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1. What are the chief elements of Apple’s overall competitive strategy? How well do the pieces fit together? Is the strategy evolving? Apple Corporation, Capital requirement degree of completion, Brand identifies the product price; demand, and the apple users. Supplier power, Barriers, Rivalry, Treat of Substitutes, and Buyer Power represents Apple’s overall competitive strategy. Music, Internet, and Computer is an n innovation for long term development, technological improvement with a unique design, it transcended the barriers of computer industry to cross many aspects of industries such as itunes, ipod, and iphone. It’s evolving due to a loyal customer base and ambitious leadership. 2. What are the key elements of Apple’s strategy in computers, personal media players, and smartphones? Have its strategies in its core businesses yielded success? Explain. Product diversification and innovation for long term development (music, internet, computer). Integration of software and hardware, technological improvement with a unique design, and transcended the barriers of computer industry to cross many aspect of industries (itunes, ipod, and iphone). 3. What does a competitive strength assessment reveal about Apple’s computer business, as compared to the leaders in the personal computer industry? Use the methodology in Table 4.2 to support your answer. Does it appear that the company’s competitive positions in personal media players and smartphones or stronger or weaker than its position in computers? Apple’s current success and industry position are unparalleled. Steve Jobs’ “digital hub” continues to grow and Mac sales are increasing too. The stock price continues to rise, the devices are constantly improved, and Apple’s presence is almost tangible. Steve Jobs has really done wonders for Apple. Going forward, margins will fall as prices come down in response to wornoff novelty, but costs of goods sold are coming down, too, so it’s difficult to predict how much margins will fall. For now, Apple is secure in industry
smartphone. above all else. we cannot be sure that Apple will maintain this. Apple must. which is demonstrated in the financials. but they have their own level of convenient for each. too. The competition is going to drive them to do be better because they have to stay out of reach.position.But. and tablet computer industries? Are the value chain activities that Apple performs in computers. Does it make good strategic sense for Apple to be a competitor in the computer. 4. monitor their competition. Cliff). digital music player. Apple also has to remain the technology leader. even those that have previously been PC-loyal. Based on this explanation it can be determined that Apple is utilizing a “broad differentiation” strategy to stay competitive in its industry. Smartphones will be most important to Apple future due to the demand and the convenience. Basically. tablet computers and smartphones very similar and “compatible” or are there very important differences from product to product? Which of the four products lines---computers. or smartphones---do you think is most important to Apple’s future growth and profitability? Why? Yes. they will maintain their place in the industry. the company’s market value went from $72. To be a competitor in the computer.900 to $189. Apple provided a specific strategy based on a generic one that was just used as a guide. tablet computers. . personal media players. though.917. From 2006 to 2009. personal media players. with stiff competition and different variables within the industry. generic strategies should be used as a tool to help form a solution instead of being the solution itself. Apple must used to be just in the personal computer and software industry and also utilized its strengths and expanded its business to the entertainment industry. Apple’s current strategy is to “bring to its customers compelling new products and solutions with superior ease-of-use. Apple introduction starting from digital music players (iPod) and online music service (iTunes) in 2001 and it’s another introduction of mobile phones (iPhone) in 2007. Yes. seamless integration and innovative industrial design”. innovative technology that appeals to everyone. Apple worked very hard to get to where they are and they will have to work hard to stay on top. personal media player. They have to be proactive in continually developing new. By doing these two things and managing the business end well. the value chain activities are very similar. According to Bowman (Bowman. and mobile phone industries.
These new products had a huge hand in the financial recovery. It is not a good for Apple Inc. to measure the number of inventory per year because inventory turnover is low. the ratio is consistently increased in 2005. as Apple continued to lose market share in the PC market. has higher creditworthiness and good balance sheet strength. For inventory turnover ratio. These ratios measure the return on total investment in the enterprise. we can see the differences of ratios in Apple.6 % in 2006.The percentage for the both three years is 11.But in 2007. In their gross profit margin. So the higher percentage is better than and the trend should be upward. But in 2007.9% . is consistently gained the profitability of the current operation. ratios showed that profit margin are decrease from 40. Inc. We take a look for return on stockholders (ROE) equity for 2005 is 17. financial statistics from 2005 until 2007. The PC market is rapidly . for the two year are almost remain the same that is 11.8%. Inc.8%.5% in 2005 and it showed a little increase to 11. the numbers of inventory turnover ratio were decreased to69.4%. The debt-to-equity ratio in year 2005 and 2006 is remaining the same which is 0.10%. What is your assessment of Apple Computer’s financial performance the past three years? (Use the financial ratios in Table 4.8 % in 2006.1 on pages 94-96 of the text as a guide in doing your financial analysis. 2006 is19. 2006 and 2007. the company recovered fully with the introduction of non-PC products. Inc.7% and 18. This was proving that Apple. However. Apple has had mediocre performance in the PC industry.4% in 2005 which is decrease a little to71. These ratios show that Apple Inc.4% and this percentage is the highest compare to 2005 and 2006. But in 2007the ratio were increased to 13. For operating profit margin. so did debt.) Based on the ratios.5% in 2006. state 84. The return on total assets (ROA) for Apple. But in 2007. 12.08%.9% in 2005 to 40.9% while for the 2007 it increase to 24. and the threat of bankruptcy in1996 led Apple to transform into Apple Inc rather than Apple Computer. As a whole.1% which mean the return on stock holders earning on their investment.5. as sales increased. the ratios of debt-to-equity were increase to 0. Sales significantly increased from the mid-80’s to the mid-90’s. At this time. the gross profit margins were increase to 51.4%. Apple Inc.
