Apple 2005

Apple Computer Inc.
2005
A Strategic Management Case Study
Graphics are the property of Apple Computer
2007, Tony Gauvin, UMFK
Overview
A brief history of Apple Computer EOY 2004
Mission, Vision, Objectives, Strategies New Vision and Mission
Opportunities & Threats CPM EFE
Possible alternative strategies Our Recommendation

Strategies Long range objectives EPS/EBIT
2005
External Analysis
Internal Analysis
Financial Data Strengths and weaknesses IFE Financial ratios
Strategic Analysis
SWOT Matrix SPACE BCG IE matrix Grand Strategy Matrix Matrix Analysis QSPM
Implementation Issues Proposed annual objectives (goal) and polices Proposed procedures for evaluation Epilogue Current Performance Questions Resources Utilized
History of Apple
1976
Apple started in a garage in Santa Clara, CA by Steve Wozniak and Steve Jobs A easy to use PC for small computer users
1980
$117,000,000 in sales IPO
1983
Wozniak quits Jobs hires John Sculley From Pepsi Co. to become President of Apple
1984
Macintosh PC
History of Apple
1985
Jobs and Sculley have a falling out Jobs fired Sculley becomes CEO Bill Gates wants to buy Mac O/S, Sculley says No, Gates buys DOS from IBM, Microsoft kicks Apple's butt (90% market share)
1993
Apple release Newton, the first PDA Earnings Plunge, Apple restructures, Sculley Resigns
1997
Apple CEO Gilbert Amelio buys NextStep from Steve Jobs Earnings Plunge, Apple restructures, Amelio Resigns
1998
Steve Jobs returns as iCEO
History of Apple
1998
Jobs restructures Apple along two products lines
Consumer iMac
i for internet
Professional PowerMac
power for power user
Sales return, Brand emerges, Innovation rules

USB, Firewire, Airport iPod and iTunes
Stock price takes off like a rocket!
Lesson learned
+
=
6
2004 Vision Statement

Apple ignited the personal computer revolution in the 1970s with the Apple II and reinvented the personal computer in the 1980s with the Macintosh. Apple is committed to bringing the beast personal computing experience to students, educators, creative professional, and consumers around the world through its innovative hardware, software, and Internet offerings
2004 Mission
Apple Computer is committed to protecting the environment, health and safety of our employees, customers and the global communities where we operate. We recognize that by integrating sound environmental, health and safety management practices into all aspects of our business, we can offer technologically innovative products and services while conserving and enhancing resources for future generations. Apple strives for continuous improvement in our environmental, health and safety management systems and in the environmental quality of our products, processes and services.
2004 Strategies
Market Penetration
Branding Niche player
New Product Development

Speech recognition Virtual reality
2004 objectives
Double market Share from 5% to 10% Remain as the most profitable computer company in the industry
10
2004 Issues
How can apple best capitalize on the needs of the business world for a safer, virus-free, wormfree system? Should Apple enter the consumer electronics business like Dell and Gateway did? Should Apple remain a lone wolf in Operating Systems or adopt a cross-platform format compatible with Windows and Intel How much emphasis should Apple place on developing the next generation of voice recognition computers?
11
A new vision
To become the global leader in computer and digital music products.

12
A New Mission
The Apple commitment to excellence is its mission to provide computers and service (2) for people (1) that meet the highest standards of value and reliability. Apple is one of the leaders in the computer industry and produces some of the best-selling computers and digital music products in the world (3). Apple provides the highest level of quality and value for our customers (7). Those are timeless fundamentals. We also apply innovative technology to our core business (4) to make our products irresistible to customers, beneficial to society, and profitable to our company (5). We strive to provide additional opportunities for growth and enrichment of company personnel while maintaining a work environment for all employees (9) that encourages personal commitment and participation in support of achieving excellence. We are committed to being a good corporate citizen, and being openly honest with all of our stakeholders (6). We support activities that enable people to improve their lives and reinforce their commitment to society (8).
13
Apples New Mission

