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SWOT analysis and Encapsulation of Apple Business Model

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 IJFANS International Journal of Food and Nutritional Sciences

ISSN PRINT 2319 1775 Online 2320 7876

Research paper © 2012 IJFANS. All Rights Reserved, UGC CARE Listed (Group -I) Journal Volume 8, Issue 4, 2019

SWOT analysis and Encapsulation of Apple Business Model

Dr. Anuradha Averineni1,

1
Assistant Professor, Koneru Lakshmaiah Education Foundation, Vaddeswaram, Andhra
Pradesh-522302, India, E-Mail: anu.averineni@gmail.com
Dr. Venkateswararao.Podile2
2
Professor & Head, BBA Department, Koneru Lakshmaiah Education Foundation,
Vaddeswaram, Andhra Pradesh-522302, India, E-Mail: vraopodile@gmail.com

Abstract
Apple Computer, Inc. is a Public Limited Company. It was founded on 1st April,1976. It was
founded by Steve Jobs, Steve Wozniak and Ronald Wayne. It serves worldwide with retail
stores. Its Headquarters is at Apple Park Way, Cupertino, California, U.SIt relates to
consumer Electronics, Software and Online services Industry. In this Paper an attempt is
made to analyze the strengths, Weaknesses, Opportunities and Threatsof Apple Computer
Inc. An attempt is also made to analyze Customer Segments, Value Proposition, Channels,
Customer Relationships, Revenue Streams, Cost Strutureof Apple Computer Inc

Key Words: Apple, SWOT, Customer Segments, Revenue Streams

Introduction
Apple Computer, Inc. is a Public Limited Company. It was founded on 1st April,1976. It was
founded by Steve Jobs, Steve Wozniak and Ronald Wayne. It serves worldwide with retail
stores. Its Headquarters is at Apple Park Way, Cupertino, California, U.S. It is traded as
Nasdaq-100 Component, It’s ISIN is US0378331005. It relates to consumer Electronics,
Software and Online services Industry. In this Paper an attempt is made to analyze the
strengths, Weaknesses, Opportunities and Threats of Apple Computer Incand to analyze
AppleComputer Inc Business Model

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Research paper © 2012 IJFANS. All Rights Reserved, UGC CARE Listed (Group -I) Journal Volume 8, Issue 4, 2019

Review of Literature
David Sjodin, Vinit Parida and Marko Kohtamaki (2023) had dealt with Artificial intelligence
enabling circular business model innovation. Goklas Siahaan, PilifusJunianto, Andi Tenri
Pada, Carolina F. Sembiring and Desideria Regina (2023) propounded Zero Waste Business
Model. Haochen Guo and b Junic Kim (2023) examined China’s New Retail Business Model
with Super Species case study. Heidi Coral Thornton (2023) dealt with Business model
change and internationalization. Herald Galingga Wira Shenta and Avanti Fontana (2023)
analyzed Optimizing Value for Customer Segment through Transforming Business Model
Canvas in case of MSMEs. KresnawidiansyahAgustian, Endang SaefuddinMubarok,
Agustian Zen, Wiwin and AuliaJanuar Mal (2023) dealt with the Impact of Digital
Transformation on Competitive Advantage and Business Models. Lukas Vartiak, Miriam
Garbarova and Juraj Fabus (2023) have done Comparative Analysis of Business Models of
Selected Accommodation Portals. M. Riesener, M. Kuhn, S. Schümmelfeder, and G. Schuh
(2023) examined Business Models in the Manufacturing Industry. Montijn van de Ven and
Paola Lara Machado, Alexia Athanasopoulou and Banu Aysolmaz, Oktay Turetken (2023)
dealt with Key performance indicators for business models.

Objectives
The study namely “SWOT analysis and Encapsulation of Apple Business Model” is done
with the following objectives.
1. To examine the strengths and weaknesses of Apple Computer Inc
2. To explore Opportunities and threats of Apple Computer Inc
3. To Probe into Customer Segments, Value Proposition and Channels of Apple
Computer Inc
4. To explore Customer Relationships, Revenue Streams and Cost Struture of Apple
Computer Inc

Methodology
The study namely “SWOT analysis and Encapsulation of Apple Business Model” is a
descriptive study. An extensive survey of literature on Business Model drives to the
conclusion that there is no specific study on Apple Business Model as well as on SWOT

