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 - – increasing inequality as vast percentage of new income is going to the top 1%, increasing energy prices, challanges to central banks by blockchain based private currencies, increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google, increasing household debt because of falling income levels, central banks are concerned over increasing inflation,
supply chains are disrupted by pandemic , there is backlash against globalization, 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 -
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.
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.
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 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.
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.
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.
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.
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.
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.
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.
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 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.
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 -
Aligning sales with marketing
– It come across in the case study Apple's Future: Apple Watch, Apple TV, and/or Apple Car? that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Apple's Future: Apple Watch, Apple TV, and/or Apple Car? can leverage the sales team experience to cultivate customer relationships as Apple Watch is planning to shift buying processes online.
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.
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.
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.
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.
High operating costs
– Compare to the competitors, firm in the HBR case study Apple's Future: Apple Watch, Apple TV, and/or Apple Car? has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Apple Watch 's lucrative customers.
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.
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.
High bargaining power of channel partners
– Because of the regulatory requirements, David B. Yoffie, Eric Baldwin suggests that, Apple Watch is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Apple's Future: Apple Watch, Apple TV, and/or Apple Car?, is just above the industry average. Apple Watch needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
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 -
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Apple Watch can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Apple's Future: Apple Watch, Apple TV, and/or Apple Car?, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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 -
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.
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.
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? .
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.
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.
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.
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.
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.
Increasing wage structure of Apple Watch
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins 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.
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.
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.
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 .
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.