.5 billion music downloads by September 2006. Other consumer applications followed, to be grouped into the iLife suite.

Hardware lines were clearly positioned to aim consumer and professional markets: white polycarbonates for consumer lines – the iMac and iBook – and metal enclosures for the professional lines.

The most dramatic recent development has been the partnership with Intel, its former challenger. The first Apple computing machines with Intel french friess were introduced in January, 2006. This has resulted in the launch of a twine of new theoretical accounts and farther improved operating systems which enable usage of Windows and Microsoft Office on Apple machines. In the 2003 – 2006 period Apple’s portion monetary value had risen from a depression of $ 6 to a monetary value in October, 2006 of $ 80. [ 4 ]

  1. Internal and External Analysis

SWOT analysis is a simple tool, favoured by strategic contrivers, which enables analysts to research the linkages between the firm’s resources and its environment. [ 5 ]

The point is frequently made by authors [ 6 ] that it is hard to separate between strengths and failings and chances and menaces. Piercy makes the extra point that many SWOT analyses contain little more than axiomatic “motherhood” statements which contribute small to the existent planning undertaking. [ 7 ] He recommends that SWOT analyses be aggressively focused if they are to be utile and that they have a clear client orientation. [ 8 ] The analysis below will take this advice to bosom.

3.1 Internal Analysis

  1. Strengths

I will specify a strength as any resource or capableness which either has been, or can be, transformed into a benefit for clients and an advantage over rivals. Strengths will be evaluated under the undermentioned headers:

  • Merchandises and trade names
  • Technology
  • Peoples
  • Systems and construction
  • Partnerships

Merchandises and trade names: In wide footings Apple’s merchandises can be split into computer-related ( Personal computers and laptops ) and entertainment-related ( iPods and iTunes ) . Pre 2001 Apple’s gross revenues grosss came about 100 % from gross revenues of computing machine hardware and package. In October, 2006 gross revenues of iPods made up over 30 % of gross revenues gross, gross revenues in Apple Stores about 15 % and iTunes download gross revenues about 10 % . Apple has approximately 70 % of the portable digital sound market and 82 % of the music download market. [ 9 ] These trade names are clear market leaders and their success appears to bring forth a “halo effect” which has increased gross revenues of laptops and Personal computers in 2006 ( the Mac trade name ) . Apple has moved quickly from a trade name which had a little cult following to one which is now accepted and respected by the mass consumer and concern markets. With these strong trade names and the success of Apple Stores Apple has the foundation for sustained gross revenues and net income growing. The new “i” trade name, iTV, which enables users to download movies on to their Television will doubtless be a immense success in 2006-7. It was launched in September, 2006. [ 10 ]

Technology: With the iPod and iTunes Apple is at the taking border of the digital amusement concern and invariably has been able to present merchandise polishs and extensions via in-house design expertness and partnerships with external providers. It has since its beginnings in the seventiess had a repute for proficient excellence in the physique of its computing machines and for the ease-of-use of its package ( see the History subdivision above ) . This is now enhanced via its partnership with Intel, which enables it to vie straight for the mass market against market leaders, Dell and Hewlett-Packard.

Peoples: Steve Jobs, the co-founder of Apple, has transformed the company from a province of proficient bankruptcy in the late ninetiess to a money-making machine in 2006. [ 11 ] It is hard to conceive of that Apple could hold been every bit successful as it has been without Jobs. He is the clear R & A ; D and Marketing leader. His repute has enabled him to enroll first-class people in cardinal places, who have been systematically able over the past 5 old ages to establish new and modified merchandises on to the market at great velocity.

Systems and Structure: Apple appears to hold an administration which allows Jobs and his co-workers at the top to travel really fast from merchandise construct to market launch. Jobs has the repute of being a selling mastermind and is able quickly to win the support of his co-workers and spouses.

He does non hold the job of holding to counter the bureaucratic constructions and civilization of a Ford, GM or Motorola – or even Microsoft.

Partnerships: Apple has partnerships with Intel on the computing machine side, with all the major music companies for iTunes, with Disney, Touchstone and Miramax for iTV. It has late set up a partnership with a major retail shop in the USA, Best Buy, which could “increase its retail footmark by 10 % ” [ 12 ] and it is likely that the ailing Dell Computer will shortly wish to add Apple to its portfolio. It is already working with HP, who bundle iTunes package on to their Windows PCs. [ 13 ]

  1. Failings: Apple’ major failing in the yesteryear has been the mutual exclusiveness of its criterions and, as a consequence, its inability to be other than a niche participant. This has made distribution hard. On-line gross revenues, the success of the “i” trade names, the partnership with Intel and the Apple shops have removed this failing. The lone other clear failing is its chief strength, Steve Jobs. If he were to travel, for whatever ground, market assurance in Apple would likely melt and there would be uncertainties about its ability to last.
  1. External Analysis
  1. Opportunities

In the portable amusement concern Apple is already clear market leader and, via go oning natural market growing, widening into other than the young person market, modifying and widening merchandises to go on and reenforce its clasp on the young person market ( digital picture and the iPhone ) and constructing its online film concern it has important growing chances for the hereafter.

If, nevertheless, as some initiates suggest, the focal point of place amusement in the hereafter will be the Personal computer, it needs rapidly to construct its base of Personal computers.

