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CITY UNIVERSITY OF SCIENCE AND INFORMATION


TECHNOLOGY PESHAWAR

APPLE Inc.

MBA 1.5 years


Dec 3, 2013

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ACKNOWLEDGEMENTS
Praise and thanks to ALLAH Almighty, the one testing us all at all times and making decisions
about what we dont know and cant know.
The assignment being submitted today is a result of collective effort. There are innumerous
helping hands behind who have guided us on our way. Writing this assignment appeared to be a
great experience to us. It added a lot to our knowledge. This assignment is one of our memorable
experiences in student life.
Though words are inadequate in offering thanks to our teacher but we owe our profound
gratitude to Sir Saqib Shahzad for stimulating our creative abilities by assigning this assignment
to us and for her able guidance and useful suggestions, which helped us in completing in time.
Whatever we have learnt from her and this assignment has put indelible impression on our minds
and it is our conviction that this learning experience will always be a source of help in our
practical life and professional career.
Finally, yet importantly, we would like to express our heartfelt thanks to our beloved parents, for
cooperation, help, kindness and blessings, our family and friends for their help and wishes for the
successful completion of the work.

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Table of Contents
1. Executive summary.. 1
2. Introduction.. 2
3. APPLE Inc3
4. Vision Statement... 4
5. Mission Statement 4
6. Values.. 5
7. External Audit. 6
8. SWOT analysis for APPLE Inc.. 7
9. External Audit 10
10. Competitive Profile Matrix.... 11
11. Internal Audit. 12
12. Internal Factors Evaluation Matrix 13
13. SWOT Matrix 15
14. Conclusion 23
15. Recommendations 24
16. References.... 25

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List of Tables and Figuers


1. Model 1: Showing EFE matrix for APPLE Inc 10
2. Model 2: Showing CPM for APPLE Inc.. 11
3. Model 3: Showing VRIO for APPLE Inc.... 12
4. Model 4: Showing IFE for APPLE Inc... 14

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1) Executive summary
Apple Inc. is a technology company, which designs, produces and sells goods of the Computer,
Music and Mobile-phone Industries. It is differentiated by its brand-perception and
identification. Over the last couple of years, Apple has become a cult-brand, thanking itsiLife,
iTunes, Quick Time and iMac lines. Apple Inc.s short-term goals is currently increasing the
sales of the just launched iPad (the most innovative web=browser in market). In the long-run,
Apple aims for the top of the market, becoming the number one leader.
Apple Inc. has incorporated numerous features that are unique and well known in the market
today. We consider that there are several Apple products with several appealing features such as:
iMac, iPod, iPhone and iPad. These products represent a revolutionary era for the development
of Apple. By placing such products in the market, Apple Inc. has attracted a lot of customers in
one way or another. Highly advanced technology, simplicity and design, and the sense of luxury
are the main features integrated in these products. Moreover the comfort and convenience that
these products provide are very crucial.
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One of the main reasons which inspired me to choose Apple Inc. is its unique, simple and
luxurious image that Apple has created in the market over the years. Think differently which is
an inspiring motto, made us believe that simplicity and creativity combined with luxury can lead
to a successful and profitable company, such as Apple. Another component that we found to be
challenging for us was to understand Apples goals, objectives and their secret of being
successful. A very important fact about Apple products today is that these products are globally
spread. This has created among us the idea that Apple products are no longer luxuries but real
necessities due to the technological developments. Moreover, what has motivated us most to
select Apple Inc., is the way we relate ourselves with its products. Each of us being an Apple
consumer has build trustworthiness relationship with the products that this company offers.
Owning an iPod or iPhone today definitely will make your life easy and simple.

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As mentioned above, 2010 came with the launching of the iPad, which is a totally differentiated
product in the market. It is a web-browser, which also can be used as laptop, and can be useful in
every aspect of educational and professional areas. Its price, compared to regular Apple prices, is
pretty affordable ($499), which is an incentive for more buyers to purchase. This is the main goal
of Apple in the current day.

