Bacani, Cateleen R.

BSA III - Diligence

Manalang, Kimjoy L. Internal Assessment

“APPLE INC.”
Apple Inc., which was established in 1977 by college dropouts Stave Jobs and

Steve Wozniak in Cupertino, California, is an American multinational company that

designs, produces, and markets mobile communication and media devices, personal

computers, and portable digital music players, as well as a variety of related apps,

services, accessories, networking solutions, and high-quality third-party digital content

and applications. In existing, Apple retail footprint has expanded to 510 stores across 25

countries worldwide. Apple Inc. is also one of the world's most valuable firms in terms of

market capitalization and the most valuable technology firm in terms of top-notch

excellence, productivity, innovation, simplicity, consistency, secrecy, and moderate

combativeness. Apple remain competitive in terms of delivering the best quality products

and services that maintain trust among the consumers. The company's target market

includes students, executives, managers, and professionals who are wealthier, more

educated, and motivated by technology. It now has millions of customers worldwide

visiting its retail stores especially in shopping malls. As long as they keep innovating,
Bacani, Cateleen R. BSA III - Diligence
Manalang, Kimjoy L. Internal Assessment
there will be increased demand for their products and services, which will lead to

increased pricing power, expanded profit margins, and improved cash flows, all of which

will lead to a higher stock price in the long run and enable the firm to return capital to its

shareholders. Apple Inc. set new records for sales in iPhone, Wearables, and Services in

the last month of 2020, with 111.4 billion dollars, up 21 percent year over year and

accounting for up to 35 percent of their quarterly earnings per diluted share of 1.68

dollars. Through reported sales, they can produce a record of 38.8 billion dollars in

operating cash flow and have returned over 30 billion dollars to their shareholders,

retaining their target net cash. This would not have been possible without the Apple

team's tireless and creative efforts. As a result, they were inspired by the positive

customer response and concentrated on how they could assist the communities in which

they play a role. The quality of Apple Inc.'s internal control in the area of financial results

is obviously the responsibility of the company's management. They typically performed

in such a way that they could be reasonably certain that their internal evaluation was

effective.
Bacani, Cateleen R. BSA III - Diligence
Manalang, Kimjoy L. Internal Assessment

Brief Background of Apple Inc.

Apple Inc., formerly Apple Computer Inc., is an American multinational

corporation based in Cupertino, California, and founded in 1977 by Steve Jobs, Mike

Markkula, and Steve Wozniak. The company designs manufacture and sell hardware like

the iPhone and iPad, as well as software like Mac OS X, personal computers like the

MacBook, and portable music players like the iPod. By market value, Apple is the

world's largest publicly traded and technology company in the world. Apple Inc. has

pioneered its way through the computer industry—not once, but multiple times

throughout its existence. It believes in pushing the limits of creativity in order to produce

interesting and valuable products for society. After more than 30 years, it is undeniable

that Apple has had a profound impact on technology, innovating and influencing not only

how we use computers but the activities for which we use them. In the last three years,

Apple had reached the total number of full-time employees around 147 thousand, and

maintains 510 retails stores in 25 countries worldwide with the total around net sales

amounted to 2274.52 billion US dollars in the annual financial year. The company's

competitive advantage is its ability to develop innovative products which minimize risk

timescale and enabling the company to stay ahead of competitors including Samsung.

Apple Inc. items are bought to key customers such as small and medium-sized

businesses, government departments, schools, and even average citizens who can afford

it. Apple Inc. is still the most successful corporation in this world.
Bacani, Cateleen R. BSA III - Diligence
Manalang, Kimjoy L. Internal Assessment

10 Strengths of Apple Inc.

Brand Identity

 Apple Inc.'s brand identity remains one of its strongest assets. Their logo, design,

simplicity, and ingenuity are expressed in all of their products. The idea is

revealed in Apple's iPod touch advertisements, which are simple yet colorful.

Apple is a well-known brand all over the world. Apple Inc. has a dedicated

consumer base, but any product affiliated with the brand is often pre-ordered.

Furthermore, Apple promotes a creative and elegant style through its brand. This

is the marketing technique they use to sell their goods as gateways into their

carefully crafted culture, rather than as simple gadgets. As a result, Apple's gross

margins are consistently high for each new device they bring to the market.

Innovative Products

 Apple Inc. has already been known for its ability to create innovative products.

Apple has continued to introduce high-quality items into the industry one after the

other since its launch. It started with the MacBook, followed by the iPod, iPhone,

iPad, and iWatch. In a nutshell, Apple Inc. now has everything that a consumer

might want.

Loyal Customer Base

Bacani, Cateleen R. BSA III - Diligence
Manalang, Kimjoy L. Internal Assessment

 Apple Inc. has already been known for its ability to create innovative products.

Apple has continued to introduce high-quality items into another industry one after

the other since its launch. It started with the MacBook, followed by the iPod,

iPhone, iPad, and iWatch. In a nutshell, Apple Inc. now has everything that a

consumer might want.

Brand Value and Reputation

 After Google, Apple Inc. is regarded as the world's second most successful brand.

Apple's brand worth was $15.98 billion in 2006, but it surpassed $300 billion a

little more than ten years later in 2018. This demonstrates how customers think

about Apple. I'm intrigued as to what it'll be worth in the coming years.

Marketing and Advertising

 Since the days of Steve Jobs, Apple has been recognized as the leader of

advertisement and marketing. Apple promotes by optimization feature about new

updates and merchandise. The marketing process is so effective that it produces a

word-of-mouth campaign that aim to enhance a positive brand image while still

increasing product demand.

