Strategic management u2 ip


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Strategic management u2 ip

  1. 1. SCANNING THE ENVIRONMENT 1Elisha SonsonAmerican Intercontinental UniversityStrategic Management: Scanning the EnvironmentMGT680 – StrategicNovember 18, 2012
  2. 2. SCANNING THE ENVIRONMENT 2The SWOT (Strength-Weakness-Opportunities-Threats) medium is a vitalcomplementary tool that assists managers in developing four different categories of strategies;the Strength-opportunities (SO) strategies, Weakness-opportunities (WO) strategies, theStrengths-threats (ST) strategies and the Weakness-threats (WT) strategies. David (2012)explains that the most challenging part of cultivating a SWOT matrix is being able to match thechief external and internal elements, which involves good judgment.The SO strategies utilize the internal strengths of the firm in order to benefit from theexternal trends and prospects. The WO strategies focus on refining internal weaknesses bybenefiting from external opportunities. David (2012) added that when external opportunitiesexist and firms have internal weaknesses that prevent them from take advantage of thoseopportunities. ST strategy utilizes the firms’ strength in order to lessen the influence of externalthreats. For example, firms that uses legal division to collect compensation for damages fromother companies who infringe or interfere with copyrights. The WT strategies unlike the STstrategy are protective strategies aimed at decreasing the firms’ internal weakness and preventingexternal threats. SWOT analysis is important as it presents communication and data that is usefulin corresponding to the resources and competences to the competitive background where thebusiness operates.Based on the assignment regarding Apple, Inc. there are many factors that identifiesApples’ strengths.StrengthsApple has overtime launched many innovative products, which are well-known andvalued product brands thus emerging as a tough competitor. Apples’ multiple inventive line ofproducts includes the iPods, a slim line of laptops, it’s very popular series of iPhones and its
  3. 3. SCANNING THE ENVIRONMENT 3newest innovation the iPad Mini highlights the indicative strength of this company. Apple isformulated with value and quality in mind and invented with the most modern technology, whichis a strong point of Apple Inc. Apple offers hardware, software and content, which gives thecompany complete power over the aspects of its design. The strength of Apple Inc. is its abilityto drive its market share. Its string of innovative products has put the company in a financialbracket that reaches the billion dollar mark. Fast forward to the 2011 launch of the iPhone 4s,Apple sales reached a record high of 20.3 million dollars in the last quarter, a financial strengththat has enable Apple to achieve the leading growth rate in the industry (Apple Inc. SWOTAnalysis, 2012).WeaknessAmid the strengths of Apple Inc. there are weaknesses. Most of the company’s’ growthrate comes from the iPhone and iPad combined. Apple offers its products in a price point unlikeits competitors like Samsung whose products are offered at various price points. The lack ofintroducing products at a lower selling price has Apples’ competitors accessing larger markets tocapture buyers’ interest. In addition, Apple’s segments lean towards only smartphones while itscompetitors focus on both smartphones and featured phones. Compared to its competitors thesefactors reduce Apple’s addressable market (Apple Inc. SWOT Analysis, 2012).OpportunitiesApple Inc. has many emerging opportunities on the market. Apple has manyopportunities to exploit in the entertainment, government and educational market. With itsdependable and quality of innovation, Apple has the opportunity to reach the corporate sector asthe campaign for “bring your own device” trend hits the corporate sector. Mobile vendors areother areas of opportunities for Apple Inc. since the launch of the series of iPhones keep
  4. 4. SCANNING THE ENVIRONMENT 4unveiling. Global and emerging nation provide strong growth opportunities for Apple. Withemerging nations like China and India, both have smartphone sales that infiltrate 20-30% of themarket compared to developed countries like the United States of America. This is an indicationthat there is a large untapped base for innovative products like the smartphone in emergingnations, which is a business opportunity for Apple (Apple Inc. SWOT Analysis, 2012).ThreatsApple Inc. faces powerful and extreme competition from companies like Google’sAndroid and Microsoft. These though adversaries can hammer the growth of Apple in the nearfuture. For example, Google’s Android is very popular and its platform has emerged to be thelargest mobile operating system on the market followed by Microsoft Windows, which isestimated to take over and secure market shares by the year 2015. With such intense competitionfrom its peers, Apple’s pricing strategy can be at a disadvantage against its competitors (AppleInc. SWOT Analysis, 2012). These factors create much threat for Apple Inc.The reviewed analysis of Apple Inc. would influence a strategy that would allow it totake advantage of the vulnerabilities in order to increase market share. As part of the strategicinfluence, Apple needs to magnify its market growth by focusing on emerging markets indeveloping nations. Apple needs to incorporate strategic avenues that would eliminate barriers ofincompatibility especially when it taps into emerging nations. In addition, Apple would have tocreate a strategic price point that would capture buyers’ attention away from competitors. Mostimportantly, Apple needs to focus on a strategy that recognizes a fit between its company’sstrength and future opportunities. The advantage of these strategies is that it would allow Appletake advantage of the SWOT analysis in order to infiltrate emerging markets and generaterevenue that would increase market share.
  5. 5. SCANNING THE ENVIRONMENT 5To end, the SWOT analysis is an important tool to any business because it focuses on thestrengths, weaknesses, opportunities and threats facing the company. Businesses engaged indevelopment, design and marketing of products all have factors that identify their strengths,weaknesses, opportunities and threat. The provision of such information is helpful in that it aidsin corresponding the company’s’ resources and abilities to the aggressive environment.
  6. 6. SCANNING THE ENVIRONMENT 6ReferencesApple Inc. SWOT Analysis, (2012), Apple Computer, Inc. SWOT Analysis, 1-9.David, (2012) Strategic Management Concepts and Cases: A Competitive Advantage Approach,Fourth edition Prentice Hall
  7. 7. SCANNING THE ENVIRONMENT 6ReferencesApple Inc. SWOT Analysis, (2012), Apple Computer, Inc. SWOT Analysis, 1-9.David, (2012) Strategic Management Concepts and Cases: A Competitive Advantage Approach,Fourth edition Prentice Hall