Think Different

Report onApple Inc. :Performance in a Zero-Sum World Economy

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Table of Content
Page no.
About Apple Inc. 03
Current performance of Apple3-4
Mission and Vision statement.05
Growth strategy05
Corporate governance..06
Top Management.06-07

Environmental scanning:
External Environment Analysis ..07 -09
Industry environment.09-11
Summary of external forces 11
Internal Environment12-19
Core Competencies 20-21
Summary Of Internal forces...22

Analysis of strategic factors:

SWOT analysis...22-23
IFAS24-25
EFAS26-27
TOWS Matrix.34-35

Identification of strategic issues36

Strategic alternatives and recommendation36
Evaluation and control..37

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About Apple:
Apple Inc. is an American multinational technology company headquartered
in Cupertino, California, that designs, develops, and sells consumer electronics, computer
software, and online services. Its hardware products include the iPhone, smart phone, the
iPad tablet computer, the Mac personal computer, the iPod portable media player, the Apple
Watch smart watch, and the Apple TV digital media player. Apple's consumer software includes
the mac-OS and iOS operating systems, the iTunes media player, the Safari web browser, and
the i-Life and iWork creativity and productivity suites. Its online services include the iTunes
Store, the iOS App Store and Mac App Store, and iCloud.
Apple was founded by Steve Jobs, Steve Wozniak, and Ronald Wayne on April 1, 1976, to
develop and sell personal computers. It was incorporated as Apple Computer, Inc. on January 3,
1977, and was renamed as Apple Inc. on January 9, 2007, to reflect its shifted focus toward
consumer electronics. Apple (NASDAQ: AAPL) joined the Dow Jones Industrial Averageon
March 19, 2015.

1. Current Situation: Current situation of Apple Inc. is given below:

A. Current Performance of Apple:
Apples net profit grew 37 per cent to $18bn, topping ExxonMobils previous quarterly record of
$15.9bn in 2012, according to S&P Dow Jones Indices.
Sales of the iPhone leapt 46 per cent over the previous year in the crucial holiday shopping
quarter, driven by the highest number of first-time buyers since the smartphone launched in
2007. Analysts say the performance brings Apple close to reclaiming its title from Samsung as
the worlds largest smartphone maker by volumes.
First-quarter revenues at the company, now valued at $650bn by investors, grew 30 per cent
year-on-year to $74.6bn. Earnings increased by 48 per cent to $3.06, well ahead of analysts
estimates. For a company of our size that is not a small feat, said Luca Maestri, chief financial
officer.

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Overall sales in the Americas grew 23 per cent to $30.6bn, with the US up 26 per cent.
Apples gross margin rose 2 percentage points to 39.9 percent; its highest in more than two
years. However, the iPad remained a weak spot, with unit sales dropping 18 per cent to 21.4m, as
Apples tablet computer faces growing competition from cheaper devices and existing customers
delay upgrading.
For the quarter ending in March, Apple said it expected between $52bn and $55bn in revenues,
with a gross margin of 38.5-39.5 per cent.
Apple is providing the following guidance for its fiscal 2016 first quarter:

revenue between $75.5 billion and $77.5 billion

gross margin between 39 percent and 40 percent

operating expenses between $6.3 billion and $6.4 billion

other income/(expense) of $400 million

This statistic shows Apple's net income, also called net profit, generated in the company's
financial years from 2005 to 2016. In the 2007 fiscal year (October 2006 to September 2007),
Apple's net income amounted to approximately 3.5 billion U.S. dollars. By 2013, this figure was
up to more than 37 billion.

Apple Inc. Mission Statement:

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Apple's current mission statement is "Apple designs Macs, the best personal computers in the
world, along with OS X, life, work and professional software. Apple leads the digital music
revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone with its
revolutionary iPhone and App store, and is defining the future of mobile media and computing
devices with iPad."
It is radically different from Steve Jobs' original ideals, which are encapsulated in his mission
statement: "To make a contribution to the world by making tools for the mind that advance
humankind." This reflects Jobs' ethos and statements from his family members after his death
that what satisfied him most was watching kids use Apple products in the classroom.

