The strengths of Apple enable the company to withstand threats in its business environment. These threats can reduce business performance. In Apple’s case, the following are the most notable organizational strengths:
- Apple is one of the most valued and strongest brands in the world. The strengths of this company show its capability of introducing profitable new products by virtue of its strong brand image.
- Apple maintains its finest pricing strategy, which comes with high profit margins. This can be known as the major strength of Apple because it creates flexibility for the firm to adjust prices while ensuring significant profits.
- Apple is recognized for its rapid innovation based on the company’s intensive growth strategies. Rapid innovation enables it to keep up with the latest technologies to ensure competitive advantage. The company’s strengths are difficult to compete with, thereby supporting the firm’s continued leadership in the industry.
Weaknesses can serve as obstacles to business growth. In Apple’s case, the following organizational weaknesses are the most notable:
- Apple has a limited distribution network because of the company’s policy of exclusivity. For instance, the company carefully selects authorized sellers of its products.
- Apple’s exclusive strategy supports control over the distribution of products but restricts the company’s market reach. In addition, because of the premium pricing strategy, Apple has the weakness of having most of its sales profits from the high-end market. This market is composed of clients from the middle-to-upper class. As the majority of buyers in the global market are from the lower class, it represents the inability of users to purchase Apple products because of the relatively high prices. Thus, the company’s pricing and distribution strategies impose limitations or weaknesses in the business.
The significant opportunities that the company can exploit, influence the strategic direction of business organizations. In Apple’s case, the following are the most significant opportunities in its business environment:
- Apple has the opportunity to expand its distribution network. Such opportunity directly relates to the weakness of the limited distribution network for the company.
- Apple has the opportunity to explore new product lines. Its current product lines are highly successful.
- Developing new product lines can support the company’s growth.
Threats can limit or reduce the financial performance of companies. The following threats are the most significant for Apple:
- Tough competition in the industry is partly because of the aggressiveness of companies. Apple competes with firms such as Samsung, which also uses rapid innovation. Because of the aggressive behaviors of competing firms, it is important to have strong fundamentals for maintaining competitive benefits.
- Apple also greatly faces the threat of imitation. This threat is significant due to a large number of businesses that can easily imitate Apple’s products. Moreover, some local and regional firms could partially imitate Apple’s product design too.
Rising labor costs in Apple plants, for instance in China, can reduce profit margins or push selling prices even higher.