The new mission answers the following questions 1. Customers: Who are the firms customers? 2. Products or services: What are the firms major products? 3. Markets: Geographically, where does the firm compete? 4. Technology: Is the firm technologically current? 5. Concern for survival, growth, and profitability: Is the firm committed to growth and financial soundness? 6. Philosophy: What are the basic beliefs, values, aspirations, and ethical priorities of the firm? 7. Self-concept: What is the firms distinctive competence or major competitive advantage? 8. Concern for public image: Is the firm responsive to social, community, and environmental concerns? 9. Concern for employees: Are employees a valuable asset of the firm?
14
External Audit (Opportunities)

1. Increase in worms and viruses on PCs. 2. Large population (Gen X & Y) which are extremely individualistic and name brand conscious. 3. Government crackdown on pirating music off the Internet. 4. Much of the world is still without computers. 5. People enjoy small electronic gadgets.
15
External Audit (Threats)

1. Companies not seeing Apple as compatible with their software. 2. Dell and HP are major competitors. 3. Increasing competition with music downloads. 4. Competition produces similar products at often half the price. 5. The population at large unwilling to use Macintosh.
16
Apple CPM
Apple
Critical Success Factors Market Share Price Financial Position Product Quality Consumer Loyalty Advertising Management Global Expansion Innovation Web Development Weight Rating Weighted Score 0.20 0.20 0.45 0.60 0.60 0.16 0.24 0.12 0.56 0.15 Rating
HP
Weighted Score 0.30 0.30 0.60 0.45 0.30 0.08 0.18 0.12 0.28 0.10 Rating
Dell
Weighted Score 0.40 0.40 0.45 0.45 0.45 0.12 0.18 0.18 0.28 0.15
0.10 0.10 0.15 0.15 0.15 0.04 0.06 0.06 0.14 0.05
2 2 3 4 4 4 4 2 4 3
3 3 4 3 2 2 3 2 2 2
4 4 3 3 3 3 3 3 2 3
Total
1.00
3.28
2.71
3.06
17
Apple EFE
Key External Factors
Weight
Rating
Weighted Score
Opportunities
Increase in worms and virus on PCs. Large population (Gen X & Y) which are extremely individualistic and name brand conscious. Government crackdown on pirating music off the Internet. Much of the world is still without computers. People enjoy small electronic gadgets. Threats Companies not seeing Apple as compatible with their software. Dell and HP are major competitors. Increasing competition with music downloads. Competition produces similar products at often half the price. The population at large unwilling to use Macintosh. TOTAL 0.10 0.10 0.05 0.10 0.10 1.00 2 3 4 3 2 0.20 0.30 0.20 0.30 0.20 3.20 0.15 0.15 0.05 0.10 0.10 4 4 4 2 4 0.60 0.60 0.20 0.20 0.40
18
Consolidated Balance Sheet
19
Consolidated statement of operations
20
Internal Audit (Strengths)

1. iTunes Music Store is a good source of revenue, especially with the iPod and its availability on Windows platform. 2. Developing own software and hardware. 3. Apples niche audience provides the company with some insulation from the direct price competition. 4. Revamping desktop and notebook lines. 5. Web technology can be used to improve product awareness and sales. 6. Low debtmore maneuverable.
21
Internal Audit (weaknesses)

