COMPANY BACKGROUND

In 1976, Apple Inc. was founded by Steve Jobs and Steve Wozniak, who wanted to
make computers that were easier to use. Although the company's profits had
skyrocketed, Apple wasn't widely recognized until 1984, when Jobs and Wozniak
released the Macintosh computer. Since then, the company's investment in R&D and
other forms of innovation has allowed it to supply the market with truly remarkable
products.

In recent years, Apple has been well-known for its digital entertainment devices, which
are used globally. It has launched a variety of entertainment products that have
performed very well. The PC industry is comprised of a multitude of industry participants
and is known as one of the oldest industry participants. Since its arrival, several more
businesses have joined the sector. This has had a massive impact on Apple's market
share due to the increased competition in the industry.

APPLICATION OF ENTRY MODE STRATEGIES IN APPLE

Just like Apple Inc., when a company employs good strategic management, it is more
ready in attaining its long-term and short-term objectives. Apple Inc. has developed
sophisticated ways of strategic management, a reason why the firm has been able to
maintain its previous level of success. In this part, we will be applying the different
strategies to Apple Inc. This includes the SWOT & TOWS Analysis, Internal and
External Factor Evaluation, and Porter’s Five Forces Analysis.

SWOT ANALYSIS

Strengths:

Apple has been the market leader in a range of products and services, and it has a
highly strong brand image: Since the beginning, Apple has been providing quality
products to its customers and clients. For instance, A person who bought an iPhone can
used it for a long period without any internal problems. Through this strong quality
offering, it has developed strong brand recognition.
Financial strength: Its financial is very strong to the point that it can finance all of its
investment and research to develop its product and services. In February 2015, Apple
reported to have a revenue of $74.6 billion and an amount of $18 billion in profits for a
single quarter, which is said to be the highest income in history.

Innovative and highly sophisticated supply chain: For all we can remember, Apple has a
strong foot in the industry fueled solely by technology. The inevitable strength of Apple
has been showering the industry with one after another hit technological goods. It firstly
comes with the MacBook then the iPod, iWatch. To sum things up, Apple has got it
covered when it comes to any desire a man can come up with.

High profit margins: Since people around the world simply adore their products, every
time a new gadget is released people rush to buy it. Recently, Apple has started to sell
its iPods and chargers separately, which has also helped them to maintain higher profit
margins.

Large and loyal customer base: Apple is a worldwide multinational company. It operates
in more than 160 countries across the globe. So, it has a great deal of the global
footprint. This makes it more recognizable to the public and helps with its publicity.

Weakness:

Products not priced competitively: The Apple company’s products can be considered a
luxury due to their premium pricing. If mapapansin nyo, mostly mga middle or high-class
people can afford their products. However, some low-income buyers. although they can
afford Apple products, they are having a hard time buying it.

Narrow product range compared to the rivals: iPhone 1 and iPhone 7 do not have much
difference while it is about their look. It has been developing the same looking iPhones
with updated features, which creates a feeling of using same products years after years.
Oppositely, other manufacturers such as HTC, ASUS, and Samsung are offering
products with unique and attractive looks when it is about smartphones.

Products and services incompatible with the other brands: The incompatibility of their
operating systems with other devices has made it difficult for people to switch to iOS-
based devices because these devices are not user friendly, which requires some time to
get used to it.

Opportunities:

Using green technology: An eco-imperative is becoming more of a driving force within

most companies’ operations. However, Apple has been slow to the starting block in
rolling out eco-friendly initiatives in its processes. The materials that the company
utilizes, as well as the manufacturing process, are yet to change to be more
environmentally responsible.

Innovating of Apple’s Driverless Car/iWatch/Apple TV: Apple is focusing on delivering

self-driving software technology. The demand for autonomous cars is increasing rapidly.
The company has the expertise needed to deliver self-driving car technology rather than
electric cars.

Product diversification: If it makes its product lines broader, it will be able to offer more
products to its customers. Also, they should develop new products or cheaper products
for the middle-class people to grab the markets in developing countries.

Make compatible products: Since most of their products are incompatible with other
brands,especially some of its apps, it would be a big step for the Apple if they would
develop products which could be easily connected to large variety of devices.

