Apple's Future: Apple Watch, Apple TV, and/or Apple Car? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Apple's Future: Apple Watch, Apple TV, and/or Apple Car?
In 2015, Apple CEO Tim Cook knew that Apple, despite its phenomenal success, needed to continue to innovate in new product areas in order to continue its momentum into the future. This case explores three new (actual or potential) product offerings from Apple: the Apple Watch, Apple TV, and the Apple Car. All three categories represented significant opportunities and challenges. The smartwatch category was new and poised for growth when Apple released its Watch in April 2015, but the use case remained uncertain, and Apple would face a strong challenge from Android-based competitors. The television industry, facing growing dissatisfaction with traditional cable packages and the rise of online streaming, was ripe for disruption, but would Apple be able to build a competitive offering? The automotive industry, with the rise of electric cars and autonomous driving technology, was also on the cusp of significant changes, but the engineering and economic challenges of the industry made any move into that space a risky bet.
Swot Analysis of "Apple's Future: Apple Watch, Apple TV, and/or Apple Car?" written by David B. Yoffie, Eric Baldwin includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Apple Watch facing as an external strategic factors. Some of the topics covered in Apple's Future: Apple Watch, Apple TV, and/or Apple Car? case study are - Strategic Management Strategies, Growth strategy, Innovation, IT and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Apple's Future: Apple Watch, Apple TV, and/or Apple Car? casestudy better are - – technology disruption, increasing household debt because of falling income levels, there is increasing trade war between United States & China, customer relationship management is fast transforming because of increasing concerns over data privacy, geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google, cloud computing is disrupting traditional business models,
supply chains are disrupted by pandemic , central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Apple's Future: Apple Watch, Apple TV, and/or Apple Car?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Apple's Future: Apple Watch, Apple TV, and/or Apple Car? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Apple Watch, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Apple Watch operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Apple's Future: Apple Watch, Apple TV, and/or Apple Car? can be done for the following purposes –
1. Strategic planning using facts provided in Apple's Future: Apple Watch, Apple TV, and/or Apple Car? case study
2. Improving business portfolio management of Apple Watch
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Apple Watch
Strengths Apple's Future: Apple Watch, Apple TV, and/or Apple Car? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Apple Watch in Apple's Future: Apple Watch, Apple TV, and/or Apple Car? Harvard Business Review case study are -
Diverse revenue streams
– Apple Watch is present in almost all the verticals within the industry. This has provided firm in Apple's Future: Apple Watch, Apple TV, and/or Apple Car? case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Learning organization
- Apple Watch is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Apple Watch is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Apple's Future: Apple Watch, Apple TV, and/or Apple Car? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Apple Watch has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Apple Watch has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
High switching costs
– The high switching costs that Apple Watch has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Highly skilled collaborators
– Apple Watch has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Apple's Future: Apple Watch, Apple TV, and/or Apple Car? HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Apple Watch has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Apple Watch to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Strategy & Execution field
– Apple Watch is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Apple Watch in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Apple Watch in the sector have low bargaining power. Apple's Future: Apple Watch, Apple TV, and/or Apple Car? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Apple Watch to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Apple Watch is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by David B. Yoffie, Eric Baldwin can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Ability to recruit top talent
– Apple Watch is one of the leading recruiters in the industry. Managers in the Apple's Future: Apple Watch, Apple TV, and/or Apple Car? are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Training and development
– Apple Watch has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Apple's Future: Apple Watch, Apple TV, and/or Apple Car? Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Operational resilience
– The operational resilience strategy in the Apple's Future: Apple Watch, Apple TV, and/or Apple Car? Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Weaknesses Apple's Future: Apple Watch, Apple TV, and/or Apple Car? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Apple's Future: Apple Watch, Apple TV, and/or Apple Car? are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Apple Watch is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Apple's Future: Apple Watch, Apple TV, and/or Apple Car? can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Apple's Future: Apple Watch, Apple TV, and/or Apple Car?, in the dynamic environment Apple Watch has struggled to respond to the nimble upstart competition. Apple Watch has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Low market penetration in new markets
– Outside its home market of Apple Watch, firm in the HBR case study Apple's Future: Apple Watch, Apple TV, and/or Apple Car? needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Lack of clear differentiation of Apple Watch products
– To increase the profitability and margins on the products, Apple Watch needs to provide more differentiated products than what it is currently offering in the marketplace.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Apple's Future: Apple Watch, Apple TV, and/or Apple Car?, it seems that the employees of Apple Watch don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Interest costs
– Compare to the competition, Apple Watch has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Capital Spending Reduction
– Even during the low interest decade, Apple Watch has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Apple's Future: Apple Watch, Apple TV, and/or Apple Car? HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Apple Watch has relatively successful track record of launching new products.
No frontier risks strategy
– After analyzing the HBR case study Apple's Future: Apple Watch, Apple TV, and/or Apple Car?, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
High cash cycle compare to competitors
Apple Watch has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Increasing silos among functional specialists
– The organizational structure of Apple Watch is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Apple Watch needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Apple Watch to focus more on services rather than just following the product oriented approach.
Opportunities Apple's Future: Apple Watch, Apple TV, and/or Apple Car? | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Apple's Future: Apple Watch, Apple TV, and/or Apple Car? are -
Creating value in data economy
– The success of analytics program of Apple Watch has opened avenues for new revenue streams for the organization in the industry. This can help Apple Watch to build a more holistic ecosystem as suggested in the Apple's Future: Apple Watch, Apple TV, and/or Apple Car? case study. Apple Watch can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Apple Watch has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Apple's Future: Apple Watch, Apple TV, and/or Apple Car? - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Apple Watch to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for Apple Watch to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Apple Watch can use these opportunities to build new business models that can help the communities that Apple Watch operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Apple Watch to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Apple Watch is facing challenges because of the dominance of functional experts in the organization. Apple's Future: Apple Watch, Apple TV, and/or Apple Car? case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Apple Watch to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Apple Watch to hire the very best people irrespective of their geographical location.
Loyalty marketing
– Apple Watch has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Developing new processes and practices
– Apple Watch can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Apple Watch can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Apple Watch can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Apple Watch can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Apple Watch can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Apple Watch can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Apple's Future: Apple Watch, Apple TV, and/or Apple Car? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Apple's Future: Apple Watch, Apple TV, and/or Apple Car? are -
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Apple Watch business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Apple Watch high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Apple Watch needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Apple Watch can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Apple's Future: Apple Watch, Apple TV, and/or Apple Car? .
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Apple Watch.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Apple Watch will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Environmental challenges
– Apple Watch needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Apple Watch can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Technology acceleration in Forth Industrial Revolution
– Apple Watch has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Apple Watch needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Apple Watch in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Regulatory challenges
– Apple Watch needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Apple's Future: Apple Watch, Apple TV, and/or Apple Car?, Apple Watch may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Apple Watch in the Strategy & Execution sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Apple's Future: Apple Watch, Apple TV, and/or Apple Car? Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Apple's Future: Apple Watch, Apple TV, and/or Apple Car? needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Apple's Future: Apple Watch, Apple TV, and/or Apple Car? is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Apple's Future: Apple Watch, Apple TV, and/or Apple Car? is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Apple's Future: Apple Watch, Apple TV, and/or Apple Car? is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Apple Watch needs to make to build a sustainable competitive advantage.