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Introduction
According to Apple Inc is an American multinational organization located in 1 infinite loop,
Cupertino, California 95014, in the middle of the Silicon Valley. It is focused on designing and
developing the personal computers, other related software products, and the electronic products
such as MP3 players and iPods. Apple Incs main products are iMac, iPod, iPhone, and its latest
advanced product is iPad, which is on the verge of creating another revolution after iPhone.
Apple Inc was founded in 1976 and since then Apple Inc has been leading the way in innovating
new products, however it has encountered numerous ups and downs since then. Apple Inc
produced the first ever extremely successful personal computer. It has been always on the
forefront of innovating new products; however it has often struggled to maintain the hold on the
market share in the product line. Lately, Apple Inc has transformed its image from an inventive
computer manufacturer to a fully-fledged consumers electronic company. Some facts of its
success can be calculated from its sales of $13.95 billion in the year 2005. In year 2005, Apple
Inc had controlled 4.2% of the US market in PCs. Also, Apple iPods models had controlled 70%
of the hard drive MP3 player market. Apple Inc enjoys the leading share in the handset market,
generating over 71% of the industrys profit with 6.5% of the international handset market.
Apple unveiled its first iPhone on 9th January, 2007. The most recent iPhone, is iPhone 4S, and
it

was

announced

on

4rth

October,

2011

and

was

released

10

days.

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APPLE Inc.
According to Apple has to be one of the greatest success stories of all time. The beginnings of
Apple started with Wozniak assembling a simple built computer machine. It was in the summer
of 1971 Wozniak 21 and Jobs 16 were introduced to each other by a mutual friend Bill
Fernandez. Wozniak had shown Jobs his simple built computer machine and this impressed Jobs
to the point Jobs believed he could sell it for a profit. It was here they would form a strong
friendship because they not only shared a passion for computers, but because they were both
known as outcasts and for the first time they had a great understanding, admiration and respect
for each others abilities, personality and intellect. They would begin the Apple project by selling
some of their possessions: Wozniak's HP scientific calculator and Jobs' Volkswagen, they raised
$1300 and assembled their first prototypes in Jobs bedroom. When the project became too big
for the bedroom they moved the project into Jobs family's garage, it was on a huge wooden work
bench that served as their first manufacturing base. The computers were hand built by Wozniak
and first shown to the public at the Home brew Computer club. After selling a number of the
machines Apple was established on April 1, 1976 and went public on December 12, 1980.
Apple has maintained its great success with its ability to understand what the consumer wants
before the consumer even knows what they want; Apple effectively creates wants by their
constant creative innovation and unique design which is stylish, user friendly and affordable.
They have also been able to create a brand in the high technology world just as Chanel has in the
fashion world. People can easily recognize an apple whether it's the I-Pod, the I-Phone, the Mac
Air or the I-Pad. It has become a product that defines one's identity in how they desire to be seen
by society that is a person who is highly innovative, intelligent, stylish and apart of the in crowd.
This is pure marketing genius. This marketing genius of Apple has seen this company
outperform beyond the business world's expectations. While so many companies are struggling
to break even in the current recession Apple is getting stronger by the day.
Apples Most Successful Products and Services

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iPhone 4, iPad&iPad 2, iPhone, iTunes, PowerBook G4, iPod, OS X, iMac, Quick time, Mac,
Apple II.
PRODUCTS and SERVICES
Apple Store, Mac, iPod, iPhone, iPad, iTunes.
Other Products and Services
Desktops, Xserve, Notebooks.

Vision Statement
It is especially important for managers and executives in any organization to agree on the basic
vision that the firm strives to achieve in the long term. A vision statement shouldanswer the basic
question, What do we want to become? A clear vision provides thefoundation for developing a
comprehensive mission statement .

Vision Statement of APPLE


"Man is the creator of change in this world. As such he should be above systems and structures,
and not subordinate to them."

