BCG Matrix Analysis of Apple

Introduction

So, what is the BCG matrix?

Boston Consulting Group, commonly known as BCG matrix, is a planning tool that employs graphical representations of a company's products and services to help the organization determine what to maintain, sell, or spend more in. Therefore, the Apple BCG matrix is a tool that assists the company in making crucial decisions that contributes to its growth rate.

The BCG growth-share matrix classifies products into four groups, dubbed "dogs," "cash cows," "stars," and "question marks" heuristically.

A matrix is a decision-making tool that does not necessarily account for all the circumstances that a company will encounter. Increasing market share, for example, may be more costly than gaining additional revenue from new sales. Businesses must carefully plan for contingencies because product development can take years.

Let us move ahead to know about the BCG matrix of Apple.

Background of Apple

Apple Computers Inc, founded by college dropouts Steve Jobs and Steve Wozniak on April 1, 1976, aimed at making computers small and portable enough for people to have them anywhere they needed them. 

Jobs and Wozniak started in Jobs's garage, wherein they sold PCs without monitors, casing, or keyboards, which they later added in 1977. They were the first to introduce color graphics. Apple went public in 1980 after sales jumped to $117 million. Wozniak left the company three years later due to diminishing interest, post which PepsiCo's John Sculley joined to be the president. 

In 1990 Apple recorded its highest profit, but its market shares suffered, and by 1996, it was tagged doomed. A year later, its board of directors reached out to Jobs, who became an iCEO in 2000, leading Apple to its breakthrough with the introduction of the Mac and iBook, followed by the iPod. With the death of Steve Jobs on October 5, 2011, Apple continued making a difference with the appointment of Tim Cook as the CEO. Apple now has a wide range of products in high market demand.

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Apple BCG Matrix

Dogs, Stars, Cash Cows, and Question Mark are four categories in which you can classify different business units or products in the BCG matrix of Apple.

The BCG Matrix is also the Growth-Share Matrix because it is based on the industry's growth rate and the market share of the individual businesses with the greatest rival present. Now, let's investigate the classification of the Apple BCG matrix in detail.

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Dogs

These are products that have a low growth rate or market share.

Dogs are products with low growth or market share and limited chances of demonstrating any growth.

Management should exercise extreme caution when investing in these business units or products, as they may not provide any benefit or profit to the company. These company units or goods are money pits and thus are a viable source of income. 

When Apple iPods were first released, they were the next great thing, but they failed to substantially affect it because of fierce competition and poor client demand. You can place Apple iPods easily under the Dogs group in the BCG Matrix of Apple.

Cash Cow

These products have a significant market share in low-growth markets.

Cash Cows are business units or products with a large market share in an industry that is not likely to grow much.

These business units or products generate the most revenue for the company and require very little investment to maintain its profitability. Apple has two products that fall under the Cash Cow category of the BCG Matrix: Apple iTunes and Apple MacBook, and iMacs.

Star

Star-based products have a high market share in growth markets.

Products or business units with high market share and future growth potential are positioned as stars.

Industry dynamics also support growth as the industry is also in a developmental stage. Given the industry's growth prospects, these products have the potential to be positioned as cash cows in the future. Apple's iPhones are unquestionably the company's stars. With every new launch of the Apple iPhone, the company sets new sales records.

Apple's iPad and Apple Smartwatch are both considered Stars for the corporation and are currently transforming to become Cash Cows.

Question Mark

These are products in growth markets with smaller market shares.

Question marks are those products or business areas of a company that can either be a source of income through stardom or a future loss-making machine for the company.

The industry has high growth potential, so there is room for product growth only if the related issues are effectively managed. Apple TV is profitable, but it isn't achieving its full potential.

If Apple can overcome a few ecosystem issues, it could genuinely dominate the television market. There are many rumors about an Apple TV product that could be as successful as the iPod/iPhone/iPad.

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 Key Takeaways

Now that we have understood how the Apple BCG matrix works and its importance, we can say that it is a great tool to employ for decision-making. With the introduction of PDF Agile, editing and converting PDF files to other supported formats is now easy and in no time.

Apple BCG matrix is a tool used for decision-making to know the products to sell and the profitable investment.

• The BCG matrix of Apple classifies business units into four categories: Dog, Star, Cash Cow, and Question Mark.
• PDF Agile is a fantastic program that aids easy editing and conversion of pdf files into Word, Excel, PowerPoint, TXT, images, CAD, and vice versa while retaining the original formatting.

References

‘BCG Matrix of Apple | BCG Matrix Analysis of Apple'  by heartofcodes Available at: https://heartofcodes.com/bcg-matrix-of-apple/ (July 2018).

Angelique Richardson. ‘The Founding of Apple Computers Inc,' [online]. Available at: https://guides.loc.gov/this-month-in-business-history/april/apple-computers-founded (March 2021).

Adam Hayes. ‘BCG Growth-Share Matrix' [online]. Available at: https://www.investopedia.com/terms/b/bcg.asp (October 2022).