Apple Inc. Vision Statement:

Apples vision statement is considerably detailed and reflects the companys comprehensive
approach in ensuring continued growth and success. For instance, the vision statement
enumerates a number of major points, such as the emphasis on innovation, which directly relates
with Apples rapid innovation strategy. In addition, the vision statement specifies simplicity,
which is also an integral aspect of the companys approach to product design and development.

Growth Strategies and Policies of Apple Inc.:

Apples generic strategy and intensive growth strategies directly relate to the companys
strategies in pricing, marketing, and other areas of the business. As one of the most valuable
companies in the world, Apple shows that its generic strategy is a major determinant of
advantage against other firms like LG, Samsung, and BlackBerry. Also, Apples intensive
strategies for growth support the firms ability to maintain its strong position in the global
market. With a high rate of innovation and emphasis on excellence in product design, Apple
succeeds even with its relatively high selling prices. This successful position indicates Apples
effectiveness in using its generic strategy and intensive growth strategies.

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B. Corporate Governance:
The Board oversees the Companys Chief Executive Officer (the CEO) and other senior
management in the competent and ethical operation of the Company on a day-to-day basis and
assures that the long-term interests of the shareholders are being served. To satisfy its duties,
directors are expected to take a proactive, focused approach to their position, and set standards to
ensure that the Company is committed to business success through the maintenance of high
standards of responsibility and ethics. The key practices and procedures of the Board are outlined
in the Corporate Governance Guidelines available on the Companys website at
www.apple.com/investor.
The Board met a total of four times during 2009. The Board has determined that all Board
members, excluding Mr. Jobs, are independent under the applicable NASDAQ and SEC rules.

C. Top Management:
Name

Title

Arthur D. Levinson

Former Chairman and CEO,

Chairman of the Board
Genentech
Audit Committee

James A. Bell

Tim Cook
Albert A. Gore Jr.

Robert A. Igor

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Former CFO and Corporate

President,
The Boeing Company

Board Role

Audit Committee

CEO, Apple

Former Vice President of

the United States.
Chairman and CEO, The

Compensation Committee
Nominating Committee
Nominating Committee
Chair

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Andrea Jung

Ronald D. Sugar

Susan L. Wagner

Walt Disney Company

Compensation Committee

President and CEO,

America

Compensation Committee
Chair
Nominating Committee

Former Chairman and CEO,

Northrop Grumman
Audit Committee Chair
Corporation
Co-founder and Director,
BlackRock.

2. External Environmental Analysis

A. General Environment
Apple introduced a redesigned iMac using a 64-bit processor. The iMac had a hemispherical base
and a flat-panel all-digital display. Although it received a lot of press, the iMac failed to live up to
the companys sales expectations. In 2008 and 2009, Apple opened its first retail stores in Europe
and Canada. By November 2006, the company had 149 stores in the United States, 4 stores in
Canada, 7 stores in the United Kingdom, and 7 stores in Japan. In 2006, Jobs announced that Apple
would sell an Intel-based Macintosh. Previously, Microsoft had purchased all of its
microprocessors from Motorola. By this time, Microsofts operating system with Intel
microprocessors was running on 97.5% of the personal computers sold, with Apple having only a
2.5% share of the market. The company also introduced its first Intel-based machines, the iMac
and MacBook Pro.

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PESTL Analysis for Apple Inc.

i. Political Factors
As stated in (CNetnews 2012) 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. (CNetnews, 2012).

ii. 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.

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

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iv. 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.
v. 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

B. Task Environment (Industry Analysis):

Apples strategies are partly based on the need to address forces in the external business
environment. These forces can limit or reduce the firms market share and revenues. Apples Five
Forces analysis, based on Porters model, shows the following strengths or intensities of external
factors in the industry environment:

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1.Threats of new entrants (High):

In industry entry barrier is low so any highly performance firm can enter in the industry with
probable capital requirement. In present business world many brands such as Samsung, Lenovo,
Blackberry, Microsoft, Dell PC, Google and Amazon etc. are entering in the industry to give
competition.
Because of new entrance the value of market shares of Apple may relatively low and for this cost
will increase because Apple will do more expense on R & D to make their product more effective
and unique against their competitor.

2. Bargaining Power of Supplier (Low):

Usually in electronics products have many brands and many suppliers are there and also
switching cost is low in electronics product so consumer can easily switch the suppliers because
of high price, quality, timing etc. so Apple Inc. has relatively low bargaining power of supplier
because Apple has specific suppliers.