8% but after that in 2007 it increase 0. . designs it through its own resources and funding. Apple has been able to perfect the chain of activities in innovation. This current ratio shows that ability of Apple Inc. In 2005 Apple Inc states revenue growth 68.0%. as did the rest of the industry. as given in Exhibit 1a of the case.0%. Apple starts from its new ideas of product design. as has every other indicator of financial strength.9% which is 1. aim for more interaction with customers. new product development in the PC arena) often did not pan out profitably. the changes that they made to their products. and loosen the closed ecosystem approach. Total revenue has increased dramatically. then manufactures it and finally markets it wholeheartedly For the current ratio. A significant strength for Apple is the value chain. state 2.3% and its decrease consistently in 2006which is 38.9%. Apple maintained profitability because their product was distinct enough to establish a loyal following.7% and also decreases for the 2007 to 24. make the iMac more compatible and easier to operate. and Apple at times was too slow to respond and did not anticipate the abilities of their competitors. Steve Jobs has led the company to a new level of success.From the analysis in overall financial ratios. they used their capabilities to consistently change their strategy. R&D as percent of sales of Apple Inc remains the same in 2005 and 2006 which is 4.3%. 6. Apple has done a fantastic job.7% in 2005 and it decreased to 1.to pay current liabilities using assets that can be converted to cash in the near term. In 2002.changing. the company suffered. . strategically. Meanwhile. Since 2001. That means income that a company gains from its business activities are not good.But in 2007 the percent of R&D sales decrease to 3. while maintaining their true Mac identity has done wonders for the company. The new OS. Apple computer’s financial performance for the past three years are all remain that have much more differences in the ratio changes. What recommendations would you make to allow Apple to strengthen its position in its most important markets? What steps should it take to ensure that the iPad becomes a success in the marketplace and a major contributor to the company’s overall performance? Collaborate with more technology related industries and companies. Their efforts to act proactively (alliance with IBM. Of particular interest is the continually increasing net sales. Apple Inc.
Although Apple didn't create the first digital music player they held 73 percent of the market shares. They also used the hit-and-run tactics. They continued to make the phones better by creating the iPhone 3GS and then the iPhone 4. Apple had put very strict restrictions on their programs which made it hard for software developers get Mac at a discounted price. They then created the App Store that allowed their customers to build their own applications. What are the key elements of Apple’s strategy in computers. they offered a valuable product at a lower price. They used the cost-based advantage to beat their competitors. They would also market the next generation of products that helped them Leapfrog their competitors and they continually produced new product innovations that drew more sales and market shares from their rivals. and smartphones? Have its strategies in its core businesses yielded success? Explain. personal media players. This continued to help their sales and build their business success.000 in the first 30 hours. Apples computer sales started out slow because of their high price and learning curve to use the operating system. The sleek style. . The iPod or iPhone helped boost their computer sales. There shares dramatically increased when they created the Macintosh computer and when the K-12 schools chose to use them because of the graphic capabilities.Case Study 10 Assignment Case 10 Questions: 1. ease of use and decrease in price gained more satisfied customers that the rivals could not keep up with the competition. When Apple created the iPhone they sold more than 270. using promotional activities to surprise their rivals. What are the chief elements of Apple’s overall competitive strategy? How well do the pieces fit together? Is the strategy evolving? Apples overall competitive strategies were well fit for their industry. Even though they had some setbacks they kept bringing new products to the market while keeping their technology a secret from their rivals. 2.
4. The value chain in each of the companies were very compatible. Does it make good strategic sense for Apple to be a competitor in the computer. and tablet computer industries? Are the value chain activities that Apple performs in computers. tablet computers and smartphones very similar and “compatible” or are there very important differences from product to product? Which of the four products lines---computers. printers and financial services. personal media players.2 to support your answer.3. Acer grew to be too largest fastest growing company in Europe and Africa. low priced computers as does Dell would help them significally. . Their multi-brand strategy also helped them to become the fastest growing vendor in the United States. or smartphones---do you think is most important to Apple’s future growth and profitability? Why? Yes. Dell also had high sales in computers. I do think that Apple does have a good strategic plan to be a competitor in the industry. tablet computers. personal computers. as compared to the leaders in the personal computer industry? Use the methodology in Table 4. low priced models to fancy high priced models. Apple does very well in each of their products however they could use to be more competitive with the type of computers they sell. They also brought in high end smartphones. They began to offer a wide range of computers from low end. personal media player. Then their customers started to prefer the portable computers over desktops. The strong price competition also hurt Dells sales. their sales declined during the next recession. personal media players. They had a winning business model. smartphone. offering more of a variety for the different income/salary ranges. I think that Apple had a better success rate with their smart phones and personal media services. a competitive products and innovative marketing sales. Making low end. However. and they too suffered during the recession. having high revenues. Does it appear that the company’s competitive positions in personal media players and smartphones or stronger or weaker than its position in computers? Although Apple came back boosting their computer sales HP was diverse in their software. What does a competitive strength assessment reveal about Apple’s computer business.
6.810 3.5.) Income Statement Data: 2009 2008 2007 Net Sales 36.704 4.745 Net Income 5.496 Based on the income statement data Apples net sales increased and its net income continued to grow each year that they continue to do well in the industry.1 on pages 94-96 of the text as a guide in doing your financial analysis.834 3. What is your assessment of Apple Computer’s financial performance the past three years? (Use the financial ratios in Table 4. .482 4.537 32.479 24.006 Cost/Expenses 5. What recommendations would you make to allow Apple to strengthen its position in its most important markets? What steps should it take to ensure that the iPad becomes a success in the marketplace and a major contributor to the company’s overall performance? I would recommend that Apple increase their ability to provide a wide variety of computer products and make them more user friendly to the user plus lower the cost.
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