Have you heard Apple? Not the fruit apple. It is a tech company.
Iphone is a specific product from Apple Inc. There are huge quantity of customers in China. Apple CEO Tim Cook expressed that iPhone market in China grew 75 percentage in every year.
China has already become the largest market except the USA. According to the Apple company report, Apple Inc gained $13.2 billion revenue after they released the huge-screen iPhone6 and iPhone6 plus in China that includes mainland, Hong kong and Taiwan.
How do the Apple Inc achieve this success? The reason will be explained based on SWOT analysis.
What is SWOT analysis?
SWOT tool is a popular approach to analyze a company what environment or occasion it is in. SWOT analysis is an acronym for strengths, weaknesses, opportunities, and threats. It is a structured planning method that aim to assess those four factors of a project or business venture.
The first step that have to be done for SWOT analysis is analyzing external and internal environment of the company. And then base on the external and internal environment to analyze the specific strengths and weakness. In addition, the opportunity and threats that will be faced by company should also be considered.
Apple’s strengths( internal strategic factors):
- High technology and quality products such as iPhone, iPad, iMac
- Globally recognized brand and large quantity loyal customers named “Apple Fans”
- High profit margin
Apple is one of the most valuable and effective brand all over the world. In addition, Apple maintains the high price and quality products strategy. It helps Apple gain more profit. The main reason why Apple can get such huge market share in China is because China huge amount population. Besides that, Apple focus on young customers which prefer new and special products. Thus Apple established their “Apple culture” in order to attract loyal fans. Once these customers are used to using IOS system, they will continue to purchasing Apple’s products.
Apple’s weakness( internal strategic factors):
- High selling price
- limited retail network
- Chinese customers unwilling to pay for download App from iTunes store
High selling price is the most obvious weakness no matter in China or in other countries. Because of its high technology, the price is hardly to reduce. Compared with other brand which produce similar products, Apple lost many customer which would like low price rather than high technology. Moreover, Apple retailer network is limited. This is because of Apple’s policy. It is not convenient for those potential customers. Plus, some apps from iTunes store need download fee. However most Chinese customers are used to choosing free app.
Opportunities for Apple Inc ( external strategic factors):
- penetration into more cities since the demand increase
- dramatic increase Chinese economy and build more retail store
The Apple China faces a very good market environment. Since the government carries out profitably policy and there are a big amount potential customers. Apple Inc should permeate into more cities in China and expand the popularity of their brand at the same time. Because of the present economic policy, Chinese economy continues increasing in recent years. The public have enough demand and money to purchase iPhone, iPad, even iMac. It is a good opportunity to build more retail store that can compete with other competitors.
Threats for Apple Inc ( external strategic factors):
- Highly competitive environment
- Imitation, patent, copyright infringement occurs frequently in China
- High pressure to reduce price
- phone-hacking scandal
In China, production industry developed quickly. Besides Apple and Samsung, there are also many local brands that provide similar products which are much cheaper than Apple’s products. In fact, Apple China faces great challenge since they do not have advantage on price strategy. In addition, because of legal loopholes, imitation, patent and copyright infringement occurs frequently in China. Those products have similar function while in a low price, which may cause Apple lose lots of customers. Thus, reducing price is the popular opinion among customers. Last but not least, in China, staffs of government and some special department are not allowed to use iPhone or iMac since phone-hacking scandal.
To sum up, Apple Inc faces a good time in China now and it gains huge revenue from China market. Apple should keep developing their strengths and catching opportunities to overcome its weakness and threats that they have to face.
- derek4well, Apple in China, retrieved on 25 July 2016.<https://zh.scribd.com/doc/151072503/Apple-in-China-PDF>-Not more information about author and date
- Pickton, DW, & Wright, S 1998, ‘What’s swot in strategic analysis?’, Strategic Change, vol. 7, no. 2, pp. 101-109. retrieved on 25 July 2016.
- Smithson, N 2015, Apple Inc. SWOT Analysis & Recommendations, Panmore Institute, retrieved on 25 July 2016.<http://panmore.com/apple-inc-swot-analysis-recommendations>
- Wikipedia source <https://en.wikipedia.org/wiki/Apple_Inc.>
Produced by White Zhao
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