“Apple’s job is that it has merely 2.6 % of the universe market for PCs whereas Windows runs on about all the rest.” [ 14 ] Apple already has managed to hike its Personal computer and laptop gross revenues via its partnership with Intel. Partnerships with BestBuy, HP and Dell and the “halo effect” of the iPod should besides enable it to turn computing machine gross revenues rapidly.

  1. Menaces

Apple appears to be in a really strong place in both of its major markets. It is clear leader in the 1 and has clearly differentiated merchandises with huge gross revenues potency in the other. The major menace is that it becomes self-satisfied, fragments itself by seeking to develop excessively many merchandises in new markets and therefore loses market portion in its nucleus product/markets. There is ever the extra menace in such fast-moving markets that a new thought emerge which renders current merchandises disused overnight. If Jobs and his R & A ; D squad stay near to the market, as they have done so far, and maintain their ability to travel really fast, this is improbable to be an issue. Another menace is the job of go oning to happen new spouses who will enable them to turn gross revenues. New spouses such as Dell ( potentially ) and HP may see them as rivals and may therefore resist partnership. The same will surely besides be true of the iTV concern where major movie corporations may see iTV as competition for their film and DVD gross.

  1. Key Success Factors
  1. Industry

Specifying clearly the industry in which Apple competes is non easy, peculiarly as there is convergence across the different elements. I will simplify every bit much as I can by sorting the “industry” as holding three constituents: Personal computer and portable computer science aimed at consumers, Personal computer and portable computer science aimed at concerns and portable and place amusement.

  1. Personal computer and portable calculating – consumers

The key to Microsoft and Intel’s success in this sector was that, via the initial links with IBM, they became the de facto criterion for the sector. Merely as there was no room for VHS and Betamax, so was there barely room for other than the cardinal participants. Compatibility remains important if the mass market is to be reached. Niche participants tend to stay in their niches.

Linked to this is the importance of accomplishing and, keeping quality and intensive distribution utilizing choice spouses who can offer a high-quality after-sales service.

The 3rd important factor is that of design. When features become generic the purchase determination is frequently based on design excellence.

If the monetary value is non competitory ( Apple’s before job ) the above are irrelevant.

  1. Personal computer and portable calculating – concern

Compatibility is even more critical here, as is value for money and the ability to warrant acceptable, dependable after gross revenues service geared to the peculiar demands of the industry. Partnership with believable 3rd party resellers ( VARS ) is besides a critical success ingredient, backed up by professional online support.

  1. Portable and place amusement

This market is chiefly a young person market and is driven by easiness of usage and design. Despite Apple being market leaders there are many participants and many large companies among these participants, all acute to distinguish themselves. Differentiation will come from a mix of design, flexible and efficient supply concatenation direction, intensive distribution and inventive advertisement.

4.2 Administration

Apple has a tradition of underscoring the user experience, instead than the engineering which delivers this experience. This “total client orientation” is supported by an informal corporate civilization, non-hierarchical construction and insouciant garb. Creativity and individualism are fostered which consequences in originative, gifted people being attracted into the administration. The company runs an Apple Fellowship programme which awards Apple Fellowships to staff who have demonstrated extraordinary leading or who made cardinal parts to proficient developments. Each chap is expected to move as a leader and airy in his/her peculiar country of expertness. This helps to prolong creativeness and dynamism within the company. [ 15 ]

4.3 Customers

Four cardinal client sections need to be understood:

  • Current users in the young person market
  • Non-users in the young person market
  • Non-users in the older age groups
  • Business non-users ( there are really few users )

Current users – youth market: the market is driven by image, monetary value and new design characteristics. Growth will come from Apple’s ability to do current offerings obsolescent and to widen the scope of merchandises. Growth in the Personal computer and laptop sectors could be accelerated by clearly associating IMacs to the iPod and iTunes.

Non-users in the young person market: likely non deserving passing a batch of clip on. Those interested in the merchandise will likely hold bought already. Others may be attracted by lower monetary value but this would cannibalize gross revenues of higher border merchandises.

Non-users in older age groups: the cardinal success factor here may good be the ability to place the amusement merchandises off from their young person and to emphasize more the high quality of music and picture reproduction. ITunes would necessitate to be widen its listings to more serious music, the iPod should emphasize integrating with place and in-car systems. If the computing machine ranges are to win the accent will necessitate to be on compatibility with Windows criterions.

Business non-users: Business purchasers will seek above all dependability and compatibility with current systems. Agnosticism could be removed early if Apple were able to change over a few cardinal mention clients. They will necessitate distribution spouses who specialise in system merchandising. As the best 1s will be presently tied in with the competition this could good take clip to develop. Once dependability, compatibility and distribution issues are solved Apple’s design excellence and user-friendliness could give it clear competitory advantage.



Grant, R ( 1997 ) , Contemporary Strategy Analysis, Blackwell Business

Piercy, N ( 2002 ) , Market-led Strategic Change, Butterworth-Heinemann

Journal Articles

Anonymous article inThe Economist,“Apples for Couch Potatoes” , September 14,


Anonymous author inThe Economist,“The Digital Home” , September 1, 2005

Hesseldahl, A ( 2006 ) , “Record-breaking quarterly gross revenues of the Mac are seting Apple

into the running for a top computing machine spot” ,Business Week,October 19


hypertext transfer protocol: //en.wikepedia.org/wiki/Apple_Computer

hypertext transfer protocol: //en.wikipedia.org/wiki/Apple_Computer # Corporate_culture


www.CNET News.com, October 6, 1997

www.macobserver.com, January 16, 2006