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Apple is a technology company majorly dealing in the design, manufacture and marketing of smartphones, tablets and personal computers. The global smartphone market has become highly fragmented into high-end and low-end players. Apple being a high-end market player faces competition primarily from Samsung. In 2018, Apples share of the global smartphone industry had fallen to third, behind Huawei and leader Samsung. It is the first time Apple is not in the top 2 global smartphone firms in the world since 2011. Apple has also lost market share in China, falling from top spot to 4th as it battles low cost Chinese rivals.
Using a pestle analysis for Apple, this report examines how various external factors have impacted the growth potential and performance of Apple. The analysis includes the effect of US tax cuts, and how escalating US-China trade tensions are likely to affect its future revenues and performance.
In addition, the report looks at how developments in technology and demographics can favor further growth of Apple. Using Swot and BCG Matrix analysis, the report identifies Apple’s major strengths and weaknesses and strategies the Cupertino based tech giant can use to exploit emerging opportunities such as demand for smaller wearable devices, while mitigating threats and minimizing weaknesses.
Using Porters five forces, the report examines how Porters five forces of competition have shaped the global smartphone industry, leading to the commoditization of smartphones at the low end of the market and the counter strategies Apple has devised in the battle against this increased commoditization and powerful low cost rivals.
Jonathan, K. Kush (2019) "Apple Pestle Swot Porters Five Forces and BCG Analysis 2018" 123 Writing [Online] at https://www.123writing.com/free-sample/apple-pestle-swot-porters-five-forces-and-bcg-analysis-2018
Apple Business Strategy Case Study
Key Learning Outcomes
- Understand the broad macro-environment of Apple and the smartphone industry in terms of political, economic, social, technological, environmental and legal factors (PESTEL/PEST/STEEPLE).
- Understand the major strengths and weaknesses of Apple using the SWOT framework.
- Analyse the various strategic business units in Apple's portfolio and assess which ones are the stars and cash cows generating the most value, or the question marks, and dogs that may need further investment or divesting to achieve a balance of the portfolio.
- Analyse the global smartphone industry and how the five forces have affected Apple and rival firms and the impact on industry structure, attractiveness, and profitability.
In August 2018, Apple became the first company to reach a market capitalization of US$1trillion, beating old rivals such as Google and Microsoft. The Cupertino based tech giant is known for manufacturing a wide range of iconic consumer electronics such as the iPhone, iPad, and computer software like Mac OS, iOS and online services like Apple Music. Founded in 1976 by Steve Jobs, Steve Wozniak and Ron Wayne (Dormehl 2018), Apple now operates 492 stores across 19 countries worldwide (Dunn 2017).
In 2017, Apple made annual revenue totaling $229.23billion up from $215.64billion in 2016 (Richter 2018) with a profit of $48.35billion up from $45.69billion in 2016 (Annual Report and Form 10K 2017). Apple’s three major markets include USA, UK and China with a market share of 45%, 37% and 17.4% market share respectively ahead of major competitor, Samsung with market share of 29.5% in USA, 35% in UK and 2.2% in China.
Using PESTLE, SWOT, Apples BCG Matrix and Porters Five Forces framework, the following sections examine Apples internal, external and competitive environment to try and understand the global smartphone industry and the future of Apple's iPhone.
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