SUN MICROSYSTEMS CASE A

What is Sun's product strategy? What are the historical performances of Sun and Apollo during 1986 and 1987? (Exhibits 6 & 7) Please fill in the table below. Sun Apollo Sales in 1985 $33.7 mil $55.2 mil Industry slump in 1985 caused sales in 9/85 to decline: 6/85 9/85 1985 Sales mil mil 1986 Sales In 3/87 Sales 6/86 mil mil Sun 12/86 Sales growth Gross margin R&D as % sales Profit margin Total Use/Funds Operations % % % % % 3/87 % % % % % 1/87 % % % % % 9/86 mil

6/85 mil 6/86 mil mil Apollo

9/85 mil 9/86 mil

3/87 % % % % %

Who are Sun's competitors? What is Sun's financing strategy? • What have they issued so far? • How does Sun compare to Apollo? Why is Sun growing so fast? How did Sun deal with problem of getting enough capital? Referred to as “Capital Conservation Strategy" What is happening May 1987? • What is their pricing strategy with new technology? • What happens to the old technology? What is the issue/problem of the Sun case?

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