3. Bargaining Power of Buyer (High):

The element of low switching cost referred to above strengthens the bargaining power of buyers
as a key force for Apple to consider. There are essentially two points of further analysis within
this force: the individual bargaining power of buyers and their collective bargaining power. For
Apple, individual bargaining power is a weak force, since the loss of any one customer
represents a negligible amount of revenue for Apple. However, the collective marketplace
bargaining power of customers, the possibility of mass customer defections to a competitor is a
strong force.

4. Rivalry among existing firms (High):

In industry the more competition among firms causes the more lower growth of industry. Apple
Inc. has many competitors in market these are Microsoft, Samsung etc. In industry the exit
barrier is high so for the same product firms compete by reducing price, increasing quality,
improving features, product differentiation etc.

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5. Threat of substitute product (High):

Apple has the threat of substitute products. Because of lower switching cost customers can easily
switch their product choice so Apple has to think about maintaining their quality, features and
price also.
At current situation Apple Inc. has threat with substitute products because Apple charge very
high price and all the consumer may not have the ability to buy and also substitute products have
different improved features. Buyers portion is very large so bargaining power also high.

C. Summary of external forces:

At present time in general environment the economic forces and socio-culture force are
important. The purchasing power of consumer, Inventory cost, Distribution cost, selling price
etc. all are related with economic forces. If countrys economic condition is stable then all factors
will work positively. In industry environment threats of substitute product and threats of new
entrance is important for present as well as for future. New entrance in industry keep apple
always improving their product quality feature etc. and for substitute products they will always
try to make their product unique.

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3. Internal Environment:
Corporate structure of apple:
The organizational structure is mainly a traditional hierarchy, with some key elements from
other types of organizational structure. The success of the company is linked to innovation and
the leadership of Steve Jobs, but its organizational structure is partly responsible for ensuring
support for such leadership. Now, under Tim Cooks leadership, Apple has made some small
changes in its organizational structure to suit market and industry demands.
Apples organizational structure is effective in supporting business performance to ensure
leadership in the industry. However, further changes in this organizational structure can help
improve Apples capabilities, especially in the area of rapid and creative innovation and design.

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A. Corporate culture:
Apples ruthless corporate culture is just one piece of a mystery that virtually every business
executive in the world would love to understand. The culture of Apple is based on an ideal that
self-motivated individuals will work harder if they do not have a boss micromanaging every
action .Apple ruthless corporate culture is just one price of a mystery that virtually every
business executive in the world would love to understand .the culture of apple is based on an
idea that self-motivated individuals will work harder if they do not have a boss so the Steve Jobs
ensured that everyone will work together and no one will not dominated by boss.

B. Organizational Activities:
Organizational activities are such type of work these are done for achieving organizational goals
and objectives. That activities include how the firm will work, in what position will be better for
the company, who will do the work, and what type of improvement is needed etc. These works
are done by several departments this are

Marketing
Finance
Research and Development
Human Resource Management.
Information System.

Marketing Analysis:
Marketing analysis includes the marketing position that is performance in both international and
domestic and the marketing mix.
In terms of developing a strategic vision as it relates to marketing, below are some of the key
takeaways to consider from Apple when formulating a long-term strategy for success:
1. Identify Trends By recognizing such trends as digital consumerism and that the PC
industry was becoming highly commoditized, Jobs was able to visualize a strategy for a
product that met consumer needs. To uncover such insights, its important to look across
industries, strategic groups, buyer groups, the scope of a product or service, the
functional-emotional orientation of an industry, and time.
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2. Analyze Competitors When research pointed to the fact that Apple was losing market
share and cannibalizing sales due to their strict licensing policy, Jobs ventured out to
contract with Microsoft to develop core products, while at the same time making the
decision to utilize Intel chips in their computers, enabling Apple to build laptops that
were both faster and less power hungry. By thoroughly understanding his competition, he
was able to partner with competitors in ways that were not only mutually beneficial, but
downright advantageous.
3. Innovate By following a Schumpeterian model of creative destruction and focusing on
the needs and wants of the consumers rather than how to just improve upon an existing
product, Apple was able to continuously re-think its product line and invent new products
that re-defined the traditional boundaries of the market. Innovation allows for companies
to capitalize on the first mover advantage, resulting in the realization of high up-front
market share and profit margins.
4. Position Youre Product - Because many computer systems and related products can be
easily replicated, finding ways to extend the life of a product through complementary
offerings is almost as important as re-invention. For example, the App Store served as a
complement to the iPhone which resulted in $1 billion in annual profits. And upon the
launch of the iTunes store, an exponential demand for iPods was created.
5. Build Brand Awareness Through utilizing creative campaigns and non-traditional
advertising channels for the Mac brand, Apple embarked on a truly unique differentiation
strategy, which helped grow brand awareness.
6. Optimize Distribution Apple revamped its distribution system to move from smaller
outlets to national chains. They also opened their own retail stores (280 stores in 10
countries), which now account for 16% of Apples total revenue. The retail stores were a
success because they provided users with an opportunity to learn about, experiment with,
and test drive products.