Explanation of APPLEs vision


According to (Hamilton, 2011) Apple lives this vision through the technologies it develops for
consumers andcorporations. It strives to make its customers masters of the products they have
bought. Appledoesn't simply make a statement. It lives it by ensuring that its employees
understand thevision and strive to reach it. It has put systems in place to enable smooth customer
interaction.
It has put objectives in place to continuously move forward; implemented strategies to fulfill
these objectives; and ensured that the right marketing, financial and operational structures are in
place to apply the strategies.

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Mission Statement
What is our business? is synonymous with asking the question What is our mission? An
enduring statement of purpose that distinguishes one organization from other similar enterprises,
the mission statement is a declaration of an organizations reason for being. It answers the
pivotal question What our business? A clear mission statement is essential for effectively
establishing objectives and formulating strategies.

Mission Statement of APPLE


Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork,
and professional software. Apple leads the digital music revolution with its iPods and iTunes
online store. Apple reinvented the mobile phone with its revolutionary iPhone and App Store,
and has recently introduced its magical iPad which is defining the future of mobile media and
computing devices.

Mission Statement Analysis for APPLE Inc.


According to apple is mainly focusing at the following components of mission statement:
1. Apple may not be important to elaborate on its concern for its employees or to thoroughly
outline its customers and targeted market. Apple is a trendy technology company which prides
its self in providing easy to use electronics and efficiently run software systems. Because of this
it is most important for Apples mission statement to focus on components like company
philosophy, self-concepts, and current technologies. These aspects of Apple are what make it
popular and successful today.
2. Apple ignited the personal computer revolution in the 1970s with the Apple II and reinvented
the personal computer in the 1980s with the Macintosh. Today, Apple continues to lead the
industry in innovation with its award-winning desktop and notebook computers, OS X operating
system, and iLife and professional applications. Apple is also spearheading the digital music
revolution with its iPod portable music players and iTunes online music store.
3. Apples mission statement only includes descriptions of products and services and past and
present technologies.

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4. The mission statement from Apple is somewhat unconventional. Its more of a brief history
rather than a summary of the corporations overall purpose. It does however paint a picture of
where Apple came from, how far it has come, and where its continuing to go. But for such a
popular company it may be beneficial divulge into points like its self-purpose and their
concernfor public image.

Values
As stated in (appleinvestor, 2012) Apple Values are the qualities, customs, standards, and
principles that the company believes will help it and its employees succeed. They are the basis
for what they do and how they do it. Taken together, they identify Apple as a unique company.
These are the values that govern Apples business conduct:
Empathy for Customers/Users
Aggressiveness/Achievement
Positive Social Contribution
Innovation/Vision

Individual Performance
Team Spirit
Quality/Excellence
Individual Reward
Good Management

External Audit
The purpose of an external audit is to develop a finite list of opportunities that could benefit a
firm and threats that should be avoided.

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External Analysis for APPLE Inc.


External environment determines the present situation of Apple Inc., and also helps find out the
possible influences of the political, economical, and social and the technological factors on the
organization.

PESTL Analysis for Apple Inc.


Political Factors
As stated in Apple Inc. has reportedly obtained 52% of its business from outside US in 2007.
Due to the bad international relations, wars and terrorism might influence Apple Inc. in a huge
way, and also the organization has no control over these factors. Apple Inc. manufactures a
number of its parts and products from outside the US, like Czech Republic, Ireland, China,
Korea and Cork. The bad political relations between US and the other world have bad outcomes
for the Apple Inc.

Economic Factors
By the (Apple Inc., 2012) The global economic crisis had huge impact on Apple Inc. The
inflation rate went high and so did the unemployment rate in the country, and since Apple Inc.
products were viewed as luxury products, the customers started pending less on them. US dollar
value keeps fluctuating, and thus again which have a bad impact on Apple Inc. products,
however the company has purchased itself foreign currencies and thus, the economic effects on
the company are minimized. Thus, Apple Inc. revenue has increased in the global market.