1. Weak relationship with Intel and Microsoft. 2. Weak presence globally. 3. Dependency on new product launches. 4. Weak presence in markets other than education and publishing. 5. Slow turnaround on high demand products.
22
Apple IFE
Key Internal Factors Strengths iTunes Music Store is a good source of revenue, especially with the iPod and the availability on Windows platform. Apples niche audience provides the company with some insulation from the direct price competition. Revamping desktop and notebook lines. Low debtmore maneuverable. Developing own software and hardware. Good brand loyalty. Web technology can be used to improve product awareness and sales. 0.15 0.10 0.10 0.06 0.14 0.05 0.10 4 3 3 4 3 3 4 0.60 0.30 0.30 0.24 0.42 0.15 0.40 Weight Rating Weighted Score
Weaknesses
Dependency on new product launches. Weak presence globally. Slow turnaround on high demand products. Weak relationship with Intel and Microsoft. Weak presence in markets other than education and publishing. Total 0.06 0.07 0.03 0.10 0.04 1.00 1 1 2 1 2 0.06 0.07 0.06 0.10 0.08 2.78
23
Financial Ratio Analysis

(January 2006)
Growth Rates % Sales (Qtr vs. year ago qtr) Apple Computer 56.50 Industry 18.00 SP-500 14.20
Net Income (YTD vs. YTD)

Net Income (Qtr vs. year ago qtr) Sales (5-Year Annual Avg.) Net Income (5-Year Annual Avg.) Dividends (5-Year Annual Avg.) Price Ratios Current P/E Ratio P/E Ratio 5-Year High P/E Ratio 5-Year Low Price/Sales Ratio Price/Book Value Price/Cash Flow Ratio Profit Margins Gross Margin Pre-Tax Margin Net Profit Margin 5-Yr Gross Margin (5-Year Avg.) 5-Yr Pre-Tax Margin (5-Year Avg.) 5-Yr Net Profit Margin (5-Year Avg.)
383.70
305.70 12.64 NA NA
78.90
17.40 5.00 NA NA
16.30
17.00 4.93 10.40 4.27
46.1 NA NA 4.35 8.11 39.90
31.6 NA NA 1.88 10.57 26.80
18.8 64.8 17.4 1.48 2.83 12.40
30.3 13.0 9.6 29.1 5.9
20.2 8.5 6.2 20.3 5.8 3.8
47.2 11.9 8.0 47.3 9.4 5.8
2007, Tony4.3 Gauvin, UMFK
24
Financial Ratio Analysis

(January 2006)
Financial Condition Debt/Equity Ratio 0.00 0.06 1.06
Current Ratio
Quick Ratio Interest Coverage Leverage Ratio Book Value/Share Investment Returns % Return on Equity Return on Assets Return on Capital Return on Equity (5-Year Avg.) Return on Assets (5-Year Avg.) Return on Capital (5-Year Avg.) Management Efficiency Income/Employee Revenue/Employee Receivable Turnover Inventory Turnover Asset Turnover
3.0
2.6 NA 1.5 8.86
1.5
1.2 NA 2.9 3.50
1.4
0.9 3.5 5.7 13.26
17.9 11.6 17.9 6.9 4.4 6.7
34.6 12.0 32.6 17.0 7.1 15.7
15.3 2.7 7.4 11.9 2.0 5.6
90,000 941,000 16.7 73.0 1.4
63,000 1 Mil 12.2 66.8 2.1
29,000 367,000 7.7 7.8 0.4
25
Financial Trends
Date 2005 2004 2003 2002 2001 Avg. P/E 23.5 40.6 90.1 111 NA Price/Sales 3.21 1.83 1.22 0.91 1.02 Price/Book 6 2.99 1.8 1.27 1.39 Net Profit Margin (%) 9.6 3.3 1.1 1.1 -0.7
Date 2005
Book Value/ Share $8.94
Debt/Equity 0
ROE (%) 17.9
ROA (%) 11.6
Interest Coverage NA
2004
2003 2002 2001
$6.48
$5.76 $5.70 $5.59
0
0 0.08 0.08
5.4
1.6 1.6 NA
3.4
NA NA -0.6
NA
NA NA N
26
Apple Stock Performance
2007, Tony Gauvin, UMFK http://moneycentral.msn.com/investor/charts/charting.asp?symbol=AAPL
27
Apple Net Worth

