Apple Computer Inc.

Case Analysis

iLife. Power Mac G5. Final Cut Pro ‡ Over 130 Apple Retail Stores in 31 states . iMac. MacBook Pro.Company Overview ‡ Apple Computer Inc. Mac mini. networking solutions. software. iPod. is designer and manufacture of personal computers. peripherals.4 Tiger. and music players ‡ Products include: ± MacBook. Xserve G5 ± OS X 10. iTunes.

. ‡ Apple is also spearheading the digital music revolution with its iPod portable music players and iTunes online music store. and iLife and professional applications. OS X operating system.Mission Statement ‡ Leads the industry in innovation with its award-winning desktop and notebook computers.

light ‡ Easy to carry ± Apple is the oldest hardware manufacturer ± Control over the product by manufacturing both computer and their OS . Small.Apple SWOT Analysis ‡ Strengths ± ± ± ± ± ± ± 54% of Apple Profits are in foreign markets Knowledge of customer base High Quality Products Brand Name Innovation Product Diversification Easy use product ‡ Attractive.

Apple SWOT Analysis ‡ Weaknesses ± Quality Product control ‡ iPod Nano may have a faulty screen ‡ Faulty ipod batteries ± High Price ± Poor leadership ± Internal engineering focus rather than a market focus ± The Scare of LBO ³Leveraged Buyout´ ± No Dividends .

.Apple SWOT Analysis ‡ Opportunity ± Enlarge target market with new product ³Nike´ ± Integration with other products ³ Cars´ ± The use of Intel chips ‡ The Intel chip allows the new machines to run the Windows Operation System ‡ Threats ± High level of competition in the technology market ± High product substitution effects ± Developing iTunes and music player technology into a mobile phone format.

533 Dept/Equity 0 EPS 1.40% ROE 22.98 Dividend payout 0 P/E 32.04 B Current Ratio 2.45 .Financial Ratio Analysis ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ Profit margin 9.90% Gross Profit 4.97% (2006) ROA 11.

Solutions/Future Outlook ‡ Apple can expect a prosperous future ± Steady increase in sales net earnings over the past 5 years ‡ Almost 200% sales increase from 2004-2005 -Over 80% market share in iPods ‡ Must continue to develop and acquire new strengths ± I. high quality products.e. Innovation. good marketing plan ± Threat of substitution/competition is decreased .

Solutions/Future Outlook ‡ Must minimize number of faulty components of its products ± Increase R&D efforts ± Maintain customer loyalty ‡ Decrease prices ± iPod ranges from $300 to $400 ± Mac desktop starts at $1300 ± Result in gaining new customers ‡ Pay dividends ± Stopped paying in 1995 due to 2 for 1 Stock Splits ± Competitors haven¶t been paying ± Improve stockholder loyalty .

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