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Research paper © 2012 IJFANS. All Rights Reserved, UGC CARE Listed (Group -I) Journal Volume 8, Issue 4, 2019

analysis of Apple Computer Inc. Hence, in this Paper an attempt is made to analyze the
strengths, Weaknesses, Opportunities and Threatsof Apple Computer Inc. An attempt is also
made to analyze Customer Segments, Value Proposition, Channels, Customer Relationships,
Revenue Streams, Cost Struture of Apple Computer Inc

Discussion
Strengths
The SWOT framework's Strengths component recognises Apple's strengths so that it may
exploit its vulnerabilities, seize opportunities, and fend off threats.
Brand Equity
For the seventh year in a row, Apple's brand worth has climbed to $612 billion, according to
Interbrand. Due to its cutting-edge technologies and distinctive style, Apple is unquestionably
the most recognised brand in the world. According to some reports, by 2022 it will rank third
in terms of brand value.
Original Products
When Apple releases a final product, their work is not finished. They start working on
creating a new one as soon as one is finished and launched. They don't waste time keeping
tabs on product sales. "We are already working on the following product when we release
one.
Numerous Product Options
Apple is able to turn a profit because of the variety of products they provide. Product lines
include Electric Vehicles, Software, Mac, iPod, iPhone, iPad, Apple Watch, Apple TV, and
Apple Energy.4. Design & Technology
The best aspect of Apple, and the basis for its fantastic brand equity, is both its design and the
technology itemploy’s. Apple's product design has always been sophisticated and elegant.
Weaknesses
First, Expensive Goods
Apple items can appear to be an upscale luxury due to their high price. The prices of the
goods are intended to appeal to middle-class and affluent buyers. People of low incomes
cannot purchase Apple items.
2. Loss of Market Share

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Research paper © 2012 IJFANS. All Rights Reserved, UGC CARE Listed (Group -I) Journal Volume 8, Issue 4, 2019

Due in large part to their reliance on the iPhone and iPad series, Apple's market share is also
declining. It suggests that Apple's business might be impacted if the demand for these
products declines.
3. Limited Promotions & Advertising
By cultivating committed clients, Apple has managed to maintain its position despite making
little promotional investments. The well-known and flagship retail locations of Apple play a
significant role in its marketing strategy.
4. Less selection in phone design options
There isn't much of a visual distinction between the iPhone and the iPhone 8 in terms of
appearance. It stayed close to its original appearance. The impression that you've been
utilising the same things for a long time is created by this.
5. Fulfilling Client Expectations
Since the 1980s, Apple has dominated the market, and consumer expectations are rising
rapidly. It is challenging to live up to the high expectations held by Apple's customers each
year.
Opportunities
1. Consistent Clients
Due to its significant market share and well-known brand, Apple is seeing an increase in
demand for its multiple devices. Users of Apple products demonstrate their brand loyalty by
showing an interest in new gadgets.
2. Professionals with experience
The product experts, researchers, and developers of Apple are highly skilled professionals
with a wealth of experience in consumer product branding. Apple's staff expansion gives
them the ability to continually develop new opportunities.
3. Increasing Technology Dependence
People are becoming more and more dependent on technology, especially cell phones. They
were more enthusiastic about handheld electronics. As a result, the demand for cellphones
may keep growing quickly.
4. A lack of environmentally friendly tech

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Apple has not yet made any products with eco-friendly technology available. The business
hasn't yet used or participated in the creation of sustainable, environmentally friendly
technology.
Fifth. Globalization
Consumers can now get technology products extremely easily because to market
globalization. This enables clients to quickly obtain their items from reliable businesses.
Additionally, it boosts sales, which raises the profit margin.
Threats
1. Disruption of the Supply Chain
The organization's operations have been impacted and disturbed by a number of recent
occurrences. It announced flat sales for the second quarter of 2020 due to supply chain
instability and declined to forecast yearly revenue for FY2020.
2. Changes in Technology
Nearly every day, consumer electronics are at the forefront of technology. Keeping up with
the latest trends will be a big challenge for the business. Apple has so far released a number
of ground-breaking items. Apple hasn't officially disclosed its new product plan, though.
3. Fresh rivals
Despite its fame as a brand, Apple nevertheless faces threats from rivals. Technology
developments have made it possible for Samsung, Google, and Dell to compete against
Apple. There are further choices. The biggest concern is the emergence of powerful rivals
who sell comparable goods for less money.
4. A Coronavirus Epidemic
China plays a significant role in Apple's supply chain and manufacturing. Furthermore, 14.5
percent of its $274 billion in revenue came from China. Apple's revenues have been
significantly impacted by the outbreak and may still be doing so in the fiscal year 2021.
5. Tablet and smartphone market potential
The demand for smartphones has historically decreased by 3%. There could be a number of
causes for this
Most people do not see any compelling reason to buy a new mobile phone when their old one
works perfectly well.