Financial Analysis:

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Ratio Analysis

2012

2013

2014

2015

Current Ratio

1:50

1:68

1:08

1:11

ROA

28.54%

19.34%

18.01%

20.45%

ROE

42.84%

30.64%

33.61%

46.25%

Net profit margin

26.67%

21.67%

21.61%

22.85%

Total asset
turnover

1.07

.84

.83

.89

Debt to equity

.00

.14

.32

.54

Research and Development:

Research and development (R&D) refers to the investigative activities a business conducts to
improve existing products and procedures or to lead to the development of new products and
procedures. Apples research and development department always try to utilize their programs
and their product quality to compete in the market and by R&D Apple try to find the unique
procedures that will make their product different than competitors products.

Objectives of R&D:

Maintaining the consistency of product quality.

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R&D keeps timely flow to compete with competitors.

Updating the features, software, hardware etc. of product.

R&D helps to generate new innovative idea and also work on them.

In any uncertain situation of products R&D finds out the reason and take critical step to
solve.

Strategies of R&D:
This is the way by which corporation and R&D department intend to win. The overall work
process,design ,portfolio are the element of strategy.Apple Inc. has its strategy to work in R&D.
In what way the procedure will proceed and the overall planning system of R&D are strategies of
R&D.
R&D provide the Apple Inc. with competitive advantage by maintaining the consistency of
quality and also developing new ideas, uniqueness,immediate solving the arising issues and by
the executive functions of product.

Operation and Logistics:

Apples primary focus is to develop reliable, innovative devices that will improve peoples way
of life. This involves scrutinizing every component that goes into its electronics and testing those
products assiduously. Apple is also a key proponent of outsourcing; from materials, to
manufacturers, to logistics providers
Once the product is designed and manufactured, it is extremely important to have a delivery
strategy to get the highly anticipated product to the consumer. However, Apple does not wish to
make logistics one of its core competencies. They prefer to work with logistics partners who
have the experience, network, and expertise to move high volumes of product quickly and
without damage or loss.
About five years ago, Apple design guru Joni Vie decided he wanted a new feature for the next
Mac Book: a small dot of green light above the screen, shining through the computers aluminum

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casing to indicate when its camera was on. The problem Its physically impossible to shine light
through metal.
Ive called in a team of manufacturing and materials experts to figure out how to make the
impossible possible, according to a former employee familiar with the development who
requested anonymity to avoid irking Apple.

Value chain for Apple Inc.:

Human Resource Management:

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HRM strategy: HR Strategy at Apple Make Their Employees Creative and Innovative.
A success of a company is not only a result of incredible manufacturing capability and great
location. Many times, HR strategy becomes the reason for company to stand strong and grow big
to rule the world. Apple is one example of such company. Great talents and unusual talent
management approaches are considered as the most important reasons why Apple could be the
leader in consumer electronics.

HRM policies:

Employees should not under any debt to get the job.

Employees should be hard working and work for companys success
Training program for the employees to get best outcome and utilize
their efficiency.
Boss and employees will work together and no dominate activities.
Employees should not take excessive work load.

Unfairness of giving promotion.

Rewarding and compensating problem.
Turn over problem.

