Eight Inc. and Apple Retail Stores SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
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 - – cloud computing is disrupting traditional business models, wage bills are increasing, increasing transportation and logistics costs, there is backlash against globalization, increasing household debt because of falling income levels, increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs,
central banks are concerned over increasing inflation, challanges to central banks by blockchain based private currencies, 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 -
Effective Research and Development (R&D)
– Apple Retail 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 Eight Inc. and Apple Retail Stores - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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.
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.
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.
High brand equity
– Apple Retail has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Apple Retail to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Apple Retail 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 Eight Inc. and Apple Retail Stores HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
Innovation driven organization
– Apple Retail is one of the most innovative firm in sector. Manager in Eight Inc. and Apple Retail Stores Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Analytics focus
– Apple Retail 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 Manuel Sosa, Anne-Marie Carrick 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.
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.
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.
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.
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 -
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.
Workers concerns about automation
– As automation is fast increasing in the segment, Apple Retail 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.
Slow to strategic competitive environment developments
– As Eight Inc. and Apple Retail Stores HBR case study mentions - Apple Retail takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
High cash cycle compare to competitors
Apple Retail 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 Retail is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Eight Inc. and Apple Retail Stores can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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.
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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Eight Inc. and Apple Retail Stores, it seems that the employees of Apple Retail 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.
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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Eight Inc. and Apple Retail Stores, is just above the industry average. Apple Retail 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 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 -
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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Apple Retail can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Building a culture of innovation
– managers at Apple Retail 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 Technology & Operations segment.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Apple Retail 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 Retail 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.
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 Retail can use these opportunities to build new business models that can help the communities that Apple Retail operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
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.
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.
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.
Developing new processes and practices
– Apple Retail can develop new processes and procedures in Technology & Operations 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.
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.
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.
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.
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.
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.
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.
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 Retail business can come under increasing regulations regarding data privacy, data security, etc.
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 Retail 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 Technology & Operations industry regulations.
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.
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.
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.
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.
Consumer confidence and its impact on Apple Retail demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
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.
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.