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 - – wage bills are increasing, there is backlash against globalization, increasing commodity prices, increasing energy prices, increasing inequality as vast percentage of new income is going to the top 1%, digital marketing is dominated by two big players Facebook and Google, central banks are concerned over increasing inflation,
increasing transportation and logistics costs, supply chains are disrupted by pandemic , 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 -
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.
Innovation driven organization
– Apple Watch is one of the most innovative firm in sector. Manager in Apple's Future: Apple Watch, Apple TV, and/or Apple Car? Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Effective Research and Development (R&D)
– Apple Watch has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Apple's Future: Apple Watch, Apple TV, and/or Apple Car? - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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.
Superior customer experience
– The customer experience strategy of Apple Watch in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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.
Sustainable margins compare to other players in Strategy & Execution industry
– Apple's Future: Apple Watch, Apple TV, and/or Apple Car? firm has clearly differentiated products in the market place. This has enabled Apple Watch to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Apple Watch to invest into research and development (R&D) and innovation.
Organizational Resilience of Apple Watch
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Apple Watch does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Cross disciplinary teams
– Horizontal connected teams at the Apple Watch are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in 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.
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.
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.
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 -
Workers concerns about automation
– As automation is fast increasing in the segment, Apple Watch needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
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.
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.
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.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Apple Watch supply chain. Even after few cautionary changes mentioned in the HBR case study - Apple's Future: Apple Watch, Apple TV, and/or Apple Car?, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Apple Watch vulnerable to further global disruptions in South East Asia.
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.
Slow decision making process
– As mentioned earlier in the report, Apple Watch has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Apple Watch even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Products dominated business model
– Even though Apple Watch has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Apple's Future: Apple Watch, Apple TV, and/or Apple Car? should strive to include more intangible value offerings along with its core products and services.
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.
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.
Need for greater diversity
– Apple Watch has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
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.
Buying journey improvements
– Apple Watch can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Apple's Future: Apple Watch, Apple TV, and/or Apple Car? suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Apple Watch in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Better consumer reach
– The expansion of the 5G network will help Apple Watch to increase its market reach. Apple Watch will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Manufacturing automation
– Apple Watch can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
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.
Building a culture of innovation
– managers at Apple Watch can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
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.
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.
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.
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.
Leveraging digital technologies
– Apple Watch can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
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.
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 -
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.
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.
Shortening product life cycle
– it is one of the major threat that Apple Watch is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
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? .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Apple Watch with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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.
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.
Stagnating economy with rate increase
– Apple Watch can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
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 .
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.
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.