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Research paper © 2012 IJFANS. All Rights Reserved, UGC CARE Listed (Group -I) Journal Volume 8, Issue 4, 2019

Customer Segments
Customer segmentation is the process of dividing customers into groups based on common
characteristics so companies can market to each group effectively and appropriately.
TYPES
1.Geographic
2.Demographic
3.Behavioural
4.Psychographic
Value Proposition
A value proposition is a promise of value to be delivered, communicated, and acknowledged.
It is also a belief from the customer about how value will be delivered, experienced and
acquiredValue Proposition 1: “Think different”
Channels
A channel of distribution for a product is the route taken by the title to goods as they move
from the producer to the ultimate consumer or industrial user. It brings maximum profit to all.
The channel of distribution is very important to the producer and the consumer.
Both Apple's physical stores and its online store are part of their direct distribution method.
Apple's physical storefronts give them the ability to effectively manage their brand's
perception among consumers. As a result of seeing the same design everywhere, consumers
develop a very strong brand image. Additionally, they frequently open their businesses in
busy areas to maximise visibility. Apple sells straight through its website as well. Their
website is available in a wide variety of languages and may be accessed from anywhere in the
world.
Even Nevertheless, despite all of Apple's efforts, a sizable portion of their sales and income
come via channels of indirect distribution. Apple goods are available for purchase from
carriers and independent retailers. This includes discount- and convenience-oriented retailers
like BestBuy, Walmart, and Target. Apple sells its products through independent businesses
and cultivates a positive brand image through its physical locations.

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Research paper © 2012 IJFANS. All Rights Reserved, UGC CARE Listed (Group -I) Journal Volume 8, Issue 4, 2019

Customer Relationships
Customer relations refers to the process used by businesses to engage with customers and
foster long-term relationships with them. Right from assisting customers with their day-to-
day queries to creating long-term policies that lead to customer success
1. Posting a Tip a Day
A pillar of Apple’s Twitter strategy is to post one tip each day. These tips make customers
appreciate their Apple products even more because they help them discover features they
might not have known about. Apple often presents these tips with images or short videos,
which are easy for people to consume and share across their own social media networks.
2. Constantly Answering Customer Questions
While the Apple Support account posts tips and tricks, most of their effort is spent helping
customers sort out issues with their Apple products and services. Simply answering customer
questions makes up the vast majority of their tweets. Combining these two things (posting
their own content and answering questions that come in) is a smart way to do outbound
marketing without neglecting the most important thing: relationships with customers.
Revenue Streams
A company's revenue stream is the amount of money that it receives from selling a
particular product or service. A revenue stream is a source of income of a company or
organizationHow Apple Makes Money???
Apple's biggest revenue sources are the iPhone
• Apple sells smartphones, personal computers, tablets, wearables and accessories,
and services.
• iPhones are Apple's biggest source of revenue by product, and the Americas is
the largest revenue generator among its geographic regions.
• Apple's services business generates the highest gross margins.
Key Resources
Key Resources is the building block describing the most important assets needed to make a
business model work. Every business model requires them, and it is only through them that
companies generate Value Propositions and Revenues. Key resources can be physical,
financial, intellectual, or human.

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Research paper © 2012 IJFANS. All Rights Reserved, UGC CARE Listed (Group -I) Journal Volume 8, Issue 4, 2019

Cost Struture
Cost structure is the aggregate of the various types of costs, fixed and variable, that make up
a business' overall expenses. Companies use cost structure to set pricing and identify areas
where expenses can be reduced.Apple spends a lot on the manufacturing of its goods, but
crucially invests heavily in every aspect of the design, quality control and product testing
stages as well. They operate on a premium pricing strategy which means they also must
expend substantial resources in marketing and maintaining their brand image.
The cost structure implemented for Apple Inc., varies in accordance to product portfolio. The
company bots, prices aggressively dependent on the premium value propositions it attains for
its core products. The example of its core products are iPhone, Mac, iPad, iPod and so forth.

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Research paper © 2012 IJFANS. All Rights Reserved, UGC CARE Listed (Group -I) Journal Volume 8, Issue 4, 2019

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