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Ronald Wayne. The company designs and sells consumer electronics, computer software, and personal computers. It has grown from a garage business to the world’s largest publicly traded company by market capitalization. With a 5.2% of the worldwide market, and 13% PC market share, Apple is now growing from a quarter to quarter rate about 22% (Apple 2011). Apple leads, innovates and dominates. However, while the company is celebrating its victory, there’re some critical issues and risks Apple cannot overlook and should pay close attention to. These critical issues can be broken down to changes in the landscape of the industry, rising competition, and management concerns including Apple’s ego, reliance on secrecy and control in operation and loose focus on CSR. The paper will analyze these issues in detail and provide recommendations and risk analysis. Apple has long relied on secrecy and control in its operation. For instance, Apple controls and only allows certain applications into its ecosystem and the company has been notoriously secretive with its future product pipeline. These practices lead to lack of customization, inflexibility and customer disappointment due to Apple product’s recent failure to live up to the amount of hype generated by secrecy. The recommendation to these issues would be for Apple to pursue more transparency in their product management and give their customers more choice. Specifically, Apple should disband the App Review Board, rely less on media events to promote new products and implement an alternative payment system for the iTunes store. Apple in the past has demonstrated its ability to lead and dominate in the market. Being the largest technology company in the world has certainly given Apple some competitive advantages over its rivals, such as huge sales generated by large market share. However, once a small company who fought against giants like IBM and Microsoft, Apple has transformed into the IT titan itself and its ego has considerably grown as well. Many times, Apple takes certain things for granted such as assuming consumer’s preferences in products. Although Apple has been successful with its market projection so far, its achievement in the past does not guarantee its continuous success in the future. To resolve the issue, Apple should be more transparent with its future concept of tech ecosystem and create an atmosphere of customer and employee inclusivity in developing new project. Apple recently has been troubled by its partner Foxconn unethical labor practices scandal. Apple’s loose focus on CSR issue surfaced as the scandal caught global attention. CSR has become more and more important in corporate strategy as consumers nowadays do not buy products solely for its functionality; they also buy a culture and sense of identification. Continuing to ignore CSR will lead to brand image deterioration and eventual market share loss. The recommendation to this will be creating a global foundation that provides free apple products and services to various non-profit or educational outlets in less developed regions in the world.
iPod. it has its weaknesses as well. According to Apple’s 2011 fourth quarter report. and iPad. Apple sold 37million iphones and 15. More than half of Apple’s revenue comes from regions outside the America(Yukari& Rohwedder 2010). Its brand name is globally recognized as well. such as changes in the landscape in the industry and rising competition. thus it creates inconvenience for consumers who want to use software like Microsoft Office suite. Taking these issues and recommendations into account. the company’s earning more than doubled a year ago. Apple will further solidify its leadership status in the industry. Currently. all windows applications cannot work on Mac operating system. Thanks to its strong brand image and global popularity. investors show confidence in the company and Apple shares recently hit the record high above $500 which made Apple the most valuable company in the world. In . Weaknesses: Although Apple is a very successful multinational brand.Store List). With the amount of capital. For example. The company is known for inventing innovative and high-tech quality products like iPhone. Apple has large flexibility when it comes to expanding and investing businesses. Apple is named as one of the 50 most innovative companies in 2012(Technology Review).4 million ipads in the fourth quarter (Apple 2011). Apple has shown consistently robust financial performance in the past years. Strengths: One of Apple’s biggest strength is its strong brand image. One of which is its rigid operating system with limited software support that drives customer to competitors. Based on the technology review published by Massachusetts Institute of Technology. Apple operates more than 300 retail outlets worldwide and has online shops used for selling products overseas (Apple Retail Store .Some other issues are also challenging Apple’s current market position. In return.
com would allow Apple to expand its business in cloud computing . Cook is more candid about certain aspect of the company. Usually. Although the arrangements substantially cut down Apple’s operating expenses. Opportunity: Tim Cook took over as Apple’s CEO in August. The second weakness is that Apple relies heavily on outsourcing. If Apple’s major partners withdraw from the agreement. Based on Apple’s 2011 annual report. Unlike Steve Jobs who thinks he knows all the answer and unwilling to share with the general public. For instance. Apple’s operation will be interrupted and huge loss will be incurred. for example. the most suitable hardware for Mac OS would be apple computers. All of Apple’s manufacturing is performed by a few outsourcing partners primarily in Asia (Apple 2011). Tim Cook is more transparent with the public about the company’s plans as well. the expansion plan for iPhone. purchasing Salesforce. Tim Cook is likely to continue making changes in Apple’s culture and environment and bring in opportunities for this IT giant. they also reduce the company’s direct control over the operation and production and put the company in a vulnerable position to any changes made by the partners. Cook has already been making some modifications since his take over. With this enormous amount of cash. Apple will be able to embrace all possibilities. the company currently has nearly $100 billion cash on reserve (Apple 2011).addition. Apple can take on a more aggressive approach with acquisition and expand the company into new markets more quickly. users do not have plenty of choice if they want to switch to desired hardware when using Mac operating system. Apple can also invest the money in research and development to invent new products and create new market segment. . which opened the door to changes in Apple.
the intellectual property claims against it have increased (Apple 2011). The litigation is usually costly and time-consuming which drastically negatively affects the company’s operation.Threat: Apple runs in a fast changing and competitive industry. Apple’s recent scandal with its partner Foxconn’s unethical labor practice has jeopardized the company’s reputation. . and Samsung. Google. For instance. Technology companies frequently enter into the litigation based on allegations of patent infringement. etc. Apple will lose its market share to competitors like Microsoft. As the company has expanded. Failing to keep up with technology innovation. and many consumers lost confidence in the company and threaten to boycott the company’s product if the issue is not resolved properly. The company is also facing various problems in developing countries such as: government regulation and political instability. Apple has lost some market share to Google Android due to the operating system’s ability to support more applications. Apple’s long troubling paten issue is another threat to the company.
2011.Store List. Yukari . online. 2012). Apple. Annual Report.apple. The report also talks about some of the company’s risks including its reliance on outsourcing and patent litigation. and Cecilie Rohwedder" Apple Strives for Global Markets. It shows that Apple current has more than 300 retail stores worldwide.. This article talks about Apple's market development overseas. Print. 2012). California: Apple Inc.It mentioned that more than half of Apple's revenue are generated in these regions." Wall Street Journal. The competition Apple faces in foreign market and its position in these markets. http://www. "TR50 2012 . I was able to find the company’s sales figure and cash reserves. "Apple Retail Store . In the report.Annotated bibliogrpahy Kane.com/retail/storelist/ The page lists all the Apple stores operated worldwide." Apple.technologyreview. ." Technology Review: The Authority on the Future of Technology. (accessed February 29. Apple’s annual report talks about its financial performance in the year of 2011. Apple is listed as one of the 50 most innovative companies.com/tr50/2012/.wsj. This article listed the 50 most innovative companies in 2012. http://www.Technology Review. The article explained some of the criterias that are taken into account when ranking these companies.com/article/SB10001424052748703302604575294530119152528.html+&cd=1&hl=e n&ct=clnk&gl=us (accessed February 29.
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