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 - – customer relationship management is fast transforming because of increasing concerns over data privacy, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion, cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels,
digital marketing is dominated by two big players Facebook and Google, technology disruption, 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 -
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.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Apple Retail digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Apple Retail has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Sustainable margins compare to other players in Technology & Operations industry
– Eight Inc. and Apple Retail Stores firm has clearly differentiated products in the market place. This has enabled Apple Retail to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Apple Retail to invest into research and development (R&D) and innovation.
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.
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.
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.
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.
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.
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.
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.
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.
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 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.
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.
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.
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.
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.
Lack of clear differentiation of Apple Retail products
– To increase the profitability and margins on the products, Apple Retail needs to provide more differentiated products than what it is currently offering in the marketplace.
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.
Increasing silos among functional specialists
– The organizational structure of Apple Retail is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Apple Retail needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Apple Retail to focus more on services rather than just following the product oriented approach.
High operating costs
– Compare to the competitors, firm in the HBR case study Eight Inc. and Apple Retail Stores 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 Retail 's lucrative customers.
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.
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.
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 -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Apple Retail is facing challenges because of the dominance of functional experts in the organization. Eight Inc. and Apple Retail Stores 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.
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.
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.
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.
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.
Better consumer reach
– The expansion of the 5G network will help Apple Retail to increase its market reach. Apple Retail 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.
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.
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.
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.
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.
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.
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.
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 -
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 Retail 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.
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 .
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Eight Inc. and Apple Retail Stores, Apple Retail may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .
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.