Government College University, FSD

Faculty of Management Sciences

Department of Business Administration

Course Title:
Strategic Management

Assignment Topic:

Apple Tows Matrix Analysis

Class:
MBA 7th (Morning)

Prepared For:

Dr. Mosin Bashir

Prepared By:

Sohail Rasheed (7259)

Apple’s

1.0 Company Profile:

1.1.0 Introduction:

Name Apple, Inc.

Logo

Industries Computer hardware, Computer software, Consumer electronics, Digital

served distribution
Geographic
Worldwide
areas served
Headquarters U.S.
Current CEO Tim Cook
Revenue $ 156.508 billion (2012)
Profit $ 41.733 billion (2012)
Employees 72,800 (2012)
Samsung Electronics Co., Ltd., Amazon.com, Inc., International Business Machines
Main Corporation, Cisco Systems, Inc., Google Inc., Microsoft Corporation, Dell Inc., LG
Competitors Electronics, Lenovo Group Limited, Hewlett-Packard Company, Sony Corporation
and many other companies.

Apple Inc. is an American multinational corporation, which designs, manufactures and sells
personal computers, consumer electronics and software, and provides related services. The
business has experienced a tremendous growth from 2001 when it has introduced its iPod mp3
player. Apple Inc. is considered to be the most successful electronics company in the world.

1.1.1 Vision Statement

"Man is the creator of change in this world. As such he should be above systems and
structures, and not subordinate to them."

1.1.2 Mission Statement

“Apple designs Macs, the best personal computers in the world, along with OS X, I Life,
iWork, and professional software. Apple leads the digital music revolution with its iPods and
iTunes online store. Apple reinvented the mobile phone with its revolutionary iPhone and
App Store, and has recently introduced its magical iPad which is defining the future of
mobile media and computing devices.”

1.1.0 Products:
Apple’s Most Successful Products and Services;
iPhone 4, iPad & iPad 2, iPhone, iTunes, PowerBook G4, iPod, OS X, iMac, Quick time, Mac,
Apple II.
PRODUCTS and SERVICES;
Apple Store, Mac, iPod, iPhone, iPad, iTunes.
Other Products and Services;
Desktops, Xserve and Notebooks
 2.0 SWOT Analysis:

Apple’s SWOT analysis provides us the real picture of its business in the world, and it also helps to
formulates strategies for Apple’s business strategies.

2.1.0 Strengths:
Following are some strength of Apple’s;
 Customer loyalty combined with expanding closed ecosystem
 Apple is a leading innovator in mobile device technology
 Strong financial performance ($10,000,000,000 cash, gross profit margin 43.9% and no
debt)
 Brand reputation
 Retail stores
 Strong marketing and advertising teams

2.2.0 Weaknesses:
Following are some Weaknesses of Apple’s;
 High price
 Incompatibility with different OS
 Decreasing market share
 Defects of new products
 Lack of own production unit

2.3.0 Opportunities:
Following are some opportunities for Apple’s;
 High demand of iPad mini and iPhone 5
 I-TV launch
 Growth of tablet and smartphone markets
 Strong growth of mobile advertising market
 Increasing demand for cloud based services
 Strong R&D department

2.4.0 Threats:
 Rapid technological changes
 Price pressure from Samsung over key components
 Android OS growth (10 million devices being activated at Android)
 Highly Competitive Market
 Outsourcing Difficulties
 Imitation of Apple products
3.0 Strategy Formulation:

3.1.0 SWOT Matrix:

Strengths: Weaknesses:

S1: Customer loyalty W1: High price

combined with expanding W2: Incompatibility with different
closed ecosystem OS
S2: Apple is a leading W3: Decreasing market share
innovator in mobile device W4: Defects of new products
External technology W5: Lack of own production unit
Scanning S3: Strong financial
Internal performance
Assessment ($10,000,000,000 cash, gross
profit margin 43.9% and no
debt)
S4: Brand reputation
S5: Retail stores
S6: Strong marketing and
advertising teams

Opportunities: *SO-Strategy: *WO-Strategy:

(Growth/aggressive Strategy) (Internal Fit It/Moderate Strategy)
O1: High demand of iPad
mini and iPhone 5  Introduce new products  Develop better relationship
O2: i-TV launch (S1,S2-O1) with producers for ensuring
O3: Growth of tablet and  Focus on heavy smooth supply of products.
smart phone markets advertisement (S6-O2) (W1,W5-O1,O3,O6,)
O4: Strong growth of  Start Partnership with  Aggressively continue to pursue
mobile advertising market education institutions to R&D product development
O5: Increasing demand for increase sale (W2,W4-O6)
cloud based services volume(S2,S4-O3,O5)  Continue to develop superior
O6: Strong R&D department  Capitalize on the smart- product(s) at lower cost point
phone revolution (W1-O1,O3,O5)
(S2,S3,S4-O1,O5)
 Continue to aggressively
develop new mobile app
(S2,S3-O3,O6)

Threats: *ST-Strategy: *WT-Strategy:

T1: Rapid technological (Defensive+ Aggressive) (Defensive Strategy)
changes  Aggressively pursue new  Introduce high tech products at
T2: Price pressure from product development i.e.; competitive price (W1,W3,-
Samsung over key wearable & pen computing T1,T2,T4)
components S6-T4  Try to remove technical
T3: Android OS growth (1  Strengthen partnerships problem by ensuring quality
million devices being with band width vendors standards/elements(W4,-T6,)
activated at Android daily) i.e.; international market  Focus introducing new user
T4: Highly Competitive S1-T1-T2 friendly apps (W2-T3)
Market  Evaluate niche market
T5: Outsourcing concentration S12-T1,T2
Difficulties  Equal Backward/FWD
T6: Imitation of Apple Integration (S9:T3)
products
3.2.0 TOWS Matrix:

3.2.1 Internal Factor Evaluation:

All organizations have strengths and weaknesses in the functional areas of business. No enterprise
is equally strong or weak in all areas.

Internal Factors Weights Ranking Weighted

(Industry) (Company) Scores
Strengths
Customer loyalty combined with expanding closed 0.12 4 0.48
ecosystem
Apple is a leading innovator in mobile device 0.05 3 0.15
technology
Strong financial performance ($10,000,000,000 0.12 4 0.48
cash, gross profit margin 43.9% and no debt)
Brand reputation 0.11 3 0.33
Retail stores 0.09 4 0.36
Weakness
High price 0.10 2 0.20
Incompatibility with different OS 0.04 1 0.04
Decreasing market share 0.12 1 0.12
Defects of new products 0.08 1 0.08
Lack of own production unit 0.05 3 0.15
Total 1.0 3.14

3.2.1.1: Comments:

The weighted average score of internal factor evaluation matrix is 3.14, where average score is
2.5(minimum acceptable score), which shows that company internally performs well by using its
strength and overcoming weaknesses. But there is still need to maximize strength factors as well as
eliminate weaknesses to compete the in the market.
3.2.2 External Factor Evaluation:

An External Factor Evaluation (EFE) Matrix allows strategists to summarize and evaluate economic,
social, cultural, demographic, environmental, political, governmental, legal, technological, and
competitive information.

External Factors Weights Ranking Weighted

(Industry) (Company) Scores
Opportunities
High demand of iPad mini and iPhone 5 0.10 4 0.40
I-TV launch 0.12 2 0.24
Growth of tablet and smartphone markets 0.08 2 0.16
Strong growth of mobile advertising market 0.12 4 0.48
Increasing demand for cloud based services 0.06 4 024
Threats
Rapid technological changes 0.10 1 0.10
Price pressure from Samsung over key components 0.04 1 0.04
Android OS growth (10 million devices being 0.10 2 0.20
activated at Android)
Highly Competitive Market 0.06 1 0.06
Outsourcing Difficulties 0.12 4 0.48
Imitation of Apple products 0.10 1 0.10
Total 1.0 2.98

3.2.2.1 Comments

The weighted average score of external factor evaluation matrix is 2.98, where average score is
2.5(minimum acceptable score), which shows that company externally performs above average
level by capturing opportunities and avoiding from threats. But there is still need that Apple Co.
must adopt aggressive growth strategies to maintain its current market position and capturing
more market shares.