(January 2006 in millions)
1. Stockholders Equity + Goodwill = 7,466 + 69 2. Net Income x 5 = $1,355 x 5= 3. Share price = $72.00/EPS(1.56) = 46.15 x Net Income $1,335 = 4. Number of Shares Outstanding x Share Price = 842 x $72.00 = Method Average
$ 7,535 $ 6,775 $ 61,610 $ 60,624 $34,136
28
Strategic Analysis Swot Matrix

Strengths 1.iTunes Music Store is a good source of revenue, especially with the iPod and the availability on Windows platform. 2.Developing own software and hardware. 3.Apples niche audience provides the company with some insulation from the direct price competition. 4.Revamping desktop and notebook lines. 5.Web technology can be used to improve product awareness and sales. 6.Low debtmore maneuverable. 7.Good brand loyalty. Opportunities 1.Increase in worms and viruses on PCs. 2.Large population (Gen X & Y) which are extremely individualistic and name brand conscious. 3.Government crackdown on pirating music off the Internet. 4.Much of the world is still without computers. 5.People enjoy small electronic gadgets. S-O Strategies 1.Increase awareness through the Web of the immunity of Mac products to worms and viruses. (S5, O1) 1.Advertise using individuals that will link Generation X & Y to the iTunes and other related products. (S1, O2, O4, O5) 2.Use movies and music groups that are geared towards Gen X and Y to promote computers and laptops. (S3, S5, O2, O5) Weaknesses 1.Weak relationship with Intel and Microsoft. 2.Weak presence in business arena. 3.Dependency on new product launches. 4.Weak presence in markets other than education and publishing. 5.Slow turnaround on high demand products.
W-O Strategies 1.Increase ties with Microsoft and Intel and their products.(W1, W2, W4 O2, O3) 2.Promote to business the safety of having a worm and virus free computer by using Mac. (W2, W4, O1, O5). 3.Expand production into Asia (W2, O4).
Threats
S-T Strategies
W-T Strategies
1.Companies not seeing Apple as compatible with their software. 2.Dell and HP are major competitors. 3.Increasing competition with music downloads. 4.Competition produces similar products at often half the price. 5.The population at large unwilling to use Macintosh.
1.Increase and promote the compatibility to Windows operating system. (S5,T1) 2.Promote the originality of Apple computers and the different style and stable system that is worth the price difference in style, stability and speed. (S2, S5, T2, T4, T5)
1.Improve relationship with Microsoft and Intel so that companies will see them as compatible. (W1, W2 T1) 2.Produce Wintel Compatible products (W1, T1).
29
Strategic Analysis Space Matrix

Financial Strength rating is 1 (worst) to 6 (best) 1 Leverage 2 Working Capital 3 Liquidity 4 Return on Investment 5 3 Year NEW income Industry Strength rating is 1 (worst) to 6 (best) 1 Growth Potential 2 Profit Potential 3 Financial Stability 4 Ease of Entry into Market 5 Labor Cost Environmental Stability rating is -1 (best) to -6 (worst) 1 Rate of Inflation 2 Technological Changes 3 Price elasticity of Demand 4 Competitive Pressure 5 Barriers to Entry into Market Competitive advantage rating is -1 (best) to -6 (worst) 1 Market Share 2 Product Quality 3 Customer Laylaity 4 Technological Know-How 5 Control over Suppliers and Ditribuors Ratings 3.0 3.0 4.0 5.0 5.0 20.0 4.0 4.0 5.0 2.0 3.0 18.0 -2.0 -5.0 -2.0 -6.0 -2.0 -17.0 -5.0 -1.0 -1.0 -1.0 -2.0 -10.0
FS Total
IS Total
ES Total
CS total
30
Strategic Analysis Space Matrix

Conservative FS 6 5 4 3 2 1 CA IS Aggressive
-6
-5
-4
-3
-2
-1 -1 -2 -3 -4 -5 -6
Defensive
ES
Competitive
31
Strategic Analysis Grand Strategy Matrix

