Professional Documents
Culture Documents
Introduction
support for such leadership. Apple’s organizational culture is a key factor in the company’s
success. A company’s organizational culture determines capabilities in supporting changes, new
policies, and new strategies. In Apple’s case, employees are effectively developed and integrated
into an organizational culture that facilitates rapid innovation.
Apple’s organizational structure enables the firm to continue innovating rapidly. The creation
of new products like Apple Watch is linked to the support from the firm’s organizational
structure. The following are the most significant characteristics of Apple’s organizational
structure:
1. Spoke-and-wheel hierarchy
2. Function-based grouping
3. Product-based grouping
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Function-Based Grouping: The upper tier of Apple’s organizational structure has function-
based grouping, which is an element derived from the functional type of organizational structure.
Each senior vice president who reports to Tim Cook handles a business function. For example,
Apple has an SVP for industrial design, an SVP for marketing, and another SVP for retail. In this
aspect of the organizational structure, Apple’s top leaders address business needs in terms of
function areas.
Product-Based Grouping: The lower tier of Apple’s organizational structure has product-based
grouping, which is an element derived from the divisional type of organizational structure.
Below the senior vice presidents, there are many vice presidents for different outputs or products.
For example, Apple has a VP for iOS apps, a VP for iPad, and another VP for consumer apps.
This aspect of the organizational structure enables Apple to address specific products or product
components.
An organization’s strengths like Apple Inc are internal characteristics that can give it an
advantage over competitors. Evaluating organizational strengths usually involve assessing
current management, resources, manpower and marketing objectives. Generally, theinternal
analysis examines an organization’s available resources and core competencies. Determining the
organization’s capabilities helps its leaders make long-term plans and sound decisions. Other
factors included in an internal analysis include taking a look at the organization’s financial goals
and strategicplanning initiatives, in addition to its exceptional strengths. Offering high-quality
products or services, building a solid reputation, maintaining strong financial health and
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investing in new technologies are some of the strong points an organization can focus on
developing in order to improve its position within an industry. Efficient delivery of products or
services and providing excellence of customer service are other positive factors.This aspect of
Apple’s SWOT analysis identifies the biggest strengths that 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 valuable and strongest brands in the world. This part of the
SWOT analysis shows that the company is capable of introducing profitable new products by
virtue of its strong brand image. In addition, Apple maintains its premium pricing strategy,
which comes with high-profit margins. This is a major strength because it creates flexibility for
the firm to adjust prices while ensuring significant profits. Also, Apple is known for rapid
innovation based on the company’s intensive growth strategies. Rapid innovation enables the
firm to keep abreast with the latest technologies to ensure competitive advantage. Based on this
dimension of Apple’s SWOT analysis, the company’s strengths are difficult to compete with,
thereby supporting the firm’s continued leadership in the industry. Apple is also known for its
loyalty to their customers and the diversity in their product.
develop other more appropriate alternatives in their strategicplanning objectives when operations
fail to perform as projected. Weaknesses may include poor leadership, low employee morale,
weak financials, low cash flow, outdated technology and inefficient organizational functions or
processes. One example of converting a weakness into a strength might be how an organization
that lacks adequate financial resources works to control costs in order to develop a more
competitive advantage. In this aspect of Apple’s SWOT analysis, the emphasis is on the
weaknesses or inadequacies of the company. Weaknesses can serve as obstacles to business
growth. In Apple’s case, the following organizational weaknesses are the most notable:
4. Very proprietary and controlling. Apple does not open the operating system to
outsiders to develop hardware to work with the products, keeping hardware sales to itself. While
this keeps design control inside and up to standards, it has hurt wide adaptation of its hardware,
especially computers, where it has a relatively small market share.
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. This part of
Apple’s SWOT analysis shows that such an exclusive strategy supports control over the
distribution of products, but limits the company’s market reach. In addition, because of the
premium pricing strategy, Apple has the weakness of having most of its sales revenues from the
high-end market. This market is composed of customers from the middle and upper classes.
