Threats.

• High level of competition and big range of substitute products on the market.

• High rate of growth of technology.
• There are many other firms entering the market, which try to make similar or better products than Apple.
• Some firms are more specialised at producing particular products in their market than Apple.
• Decrease in the population or decrease in the number of people who do swimming might affect Apple sales.
• Also, if there’s, for example, an economic crisis, or increase in the interest rates, then people will be less likely to buy luxury goods, such as iPods, which can also affect Apple.
• Change in the exchange rates might cause some difficulties to Apple, as it might become more expensive for them to distribute their products to some countries.
• By investing huge amounts of money into marketing and promotion of their products, Apple is decreases its profits, which means some workers might have less incentive to work hard, and shareholders become dissatisfied, as the company doesn’t bring as much profits as they would like to.

 

One of the main determinants of company’s strengths is its position on the market. Apple has been on the PC market for a very long time. However, due to the number of problems in the past, Apple has lost its positions on this market, and is currently trying to get it back and gain more shares on the PC market, as well as diversify in the digital player market. From the graphs and diagrams, given below, it can be clearly seen how Apple sales of the mp3 players and their shares on the PC market have been increasing over the past few years.

 

 

From the graph given above, it is evident, that shipments of portable mp3 players have be rising from 2004 up to 2007, and there are very optimistic forecasts, that the sales of mp3 players are expected to rise even more in the following years. However, from this graph it is also evident, that shipments of hard-rive based mp3 players are not as big as shipments of flash-based mp3 players. In 2007 the shipments of hard drive based and flash mp3 players were almost the same. The shipments of both are expected to rise, but market analysts believe, that in the future customers will give their preferences to the flash-based mp3 players, as they are much smaller, cheaper and easier to carry and use. This, therefore, suggests that Apple needs to monitor how their customers’ preferences change over time, as Apple might need to start soon moving towards the flash-based mp3 players. At the moment, Apple is producing both types of the mp3 players, but it is more concentrated on producing hard drive- based mp3 players rather than flash ones, as they are more expensive, offer more functions, and allow Apple customers to store more music and other media files on their products. This can have a major affect on my new product as well. For example, if Apple decides to concentrate on producing hard drive based mp3 players, then it will be unlikely to produce Apple swimming goggles, as they involve using flash mp3 player, as it’s easier to build it into the goggles.

 

As we can see, in 2005 Apple Market share on the PC market was 3.7%, whereas in 2006 with a 30.6% growth, Apple shares on the PC market increased to up to 5.1%. This suggests that not only Apple shares, but people’s preferences change as well. Currently more people start to give their preferences to Apple. There are some reasons why people’s preferences started to change. Recently, Apple has made some major changes in their products. Before, Apple computers could only have a Mackintosh operation system which meant that not all software programs and files, especially the ones written for Windows, could be compatible with Apple products. Windows has always been more spread than Apple and Apple customers had to make a choice whether they want to buy a computer with unusual design or a functional computer for work. Recently, Apple has made the first computer with two operational systems Mackintosh and Windows, so the users can switch between two. This now makes all Apple computers compatible with all existing software programs, which means Apple customers no longer have to choose between two software giants. The main aim of introducing this new function is aimed to increase the number of Apple users, because there are many more people who prefer to use Windows. Also, the strategy of introducing this new function is that, over time people will become more used to using Mac system, and then they will see all advantages of Mac system over Windows, and are eventually expected to switch from using Windows to Mackintosh.

This also provides Mackintosh users with an opportunity to use any software or hardware, which is compatible with Windows. This makes Mackintosh system universal.

 

Apart from highly increasing number of sales, Apple has a well promoted brand name and brand loyalty. Apple is the oldest hardware manufacturer and has created itself a very good brand name, which many people are aware of. Convenient and unusual design makes Apple products very unique, comparing to the other already existing products on the market.

In addition to this, Apple is currently maintaining very high profits, which allows Apple to invest large proportion of their profits into marketing of their. It means Apple can spend more money on to advertising and promotion of their products. Also, because their products can be produced on a big scale, there’s a wide range of different sources, which Apple can use, in order to promote their products. Massive marketing budgets allow Apple to make people aware about their products more than their competitors, which results in encouraging people to buy Apple products. The way Apple advertises its products is quite unusual as well as their products. Some people are simply interested in their adverts, which encourage them to buy their products.

 

Apple has a very unique design of their products, which makes their customers feel unique. Apple is very innovative and is always the first. This encourages customers to buy their products, as they want to be the first ones to use their products. There are also many Apple stores spread within the cities. In these stores, people are provided with an opportunity to try some of the Apple products before they actually come out. There also many members of staff, which describe all details about new products, also trying to make people interested in Apple products and trying to encourage to buy Apple products as soon as they come out. Customers are sometimes so desperate for Apple products, that they can order them on-line 2-3 weeks in advance. This also helps Apple to identify customers demand and interest in their products, which helps them find out how much sales they are expecting.

 

Technology improves so quickly, that some companies can’s keep up-to-date, as it leads to additional investments into research and development of the new products, which decreases profits of the company. However, Apple cannot afford avoid spending money on research and invention of the new products, if it wants to stay in the market or improve its positions on the market.

If Apple decides to produce swimming goggles with a mp3 player build in, it would be a good idea to cooperate together with Speedo, which is one of the leading companies on the sports market, which specialises at producing goggles and swimming accessories.

 

Primary research