Rapid Market Growth Quadrant II Quadrant I
Weak Competitive Position
Strong Competitive Position
Quadrant III Slow Market Growth
Quadrant IV
32
Apple IE Matrix
Grow and Build Hold and Maintain Harvest or Divest High 3-4
IFE Scores
Strong 3-4 Average 2-2.99 Weak 1-1.99
I
International
II
Domestic
III VI IX
EFE Scores
IV
Medium 2-2.99
V VIII
VII
Low 1-1.99
Segments Revenue Profit Gauvin, UMFK 52% Domestic 2007, Tony 54% International 46% 48%
EFE 3.5 3.0
IFE 2.6 3.0
33
Apple BCG Matrix

High 1.0 Medium .50 Low 0.0
High +20
Stars
Domestic Question Marks
II
Medium
IInternational
Dogs
0
Cash Cows
III
Low -20
Segments Domestic International
IV
Revenue Profit Growth Rate 54% 52% 17 46% 48% 5 2007, Tony Gauvin, UMFK Relative Market Share 0.3 0.2
34
Matrix Analysis
Alternative Strategies
Forward Integration
Backward Integration Horizontal Integration Market Penetration Market Development Product Development Concentric Diversification Conglomerate Diversification Horizontal Diversification Joint Venture Retrenchment Divestiture Liquidation X 1 X X X
BCG
IE
X
X X X X X
SPACE
X
X X X X X X X X
GRAND
COUNT
2
2 2 3 3
X X X X X
4 2 2 2 1
35
Apple QSPM
Strategic Alternatives Key Internal Factors Strengths iTunes Music Store is a good source of revenue, especially with the iPod and the availability on Windows platform. Apples niche audience provides the company with some insulation from the direct price competition. 0.15 0.10 Weight Produce Wintel compatible products AS 4.00 --TAS 0.60 --Expand production into Asia AS 3.00 --TAS 0.45 ---
Revamping desktop and notebook lines.

Low debtmore maneuverable. Developing own software and hardware. Good brand loyalty.
0.10
0.06 0.14 0.05
--1.00 --4.00
--0.06 --0.20
--4.00 --3.00
--0.24 --0.15
Web technology can be used to improve product awareness and sales.

Weaknesses Dependency on new product launches. Weak presence in business arena.
0.10
4.00
0.40
3.00
0.30
0.06 0.07
--1.00
--0.07
--3.00
--0.21
Slow turnaround on high demand products.

Weak relationship with Intel and Microsoft. Weak presence in markets other than education and publishing. SUBTOTAL
0.03
0.10 0.04 1.00
--4.00 2.00
--0.40 0.14 1.87
--1.00 4.00
--0.10 0.28 1.73
36
Apple QSPM
Key External Factors Weight Produce Wintel compatible products TAS 0.15 0.15 0.05 0.10 0.10 1.00 1.00 1.00 1.00 --0.15 0.15 0.05 0.10 --Expand production into Asia AS 3.00 4.00 4.00 4.00 --TAS 0.45 0.60 0.20 0.40 --Opportunities Increase in worms and virus on PCs. Large population (Gen X & Y) which are extremely individualistic and name brand conscious. Government crackdown on pirating music off the Internet. Much of the world is still without computers. People enjoy small electronic gadgets. Threats Companies not seeing Apple as compatible with their software. Dell and HP are major competitors. Increasing competition with music downloads. Competition produces similar products at often half the price. The population at large unwilling to use Macintosh. SUBTOTAL SUM TOTAL ATTRACTIVENESS SCORE 0.10 0.10 0.05 0.10 0.10 1.00 0.95 2.83 2.15 3.88 4.00 1.00 ----0.40 0.10 ----2.00 3.00 ----0.20 0.30 -----
37
Possible alternative Strategies

Market Penetration
Go after Dell, HP and Microsoft (the Wintel alliance) markets Shares
Market Development
Asia & Europe
New Product development