Social Factors
Throughout the history of Apple Inc., two factors have been on the forefront of Apple Inc.
products, the quality and the design of the product. Thus, globalization plays a very important
role in Apples products. As the world cannot be imagined without the gadgets, thus Apple
products have marked their presence on the international market. Also, as the purchasing power
of the common has risen in various markets across the world the purchasing of luxury products
have gone up, for e.g. the iPhone, iPods and the latest technology iPad. Possessing these items is
considered as status symbols in many societies which have also increased the sales of Apple Inc.
products. Another big social influence to Apple Inc. products is the rapid growth of the music
industry, which have increased markets over the cyber space as well. The main virtual music

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store is the iTunes. Thus, in all Apple products have benefitted from the social factors as it has
begun defining a modern individual lifestyle.

Technological Factors
Apple Inc. has invested largely in its product research and development field and thus, Apple
products are at the top of the new innovative products ranking. Apple Inc. has invested largely in
its product research and development field and thus, Apple products are at the top of the new
innovative products ranking. The technology has been fast changing in the world and the market
for it has become gigantic, which has added to more and more competition and thus, as soon as
technological change are concerned the product life cycle has been shortened drastically, which
the Apple Inc. takes the advantage of by introducing newer products in the market, which
ultimately lead the market.

Legal Factors
Nokia has filed various lawsuits against Apple Inc., claiming the violation of 13 additional
patents by iPhone, iPad and iPod touch, this apart from US complains covering 24 Nokia patents.
Also, in China Apple Inc. has been fighting the battle for its right to the iPad trademark.

SWOT analysis for APPLE Inc.


SWOT analysis stands for Strength, Weakness, Opportunity and Threat for a particular
organization, which can help in formulating a strategy for its business and can also help in
analyzing its internal environment (Strengths & Weakness) and external environment
(Opportunities & Threats).

Strengths
According to first and foremost strength of Apple Inc. is its technological edge over its
competitors. IPhone have turned out to be a great success and has been associated with status in
many of the countries. ITunes has turned out to be a wonderful revenue generating source and
since it also sells with its own tool i.e. the iPod, thus, revenue has multiplied for Apple Inc.
Another strength for the organization is that for every software that Apple Inc. produces, it
introduces its hardware with it too, which leads to its expertise in both the industries. Apple Inc.
products are classified as luxury items, thus its products provide enough room for it, so that the
competitor products are no longer a competition. The another strikingly advantage over

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competitors products, is the design of the Apple products, and which are also simple to use. The
brand loyalty of its product and its super dedicated research and development department are
also its major strengths.

Weaknesses
Weaknesses are the disadvantages that are hindrance in obtaining the business goals for the
organization. The poor relationship with the market than Microsoft is surely a disadvantage to
Apple Inc. Another point could be that the products introduced by Apple Inc. have very short life
cycle, which concludes that the research and development department has to be constantly
maintained, which requires huge capital. Apple Inc. has very low presence in the advertisements,
and also it has very small market occupation as compared to its main rival Microsoft. Thus, all
this leads to the fact that Apple Inc. gets very less business from its home country US, and major
of its business is from outside the US.

Opportunities
According to Opportunities can affect both the present as well as the future condition of an
organization. Apple Inc. opportunities are the introduction of more and more PC viruses, on
which Apple Inc. can capitalize on. The second opportunity is the population of the world is
growing at a rapid pace and thus, this opens the front for many new markets, also the purchasing
power of a common man has increased drastically, who can be pursued or impressed to buy the
luxury Apple products. The online sales of the organization are increasing and also, the bonds
and the partnership with the other organizations have been on the rise in the past few years.
Products such as iPhone have create a new set of potential customers altogether which can be
targeted in the future i.e. the young population who have a craze for any new technology.

Threats
In the past few years, many competitors have come up for Apple Inc., especially in the field of
laptops, like Dell, Sony, HP, and Toshiba. Another threat could be that many of the customers
have started downloading the music for free instead of purchasing at iTunes. The product
expensiveness is itself a threat to the product, as substitutes at a lower price are always available.
Long lasting recession could also be a threat to its products. Windows 7 software is gaining more
market place after vista flopped and last but not the least, the technological advances that have
been taking place every single day, is a big threat to Apple Inc.

