Case Study: Apple, Inc.

Case Study: Apple, Inc.

Apple Inc. is a renowned technological company that designs and sells computer software, consumer electronics and provides online services. Some of the company’s hardware products include the iPhone smartphone, the conveyable iPod media player, and the Mac personal computer. Its computer software products include the Safari web browser and multiple iOS operating systems. The iTunes Store and the iOS App Store are some of the major online services provided by the company. The company is claimed to be the best at designing technological hardware and invention of new devices (Johnson et al., 2012). The success of Apple, Inc. is grounded in its inventive strategies which could be heavily borrowed by other technological companies to achieve similar success.

Background

Apple Inc. was founded by three individuals: Steve Jobs, Ron Wayne and Steve Wozniak in 1976. Wayne, however, sold his shares and left the company. Wozniak designed Apple I, Apple’s first computer; it was presented to Hewlett Packard who declined pursuing the venture. The company persevered and developed the Apple II in 1978 which made good sales. Apple went public in 1980, comprising approximately 1000 employees at the time. After a stellar sales performance in 1984 due to production of the Macintosh computer, Apple suffered from a struggle for power among its senior executives which resulted in the departure of Steve Jobs and other senior officials. These sudden developments accelerated the deterioration of the company which endured substantial fiscal losses in the early 1990s (Johnson et al., 2012).

Steve Jobs returned to Apple Inc. in 1997, hired as an advisor after Apple Inc. purchased NeXT, Inc. Shortly after, he took over as the company CEO. His reinstatement marked the beginning of a series of revolutionary inventions by the company. The iMac was unveiled in 1998 and made monumental sales. Apple then later released the iPod in 2001 followed by the iPhone in 2007. The iTunes Store quickly became the leading source of music displacing Wal-Mart off this position. Due to such significant achievements, Jobs was continuously named the best CEO in the world by several famous magazines and analysts (Johnson et al., 2012).

Strengths

It is necessary to evaluate the strengths of Apple which have facilitated the massive success that the company has experienced in its inventive endeavors. Apple is one of the most valuable brands in the world, exclusively contributing to 1.5% of the GDP of the U.S. (Khan et al., 2015). Apple products are highly trusted by a huge portion of the population due to their outstanding quality (Smithson, 2015). The most acclaimed company products are the iPhone and the iPod. The products and services provided by the company are also user-friendly, making them easy for use by the general public. The company, therefore, has a wide market to which it can introduce a new product at any time and be assured of making considerable sales.

Apple is also known for its exceptional pricing strategy which is favorable to consumers while ensuring the maintenance of bountiful profits. Having many diversified products, the company accrues massive revenue and is the company with the greatest value in assets according to Forbes. These revenues are used to fund further innovative strategies for the production of new or more efficient devices and software. This is illustrated by the regular release of new Apple products to the public; each upcoming one is uniquely original and applicable to a new aspect of life (Smithson, 2015). The intent nature of Steve Jobs also made the company recognized as a hub for state-of-the-art inventions. This has contributed to the vast popularity of the company.

Weaknesses

It is also necessary to establish the factors which limit innovation in Apple, Inc. One of Apple’s biggest weaknesses lies in its network of distribution (Smithson, 2015). Apple enforces a rigorous procedure for selection of authorized sellers of its products. Although this strategy gives the company greater control over distribution, it substantially limits the market outreach. This limitation is illustrated in that only 13 countries have direct sales locations for Apple products. Another significant weakness is the company’s overreliance on the iPhone and the iPod, being that they are the leading sources of income for the company. Therefore, if it were to happen that rivaling mobile phone manufacturers invented a product that overtook the iPhone or iPod in popularity, this would substantially affect the sales and consequently, the profitability of the company. Due to the existence of premium pricing, the sale of Apple products is also significantly limited to high-end markets