New consumer electronics products
Related Diversification
Peripherals
Retrenchment
Reengineer to lower cost of goods sold in reaction to commoditization pricing of PC market
38
Recommendations
Strategy 1
Open twenty computer retail stores (not just peripherals and accessories). Apple currently operates stores throughout the United States with only peripherals and accessories for their computers. Adding the hardware should generate more handson awareness and use already established locations. This will increase product accessibility for those who wish to view items other than just accessories and increase awareness of the originality of Apples products. Two percent increase in sales representatives for the computer hardware. Estimated cost of $ 5 million per store = $100 Million Total.
39
Recommendations
Strategy 2
Expand into the Asian market over a five-year period by building a manufacturing facility and headquarters in Hong Kong and expanding sales throughout Asia. Estimated cost $5 billion.
Strategy 3
Add more features to current products including new iPod, Shuffle, and Macintosh enhancements and power. $50 million is the estimated cost for Research and Development.
While it is usually prudent to embark on just one strategy at a time, Apple cash reserves (~$8 billion) and managerial talents (Steve Jobs) makes embarking on 3 strategies at one time is not only possible but recommended.
40
EPS/EBIT
$ Amount Needed: $5,100 M
Strategy 1 & 2
Stock Price: $75 Tax Rate: 26% Interest Rate: 5% (2006) # Shares Outstanding: 842M
41
EPS/EBIT
EBIT Interest EBT Taxes EAT # Shares EPS Common Stock Financing Recession Normal Boom $500,000,000 $1,500,000,000 $3,000,000,000 0 0 0 500,000,000 1,500,000,000 3,000,000,000 130,000,000 390,000,000 780,000,000 370,000,000 1,110,000,000 2,220,000,000 910,666,667 910,666,667 910,666,667 0.41 1.22 2.44 Debt Financing Recession Normal Boom $500,000,000 $1,500,000,000 $3,000,000,000 257,500,000 257,500,000 257,500,000 242,500,000 1,242,500,000 2,742,500,000 63,050,000 323,050,000 713,050,000 179,450,000 919,450,000 2,029,450,000 842,000,000 842,000,000 842,000,000 0.21 1.09 2.41
EBIT Interest EBT Taxes EAT # Shares EPS
70 Percent Stock - 30 Percent Debt 70 Percent Debt - 30 Percent Stock Recession Normal Boom Recession Normal Boom $500,000,000 $1,500,000,000 $3,000,000,000 $500,000,000 $1,500,000,000 $3,000,000,000 77,250,000 77,250,000 77,250,000 180,250,000 180,250,000 180,250,000 422,750,000 1,422,750,000 2,922,750,000 319,750,000 1,319,750,000 2,819,750,000 109,915,000 369,915,000 759,915,000 83,135,000 343,135,000 733,135,000 312,835,000 1,052,835,000 2,162,835,000 236,615,000 976,615,000 2,086,615,000 890,066,667 890,066,667 890,066,667 862,600,000 862,600,000 862,600,000 0.35 1.18 2.43 0.27 1.13 2.42
42
Implementation Issues
Moving production overseas
Unsettling for current workforce MIS Integration problems Change in culture May damage brand (Made in USA) Environmental outlook
New marketing strategies

Paradox of marketing to deficiencies of Wintel platform while becoming cross platform capable
Forward integration issues

Do we have the talent to become direct sellers Cross selling competitors peripherals >> Brand Dilution?
43
Proposed annual objectives (goal) and polices

Double sales revenue in 3 years
1st year 50%, 2 year 25, 3 year 25% Write division polices stating exact gains and marketing approaches to achieve gains
Reduce unit cost of goods sold by 10% annually for next 3 years
Leverage low cost labor overseas
Introduce one new consumer product each year

Provide adequate funding to R&D Provide funding for market research Insure strong communication ties between marketing and R&D
Either provide functional enhancements to existing products each year or obsolesce product
Assign R&D project teams to each existing product Have market research produce product maturity curves for existing products
Create Chief scientist position on Corporate Board to reflect the importance of R&D to Apple Computer
44
Proposed procedures for evaluation