Threats:

Increased competition: Increasing competition is a worry for Apple as companies like

Google, Huawei, and Samsung give Apple a tough time with their upcoming
technologically advanced products. Therefore, Apple has to strive hard to remain the
market leader in this challenging scenario.

Rising costs of manufacturing: Considering Apple’s quest to deliver high-end products

at a rate that offers its shareholders the greatest value, it requires its input costs to be
as low as possible and its processes to operate at incredible levels of efficiency. For this
reason, its manufacturing process are outsourced to regions of the world with cheaper
labor. Any fluctuation in the costs of labor, whether driven by exchange rates or human
rights lobbying for example, will negatively impact the company’s profitability.

Jobs’ death a major loss: Investors heavily tied the success of Apple to Steve Jobs and
his departure creates uncertainty for the technology powerhouse. The star power of
Jobs and investor confidence in him helped propel the company to the world's largest
market cap valuation, but that some confidence will now drop the company's stock
price.

Impact of Pandemic: Due to the Coronavirus outbreak, Apple faced significant

disruption in its supply chain. As a result, Apple had to bear heavy losses. One of the
immediate losses which were incurred by Apple was the loss of $100 Billion In the stock
value due to the late launch of the iPhone.

INTERNAL FACTOR EVALUATION

Regardless of whether a key factor is an internal strength or weakness, factors
considered to have the greatest effect on organizational performance should be
assigned the highest weights.
Highest are 0.60 and 0.40, which means that apple is doing best in these fields.
2.78 Weighted Average of Apple Indicates that its internal position is strong, and it was
able to maximize its strengths to improve its weaknesses.
W x R = Weighted Score
Weight must equal to 1.0.
Weight that ranges from 0.0 (not important) to 1.0 (all-important) to each
factor.
range from 1.0 to 4.0 (1 = major weakness, 2 = minor weakness, 3 = minor strength, 4 =
major strength).

EXTERNAL FACTOR EVALUATION

Weight that ranges from 0.0 (not important) to 1.0 (very important).
Opportunities often receive higher weights than threats, but threats can receive high
weights if they are especially severe or threatening.
Weights assigned to the factors must equal 1.0.
range from 1.0 to 4.0 (1 = poor response, 2 = average response, 3 = above average
response, 4 = superior response).
3.24 weighted average indicates that an organization is responding in an outstanding
way to existing opportunities and threats in its industry.

PORTER'S FIVE FORCES OF ANALYSIS

1. Industry Competition: The comparatively cheap switching cost is one factor that
makes the market so competitive. A user may go from an Apple iPad to an Amazon
Kindle or tablet PC without making a significant financial commitment. Apple has mostly
coped with the danger of market rivalry by continuously inventing new and distinctive
goods to grow and solidify its market dominance.

2. Bargaining Power of Buyers: Apple counteracts this formidable power by investing

heavily in R&D, allowing it to continue inventing innovative products such as the
AirPods and the Apple Watch, and fostering tremendous brand loyalty. Apple has
established a significant client base that, for the most part, would not contemplate
ditching its iPhones for a competing smartphone.

3. Threats of New Entrants: The second challenge is building brand awareness in an

industry where companies like Apple, Google, and Amazon already have strong brand
awareness. Even though it's possible that a new company, like a Chinese company
backed by the government, could eventually challenge Apple's position in the industry,
it's unlikely that this will happen soon. Still, Apple needs to keep strengthening its
competitive position by developing new products and building brand loyalty. This will
make it harder for new companies to get into the market.

4. Bargaining Power of Suppliers: Apple doesn't have to pay much to switch from one
supplier to another, so this isn't a big problem. Also, Apple is a big customer for most
companies that make its parts, so those companies don't want to risk losing Apple's
business. This makes it easier for Apple to negotiate with suppliers and more
challenging for them to do so. Neither Apple nor its main competitors pay much
attention to how much power their suppliers have in negotiations.
5. Threat of Subtitutes: Apple's market force isn't too strong because most potential
substitute products can't do as much as Apple's products. For example, a landline
phone can only make phone calls, but an iPhone can do much more.