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External Audit
An External Factor Evaluation (EFE) Matrix allows strategists to summarize and evaluate
economic, social, cultural, demographic, environmental, political, governmental, legal,
technological, and competitive information .

External Factors Evaluation (EFE) for Apple:


EFE Matrix

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Model 1: Showing EFE matrix for APPLE Inc.

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1. Competitive Profile Matrix


The Competitive Profile Matrix (CPM) identifies a firms major competitors and its particular
strengths and weaknesses in relation to a sample firms strategic position.

a. CPM for APPLE Inc.

Model 3: Showing CPM for APPLE Inc.

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Internal Audit
All organizations have strengths and weaknesses in the functional areas of business. No
enterprise is equally strong or weak in all areas.

Internal Audit for APPLE Inc.

Internal Environment
VRIO framework
The VRIO framework can be stated as the value, rarity, Imitability, and organization as a whole.
VRIO framework is extremely important for the internal analysis of Apple Inc organization.
Resources and
Value
Rarity
Competencies
Brand Name
Yes
Yes
Simplicity
Yes
No
Hardware
Yes
No
Software
Yes
No
Model 4: Showing VRIO for APPLE Inc.

Imitability

Organization

Yes
No
Yes
No

Yes
Yes
Yes
No

Competitive
Advantage
Sustained
Parity
Temporary
Parity

The above figure shows the VRIO framework for Apple Inc. For gaining competitive lead over
its competitors Apple Inc should explore its internal as well as the external advantages, its
internal advantages that Apple Inc paid attention to on developing iPhone, are its brand name,
advanced technology, and effortlessness of using the user interface .

Value

The value of iPhone is that there are a number of advantages, like the highest technology, the fast
and the easy usage, that the user can carry, all in one device when he/she purchases the iPhone.

Rarity

The technology that has been used in making of the iPhone is rare and unique, which is why it
has a unique design, quality, easy to use and is also a status symbol among the youngsters
however, it has been experiencing slow internet connection and call dropping problems, which
can make Apple Inc lose some customers, which was found to be a problem in the chip that

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handled the call operations, meanwhile the publicity and status of owning an iPhone will keep
the customers intact.

Imitablity

The iPhone is nearly not imitable, however there are some phones available in the market which
provides some of the features same as that of the iPhone, also, the companies which have seen
the flaws in the iPhone development can refrain from committing it and thus can come up with
better designs, which can be a threat to Apple Inc. For e.g. Google has released its phone TMobile G1, which can be a competition to iPhone in the future.

Organization

Apple has tried its best to maintain its brand name and has been successful in doing so and thus
is its biggest competitive advantage, however its flawless designs and quality are still replicable
in the future and thus Apple should take advantage of applications market, however as with
iTunes which were the best and easiest music application, same approach would not work with
iPhone.
Thus, Apple holds a huge and stable market however it constantly needs to update on its methods
and technologies to grow further.

2.

Internal Factors Evaluation Matrix

A summary step in conducting an internal strategic-management audit is to construct anInternal


Factor Evaluation (IFE) Matrix. This strategy-formulation tool summarizes and evaluates the
major strengths and weaknesses in the functional areas of a business, and it also provides a basis
for identifying and evaluating relationships among those areas.

a. IFE for APPLE

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Key Internal Factors

Weight

Rating

Weighted Score

Strengths
iTunes Music Store is a good source of
revenue, especially with the iPod and
the availability on Windows platform.

0.15

0.60

Apples niche audience provides the


company with some insulation from
the direct price competition.

0.10

0.30

Revamping desktop and notebook


lines.

0.10

0.30

Low debtmore maneuverable.

0.06

0.24

Developing own software and


hardware.

0.14

0.42

Good brand loyalty.

0.05

0.15

Web technology can be used to


improve product awareness and sales.

0.10

0.40

Dependency on new product launches.

0.06

0.06

Weak presence in business arena.

0.07

0.07

Slow turn around on high demand


products.

0.03

0.06

Weak relationship with Intel and


Microsoft.