Qtr & Yearly financial reports Track Industry & market Reponses to new product development Balanced Scorecard Yearly strategic meeting of division management and corporate management
45
Epilogue
2006
iPods add Video Content from Disney, ABC, ESPN, SOAPnet Stock soars by 120% iPod morphs to
Shuffle Nano
Goes to Intel Architecture Sales increase by 45% Gross margin increase by 8%
2007
iPhone Sales predicted to increase by 35% Gross profit margin predicted to increase by 8%
46
Current Stock Performance
http://moneycentral.msn.com/investor/charts/charting.asp?symbol=AAPL
47
Resources
Case Notes
Forest David; Francis Marion University
Form 10-K SEC Filing, Sept. 25, 2005 Datamonitor

SWOT Apple 2004 & 2005 PCs in the United States 2005 Consumer Electronics in the United States 2005 Market Watch
Apple: Unix for the people, Unix for the masses 2005
Value line Investment survey

Apple 2007 Computer Peripherals 2007
48
Questions
http://seriouslygood.kdweeks.com/images/apple-question.gif
49

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Apple 2005

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Apple Computer Inc.

2007, Tony Gauvin, UMFK

Possible alternative strategies Our Recommendation

2007, Tony Gauvin, UMFK

2007, Tony Gauvin, UMFK

Sales return, Brand emerges, Innovation rules

Stock price takes off like a rocket!

2007, Tony Gauvin, UMFK

2004 Vision Statement

2007, Tony Gauvin, UMFK

New Product Development

2007, Tony Gauvin, UMFK

2007, Tony Gauvin, UMFK

To become the global leader in computer and digital music products.

2007, Tony Gauvin, UMFK

Apples New Mission

External Audit (Opportunities)

External Audit (Threats)

2007, Tony Gauvin, UMFK

2007, Tony Gauvin, UMFK

Consolidated Balance Sheet

2007, Tony Gauvin, UMFK

Consolidated statement of operations

2007, Tony Gauvin, UMFK

Internal Audit (Strengths)

Internal Audit (weaknesses)

2007, Tony Gauvin, UMFK

Financial Ratio Analysis

Net Income (YTD vs. YTD)

46.1 NA NA 4.35 8.11 39.90

31.6 NA NA 1.88 10.57 26.80

18.8 64.8 17.4 1.48 2.83 12.40

30.3 13.0 9.6 29.1 5.9

20.2 8.5 6.2 20.3 5.8 3.8

47.2 11.9 8.0 47.3 9.4 5.8

2007, Tony4.3 Gauvin, UMFK

Financial Ratio Analysis

17.9 11.6 17.9 6.9 4.4 6.7

34.6 12.0 32.6 17.0 7.1 15.7

15.3 2.7 7.4 11.9 2.0 5.6

90,000 941,000 16.7 73.0 1.4

63,000 1 Mil 12.2 66.8 2.1

29,000 367,000 7.7 7.8 0.4

2007, Tony Gauvin, UMFK

Book Value/ Share $8.94

ROE (%) 17.9

ROA (%) 11.6

2007, Tony Gauvin, UMFK

Apple Stock Performance

2007, Tony Gauvin, UMFK http://moneycentral.msn.com/investor/charts/charting.asp?symbol=AAPL

Apple Net Worth

$ 7,535 $ 6,775 $ 61,610 $ 60,624 $34,136

2007, Tony Gauvin, UMFK

Strategic Analysis Swot Matrix

2007, Tony Gauvin, UMFK

Strategic Analysis Space Matrix

2007, Tony Gauvin, UMFK

Strategic Analysis Space Matrix

2007, Tony Gauvin, UMFK

Strategic Analysis Grand Strategy Matrix

Weak Competitive Position

Strong Competitive Position

Quadrant III Slow Market Growth