Apple Inc.: Managing a Global Supply Chain SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
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Case Study SWOT Analysis Solution
Case Study Description of Apple Inc.: Managing a Global Supply Chain
An analyst for a money management firm is studying Apple Inc. as one of the firm's key investments. In 2013, Apple had a market capitalization of nearly US$500 billion and sales of US$171 billion. According to the research firm, Gartner Group, it had the world's best supply chain, ranking ahead of companies such as Walmart, Amazon and Inditex (Zara). As part of the analysis, a full review of Apple's supply chain is required to look for insight into the future performance of the company in order to decide whether or not the analyst's firm should continue to hold Apple shares.
Swot Analysis of "Apple Inc.: Managing a Global Supply Chain" written by Fraser P. Johnson, Ken Mark includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Apple Supply facing as an external strategic factors. Some of the topics covered in Apple Inc.: Managing a Global Supply Chain case study are - Strategic Management Strategies, Organizational culture, Strategy, Supply chain, Technology and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Apple Inc.: Managing a Global Supply Chain casestudy better are - – wage bills are increasing, customer relationship management is fast transforming because of increasing concerns over data privacy, there is backlash against globalization, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing government debt because of Covid-19 spendings, increasing commodity prices, central banks are concerned over increasing inflation,
challanges to central banks by blockchain based private currencies, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Apple Inc.: Managing a Global Supply Chain
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Apple Inc.: Managing a Global Supply Chain case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Apple Supply, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Apple Supply 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 Inc.: Managing a Global Supply Chain can be done for the following purposes –
1. Strategic planning using facts provided in Apple Inc.: Managing a Global Supply Chain case study
2. Improving business portfolio management of Apple Supply
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Apple Supply
Strengths Apple Inc.: Managing a Global Supply Chain | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Apple Supply in Apple Inc.: Managing a Global Supply Chain Harvard Business Review case study are -
High switching costs
– The high switching costs that Apple Supply 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 Supply in the sector have low bargaining power. Apple Inc.: Managing a Global Supply Chain has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Apple Supply to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Apple Supply
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Apple Supply does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Apple Supply 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 Apple Inc.: Managing a Global Supply Chain HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Apple Supply is one of the leading recruiters in the industry. Managers in the Apple Inc.: Managing a Global Supply Chain are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Diverse revenue streams
– Apple Supply is present in almost all the verticals within the industry. This has provided firm in Apple Inc.: Managing a Global Supply Chain 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.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Apple Supply digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Apple Supply 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.
Successful track record of launching new products
– Apple Supply has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Apple Supply 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.
Training and development
– Apple Supply has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Apple Inc.: Managing a Global Supply Chain 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.
Superior customer experience
– The customer experience strategy of Apple Supply in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Analytics focus
– Apple Supply 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 Fraser P. Johnson, Ken Mark 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.
Strong track record of project management
– Apple Supply is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Apple Inc.: Managing a Global Supply Chain | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Apple Inc.: Managing a Global Supply Chain are -
Capital Spending Reduction
– Even during the low interest decade, Apple Supply 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.
Low market penetration in new markets
– Outside its home market of Apple Supply, firm in the HBR case study Apple Inc.: Managing a Global Supply Chain needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Need for greater diversity
– Apple Supply 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Apple Inc.: Managing a Global Supply Chain, is just above the industry average. Apple Supply 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.
Interest costs
– Compare to the competition, Apple Supply has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Slow to strategic competitive environment developments
– As Apple Inc.: Managing a Global Supply Chain HBR case study mentions - Apple Supply 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 operating costs
– Compare to the competitors, firm in the HBR case study Apple Inc.: Managing a Global Supply Chain 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 Supply 's lucrative customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Apple Inc.: Managing a Global Supply Chain, it seems that the employees of Apple Supply 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Apple Supply 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.
No frontier risks strategy
– After analyzing the HBR case study Apple Inc.: Managing a Global Supply Chain, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People 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 cash cycle compare to competitors
Apple Supply 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.
Opportunities Apple Inc.: Managing a Global Supply Chain | 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 Inc.: Managing a Global Supply Chain are -
Manufacturing automation
– Apple Supply can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Apple Supply 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 Supply to hire the very best people irrespective of their geographical location.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Apple Supply 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 Supply 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.
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 Supply can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Supply in the consumer business. Now Apple Supply can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Apple Supply 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 Leadership & Managing People segment.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Apple Supply in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Apple Supply can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Leveraging digital technologies
– Apple Supply 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 Supply 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.
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 Supply 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Apple Supply can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Apple Supply 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 Inc.: Managing a Global Supply Chain, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Apple Inc.: Managing a Global Supply Chain External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Apple Inc.: Managing a Global Supply Chain are -
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 Supply in the Leadership & Managing People sector and impact the bottomline 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 Apple Inc.: Managing a Global Supply Chain, Apple Supply may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Apple Supply 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 Inc.: Managing a Global Supply Chain .
Shortening product life cycle
– it is one of the major threat that Apple Supply is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Supply business can come under increasing regulations regarding data privacy, data security, etc.
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Apple Supply can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Apple Supply 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 Leadership & Managing People industry regulations.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Apple Supply in the Leadership & Managing People industry. The Leadership & Managing People 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.
Stagnating economy with rate increase
– Apple Supply 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.
High dependence on third party suppliers
– Apple Supply 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 Supply 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.
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 Supply.
Weighted SWOT Analysis of Apple Inc.: Managing a Global Supply Chain 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 Inc.: Managing a Global Supply Chain 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 Inc.: Managing a Global Supply Chain 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 Inc.: Managing a Global Supply Chain 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 Inc.: Managing a Global Supply Chain 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 Supply needs to make to build a sustainable competitive advantage.