0.10

0.10

Weak presence in markets other than


education and publishing.

0.04

0.08

Total

1.00

Weaknesses

Model 5: Showing IFE for APPLE Inc.

2.78

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3.

SWOT Matrix

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Matrix is an important matching tool


that helps managers develop four types of strategies: SO (strengths-opportunities) Strategies,
WO (weaknesses-opportunities) Strategies, ST (strengths-threats) Strategies, and WT
(weaknesses-threats) Strategies .
a. SWOT Matrix for APPLE
S-O Strategies

Increase awareness through the web of the immunity of Mac products to worms and
viruses. (S5, O1)

Advertise using individuals that will link Generation X & Y to the iTunes and other
related products. (S1, O2, O4, O5, O6)

Using movies and music groups that are geared towards Gen X and Y to promote
computers and laptops. (S3, S5, O2, O5, O6)

S-T Strategies

Increase and promote the compatibility to Window operating system. (S5,T1)

Promote the originality of Apple computers and the different style and stable system that
is slightly more but worth the price difference in style, stability and speed. (S2, S5, T2,
T4, T5)

W-O Strategies

Increase ties with Microsoft and Intel and their products.(W1, W2, W4 O2, O3)

Promote to business the safety of having a worm and virus free computer by using Mac.
(W2, W4, O1, O5, O6)

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W-T Strategies

Improve relationship with Microsoft and Intel so that companies will see them as
compatible. (W1, W2 T1)

Increase productivity and turn around of high demand products to compete with Dell and
HP (W5, T2)

4.

Conclusion

It is concluded from the strategic management analysis at APPLE Inc. that technological
industries are never easy to compete with. They have a lot invest at R&D and have to be
proactive in order to compete with their competitors in the industry. As for APPLE is concerned
they have been working so well as it is shown form their products. As Apple Inc. is increasing
also, those other businesses are increasing and trying to do something interesting for their own
good. APPLE needs to make a drastic change. They dont need to wait for people buy their
products only when they are on sale but they need to focus more on the customer support and
improve the areas they already have problems.

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5.

Recommendations

Strategy 1
Open six computer retail stores (not just peripheral and accessories). Apple currently has stores
opened throughout the United States with only peripheral and accessories for their computers.
Adding the hardware should generate more hands-on 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. 2 percent increase
over the next 2 years in sales representatives for the computer hardware.
Strategy 2
Contract music spokesperson to attract the upcoming generation who are attending high school
and college. This will invoke a sense of style and linking apple with a distinctive and memorable
top 10 hit. This will stay in the customers awareness and influence future purchase decisions.
Contracting one music spokesperson estimated $6 million.
Strategy 3
Add more features to current products for greater Wintel compatibility. Features such as iTune
software compatible with windows based computers, Office programs loadable from PC
installation disk (This would require a software agreement with Microsoft). In late October 2003
Apple released an iTune software package that is PC ready. It will increase the United States
market share at least 30 percent for the next 2-3 years. $50 million is the estimated cost for
Research and Development.

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6.

References

1. David, F, Strategic Management Concepts 13 edition, Pearsons, 2011.


2. http://alvinalexander.com/blog/post/mac-os-x/apple-business-philosophy-missionstatement
3. http://writepass.co.uk/journal/2012/12/strategic-analysis-swot-and-bcg-matrix-of-appleinc/
4. http://blogs.hbr.org/fox/2013/01/apple-versus-the-strategy-prof.html
5. http://www.strategicmanagementinsight.com/swot-analyses/apple-swot-analysis.html
6. http://investor.apple.com/secfiling.cfm?filingID=1193125-12-444068
7. http://tech.fortune.cnn.com/2012/11/01/by-the-numbers-apples-fiscal-2012-annualreport/
8. http://www.apple.com/supplierresponsibility/pdf/Supplier_Code_of_Conduct_V3_1.pdf
9. http://myassignmenthelp.info/assignments/marketing-assignment-essay-writing-analysisreview-online-apple-swot-pestle-analysis/