Eight Inc. and Apple Retail Stores SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study SWOT Analysis Solution
Case Study Description of Eight Inc. and Apple Retail Stores
On 15 May 2001, the first Apple retail store was opened to the public at Tysons Corner, Virginia, and the same day a second store was opened in Glendale, California. With retail branded experiences virtually unknown in the industry at the time, the decision to launch the Apple retail programme was greeted with scepticism. However, within the first week they welcomed 7,700 visitors, with sales of almost $600,000 - testimony to its undoubtable success - and went on to roll out another 24 stores. Fifteen years on, there are over 450 Apple stores globally, with higher sales per square foot - $5009 - than any other retail location in the United States. Even today, people still wonder what made them so successful and how it can be replicated. Having successfully designed a brand-defining experience for Apple retail that created immense value, Eight Inc. had to decide how this level of success could be replicated for other potential clients. The case describes the relationship between Apple and Eight Inc., who were initially hired by Apple co-founder Steve Jobs to work on first the MacWorld tradeshows. It traces the steps in the process, from establishing the case to each minute detail in the design process. The case describes how the team built not just a store but a breakthrough branded customer experience.
Swot Analysis of "Eight Inc. and Apple Retail Stores" written by Manuel Sosa, Anne-Marie Carrick includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Apple Retail facing as an external strategic factors. Some of the topics covered in Eight Inc. and Apple Retail Stores case study are - Strategic Management Strategies, Design, Operations management and Technology & Operations.
Some of the macro environment factors that can be used to understand the Eight Inc. and Apple Retail Stores casestudy better are - – there is increasing trade war between United States & China, there is backlash against globalization, talent flight as more people leaving formal jobs, supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models, increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy,
geopolitical disruptions, increasing commodity prices, etc
Introduction to SWOT Analysis of Eight Inc. and Apple Retail Stores
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Eight Inc. and Apple Retail Stores case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Apple Retail, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Apple Retail 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 Eight Inc. and Apple Retail Stores can be done for the following purposes –
1. Strategic planning using facts provided in Eight Inc. and Apple Retail Stores case study
2. Improving business portfolio management of Apple Retail
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Apple Retail
Strengths Eight Inc. and Apple Retail Stores | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Apple Retail in Eight Inc. and Apple Retail Stores Harvard Business Review case study are -
Strong track record of project management
– Apple Retail is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Successful track record of launching new products
– Apple Retail has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Apple Retail 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 Retail 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.
Ability to recruit top talent
– Apple Retail is one of the leading recruiters in the industry. Managers in the Eight Inc. and Apple Retail Stores are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Organizational Resilience of Apple Retail
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Apple Retail does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Diverse revenue streams
– Apple Retail is present in almost all the verticals within the industry. This has provided firm in Eight Inc. and Apple Retail Stores 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.
Ability to lead change in Technology & Operations field
– Apple Retail 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 Retail in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Operational resilience
– The operational resilience strategy in the Eight Inc. and Apple Retail Stores 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.
Training and development
– Apple Retail has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Eight Inc. and Apple Retail Stores 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.
Low bargaining power of suppliers
– Suppliers of Apple Retail in the sector have low bargaining power. Eight Inc. and Apple Retail Stores has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Apple Retail to manage not only supply disruptions but also source products at highly competitive prices.
Cross disciplinary teams
– Horizontal connected teams at the Apple Retail 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.
Learning organization
- Apple Retail 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 Retail is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Eight Inc. and Apple Retail Stores Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Eight Inc. and Apple Retail Stores | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Eight Inc. and Apple Retail Stores are -
Capital Spending Reduction
– Even during the low interest decade, Apple Retail 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.
Need for greater diversity
– Apple Retail 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Eight Inc. and Apple Retail Stores 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 Retail has relatively successful track record of launching new products.
Low market penetration in new markets
– Outside its home market of Apple Retail, firm in the HBR case study Eight Inc. and Apple Retail Stores needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring
– The stress on hiring functional specialists at Apple Retail has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Slow decision making process
– As mentioned earlier in the report, Apple Retail 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 Retail 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Manuel Sosa, Anne-Marie Carrick suggests that, Apple Retail 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Eight Inc. and Apple Retail Stores, in the dynamic environment Apple Retail has struggled to respond to the nimble upstart competition. Apple Retail has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Products dominated business model
– Even though Apple Retail 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 - Eight Inc. and Apple Retail Stores should strive to include more intangible value offerings along with its core products and services.
No frontier risks strategy
– After analyzing the HBR case study Eight Inc. and Apple Retail Stores, it seems that company is thinking about the frontier risks that can impact Technology & Operations 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 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 Retail supply chain. Even after few cautionary changes mentioned in the HBR case study - Eight Inc. and Apple Retail Stores, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Apple Retail vulnerable to further global disruptions in South East Asia.
Opportunities Eight Inc. and Apple Retail Stores | 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 Eight Inc. and Apple Retail Stores are -
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Apple Retail in the consumer business. Now Apple Retail can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Apple Retail 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 Retail to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Apple Retail can use the latest technology developments to improve its manufacturing and designing process in Technology & Operations 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.
Leveraging digital technologies
– Apple Retail 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Apple Retail in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Technology & Operations segment, and it will provide faster access to the consumers.
Creating value in data economy
– The success of analytics program of Apple Retail has opened avenues for new revenue streams for the organization in the industry. This can help Apple Retail to build a more holistic ecosystem as suggested in the Eight Inc. and Apple Retail Stores case study. Apple Retail can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Apple Retail 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Technology & Operations industry, but it has also influenced the consumer preferences. Apple Retail can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Apple Retail can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Using analytics as competitive advantage
– Apple Retail 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 Eight Inc. and Apple Retail Stores - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Apple Retail to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Retail 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 Retail 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.
Buying journey improvements
– Apple Retail can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Eight Inc. and Apple Retail Stores 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.
Threats Eight Inc. and Apple Retail Stores External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Eight Inc. and Apple Retail Stores are -
Increasing wage structure of Apple Retail
– 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 Retail.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Apple Retail with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Retail.
Shortening product life cycle
– it is one of the major threat that Apple Retail is facing in Technology & Operations 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 Retail 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 Eight Inc. and Apple Retail Stores .
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 Retail in the Technology & Operations sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Apple Retail 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Apple Retail in the Technology & Operations industry. The Technology & Operations 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.
Technology acceleration in Forth Industrial Revolution
– Apple Retail has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Apple Retail needs to keep up with the evolution of technology in the Technology & Operations 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.
Environmental challenges
– Apple Retail 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 Retail can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
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 Retail needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
High dependence on third party suppliers
– Apple Retail 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.
Easy access to finance
– Easy access to finance in Technology & Operations field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Apple Retail can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Eight Inc. and Apple Retail Stores 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 Eight Inc. and Apple Retail Stores 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 Eight Inc. and Apple Retail Stores 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 Eight Inc. and Apple Retail Stores 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 Eight Inc. and Apple Retail Stores 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 Retail needs to make to build a sustainable competitive advantage.