Distribution Chain

 Apple Inc. runs 470 retail outlets in 17 countries around the world. It also offers its

goods through trading partners, internet portals, and other high-end distribution

outlets in addition to these shops. Visiting an Apple-owned retail store is a once-

Bacani, Cateleen R. BSA III - Diligence
Manalang, Kimjoy L. Internal Assessment
in-a-lifetime opportunity. In addition, Apple has opened an Apple genius bar

where customers can get help with their problems right in the shop. As a result,

Apple's emphasis on sales and service distribution is nothing short of legendary.

Consumer Focus

 Apple Inc. has always built its offerings with the end user in mind while having

the future in mind. They tend to think about stuff that even the customers haven't

considered. Steve Jobs, the founder of Apple, believes that if you ask a customer

what he or she wants, by the time you send it to them, they will want something

more. This is the theory that has driven Apple to success.

Proficient Research

 Apple Inc. has poured a great deal of time and money into the production of its

products. A detailed analysis is conducted prior to the development of every

product in order to better identify the expectations and preferences of the

consumer.

Brand Equity

 Being a leader necessitates a high degree of brand value. And Apple is one of the

most valuable brands on the planet. Apple's brand worth was reported to be $300.6

billion in 2018.

High-Profit Margins
Bacani, Cateleen R. BSA III - Diligence
Manalang, Kimjoy L. Internal Assessment

 Given that Apple is a technological pioneer with strong market value, it is able to

maintain a high profit margin on its products. This substantial profit are then re-

invested in R&D and brand growth. Furthermore, Apple's pricing strategy

guarantees that costs do not crack into the market, meaning you can buy Apple

goods at the same price in various retail stores.

10 Weaknesses of Apple Inc.

Incompatibility

 Apple's biggest problem is incompatibility, since most of the goods are

incompatible with third-party hardware and apps. As a result, if you purchase an

Apple product, you are submerged in the Apple realm and must stay there. As a

consequence, this has a huge effect on customer decision-making.

Matching Consumer Expectations

 Since the 1980s, Apple has become a leading technology firm. Apple, as the

industry leader, commands a significant share of the market, as well as sky-high

customer aspirations. Year after year, customers demand more from Apple, and

living up to these demands is difficult for everyone, not even Apple.

Dependency on other few products

Bacani, Cateleen R. BSA III - Diligence
Manalang, Kimjoy L. Internal Assessment

 As opposed to the numerous products that its nearest rivals, such as Google and

Microsoft, have, Apple has about 8 products in its portfolio. As a result, Apple's

reliance on each commodity is very strong. As a result, if a product loses, Apple

suffers a 10% loss. Apple has a mutual desire to expand its product portfolio.

Limited Distribution Network

 Because of the company's exclusivity policy, Apple Inc. has a very limited

delivery network. Apple wants to target its registered resellers. The consumer

scope of this exclusivity policy is minimal. Also, with the perks of exclusivity,

such as strict commodity distribution management, this vulnerability remains.

Apple only has a small global delivery network.

Premium Pricing

 Despite Apple's potential to demand higher rates and produce wide profit margins,

price-conscious customers turn to rivals such as Samsung and Dell, which sell

comparable goods at lower prices. Customers in India, China, and Pakistan, for

example, are migrating to Android phones like Samsung because of their

outstanding features and low costs.

Dependence of sales on High-end market segments

 Apple relies primarily on high-end consumer segments to offer its goods due to its

luxury pricing. High-end markets mostly target customers in the middle and

upper-income classes, effectively excluding those in the lower-income brackets

Bacani, Cateleen R. BSA III - Diligence
Manalang, Kimjoy L. Internal Assessment
who can readily buy goods from Apple's rivals, such as Samsung. In general, high-

end consumer segments account for a small portion of the global market.

Lack of competition

 Apple Inc. does not face any competition from its rivals. This is due to the fact that

it hardly advertises its goods. Apple is only mentioned when a new app is being

released or when its applications or items have been updated recently.

Lack of marketing and promotions

 Despite its inconsistent marketing techniques, Apple Inc. is known for its efforts in

building and sustaining a loyal customer base. Apple does not think it is

appropriate to spend additional funds on ads and advertising as a result of its

growth.

Allegations of Tracking

 Apple users' privacy is put at risk as they are followed. Apple has been accused of

installing tracking apps on its phones that showed users' exact positions. Even if

the most recent update of Apple's phones allows consumers the option to opt-out

of tracking, once trust is lost, it is difficult to regain.

Unfair business practices

 After being paid to make Google's search engine the default search engine for its
Safari web browser, Apple is being investigated for unethical market practices.
Bacani, Cateleen R. BSA III - Diligence
Manalang, Kimjoy L. Internal Assessment
Rivals find it impossible to reach and extend into the search engine business due to
collusion between the two conglomerates.

References:

https://bstrategyhub.com/swot-analysis-of-apple-apple-swot/

http://panmore.com/apple-inc-swot-analysis-recommendations

https://strategicmanagementinsight.com/swot-analyses/apple-swot-analysis.html

https://gobigassignmenthelp.com/blog/apple-swot-analysis/

https://en.wikipedia.org/wiki/Apple_Inc.

https://www.apple.com/newsroom/2021/01/apple-reports-first-quarter-results/

https://www.investopedia.com/insights/what-makes-aapl-valuable-company/

https://www.apple.com/newsroom/pdfs/FY21%20Q1%20Consolidated
%20Financial%20Statements.pdf

https://www.macrumors.com/roundup/apple-retail-stores/#:~:text=Apple's
%20retail%20footprint%20has%20since,%2C%20Thailand%2C%20Turkey%2C
%20the%20United
Bacani, Cateleen R. BSA III - Diligence
Manalang, Kimjoy L. Internal Assessment