Customers from the lower class, which represents the majority of buyers in the global market,
are unable to purchase Apple products because of the relatively high prices. Thus, based on this
dimension of Apple’s SWOT analysis, the company’s pricing and distribution strategies impose
limitations or weaknesses in the business.
In general, external organizational analysis weighs the potential opportunities and threats
that are present outside of the organization. The external analysis may include market analysis,
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sizing up the competition and evaluating the impact of new technological advances. When
assessing opportunities in the external environment, organizations must set out to identify current
market and industry trends, potential niche markets and the weaknesses of major competitors. An
organization should also consider recent developments in technology as vehicles of opportunity.
Innovation is a key to creating new opportunities; therefore, an organization that succeeds in
setting itself apart from others has the chance to develop a strong competitive position in the
industry. In order to achieve this success, an organization must offer something different that its
chief competitors are unable to provide something better than the standard. This aspect of
Apple’s SWOT analysis pinpoints the most significant opportunities that the company can
exploit. Opportunities 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. This part of Apple’s
SWOT analysis emphasizes the need for the company to change its distribution strategy. An
expanded distribution network can help the firm reach more customers in the global market.
Also, Apple has the opportunity to explore new product lines. Its current product lines are highly
successful. Through further innovation, Apple can introduce new product lines, like what the
firm has already done with the Apple Watch. Developing new product lines can support the
company’s growth. Thus, this dimension of Apple’s SWOT analysis indicates that the company
has major opportunities for further growth despite aggressive competition.
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External risks aren’t always bad for an organization. For example, the labor market can
pose either a potential threat or an opportunity depending on the state of the local, national and
global economies. Legislation and government regulation are other factors that can have an
effect on how well an organization performs. Whatever the case, the goal of an organization
striving to succeed is to reduce the impact of external threats and work on improving its internal
weaknesses. Organizations must be able to adapt and keep pace with the constant changes that
occur in the environment outside of the organization. In this aspect of Apple’s SWOT analysis,
the focus is on the threats from various sources, such as competitors. Threats can limit or reduce
the financial performance of companies. In Apple’s case, the following threats are the most
significant:
1. Aggressive competition from other companies like Microsoft, Sony, Dell, Toshiba, HP
and IBM is now making it difficult for Apple to enjoy monopoly and market dominance.
2. Imitation: some firms are now producing the same type of product like apple. A very
good example is Samsung. It is almost impossible to differentiate the best product
between Samsung S7 and iPhone 6plus.
3. Rising labor cost in countries where Apple plants are located
Tough competition in the industry is partly because of the aggressiveness of firms. Apple
competes with firms like Samsung, which also uses rapid innovation. This part of Apple’s
SWOT analysis highlights the limiting effect of aggressive competition. Because of the
aggressive behaviors of competing firms, it is necessary to have strong fundamentals for
maintaining a competitive advantage. In addition, Apple faces the threat of imitation. This threat
is significant because of a large number of firms that can easily imitate Apple’s products. Some
local and regional firms could partially imitate Apple’s product design. Moreover, rising labor
costs in Apple plants, such as in China, can reduce profit margins or push selling prices even
higher. Based on this dimension of Apple’s SWOT analysis, the company’s performance could
suffer because of aggressive competition and imitation of product design. Thus, Apple must take
appropriate action to prevent or overcome these threats.
Apple’s SWOT analysis indicates that the company possesses major strengths that can be
used to effectively address organizational weaknesses. The company can also use these strengths
to exploit the opportunity to expand its distribution network. In addition, Apple can use its strong
brand image and rapid innovation processes to successfully develop and launch new product
lines. However, the firm faces the significant threats of aggressive competition and imitation,
which are major challenges affecting players in the industry. A suitable course of action is to
address these threats through a stronger patent portfolio, along with continuous innovation to
ensure the competitive advantage of Apple products even when competitors try to catch up.