HRM Issues:

The trends emerge from the activities is that every company has issues and benefit as well and
with them Apples HRM quality is very good cause employees are committed towards the
company to work efficiently. They attend training program to utilize their knowledge and they
give best outcome of them. The competitive advantage of this the Apple Inc. get best outcome
from their employees. Employees are very talented and hardworking than other companies and
their training program utilize their capabilities and their outcome is better than others.

Information system:
Apple Inc. In the present age, Apple is the world's second-largest information technology
company. Therefore, in order to apple MIS knowledge and skill into the reality, Apple is
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supposed to be an appropriate firm to analyze MIS issues. These issues will be represented in
following order:

1. Understanding business and information system requirements.

2. Analyzing financial performance.
3. Achieve operational excellence: analyzing competitive strategy.
4. Improving decision making: developing a Website privacy policy.
5. Improving decision marking: Designing the customer database
6. Improving operational excellence: Identifying supply chain management solutions
7. Achieving operational excellence: Developing an E-Commerce strategy
8. Achieving operational excellence: Identifying opportunities for knowledge management

The trends emerge from this is that information is very critical for any organization and Apple
has very effective information system that helps to do operation in strategic way. So for
achieving operational success and improving the strategic functions the information system is
very important for present and future as well.

C. Capabilities/core competencies:
Apples core competencies include innovation in mobile device technology, strong marketing
teams, high quality customer service and a strong financial performance. It also has a strong
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brand reputation for its products, which include the i-Pad, iPod, i-Phone, Apple TV, and Mac
computer hardware and software.
Core-Competencies Of Apple /What Makes Apple Super Successful :
Apple was found in the year 1976, is the worlds number one company and has a heap full of
lessons to be learnt from its success story. Started by Steve Jobs, Steve Wozniak, and Ronald
Wayne, Apple currently has annual revenue of over $108 billion and has taken the top notch
position in the IT industry. As many claim, Steve jobs was a very feeble eater and used to thrive
on fruits and other veggies and hence came the name Apple- his favorite food. With the
establishment of the first Macintosh in the year 1984, Apple had launched a product which no
one could duplicate and from there onwards there was no looking back.
So what exactly did Apple do to be the most successful companies of all?
To sell any kind of product, marketing is a very important element. And thats where Apple
struck the nail on the head.
Creating the buzz- 1st phase approach
Apple likes to launch the information of the products quite close to the actual date of the release.
Thus the buzz which is created about the product makes the consumers all the more inquisitive of
the product and its features. By providing only a handful of tit its about its products to the
hungry loyal customers the buzz begins. Apple has been known as one of the companys who
initially spent very less of its revenue on ads and followed traditional marketing methods.
Viral marketing
The second stage came in going viral about the products. Apple-oriented blogs such as Apple
Insider, The Unofficial Apple Weblog can help loyalist discuss about the product and any scrap
detail could be availed here. This viral marketing technique which Apple has adopted using
social networking sites and the web as a whole has be a successful attempt in bringing the world
closer to Apple

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Product differentiation
Apple being the inventors of the mouse and the track pad always believed in innovating
products. Apple products include the iPods, iPads, iTouch, iTV and iPhone along with a number
of computer enhancing apps and softwares. With the introduction of the iPod in the year 2001,
Apple started diversifying its products in such way that its competitors could barely even get a
whiff of what was happening in this tech world. Thus now Apple is fondly called as a haven of
consumer electronics.
Superior brand and product placement
With competitors like Microsoft offering their softwares for almost a majority of personal
computers, the founders of Apple decided to go the niche marketing way, thus pricing their
products at a superior level than the others. They could afford to do this because of their solid
foundations of R&D, product differentiation and traditional marketing.
Customer loyalty
This is the most essential element deciding the popularity of your product and Apple certainly
managed to do it the right way. By establishing sole Apple selling product stores all over the
globe, the sellers are well equipped with the knowledge they require to sell the product, thus
creating an excellent customer support unit. The consumers can personally check out all the
features in this store and have a real life experience of using the Mac.
Maintaining Secrecy
The employees at Apple truly believe in creating a roar of curiosity in the markets. Thus all the
details of their products are highly protected and in no way can be leaked out to the people. This
is another major reason why Apple has been successful in beating its competitors and enjoying a
larger market share.
Thus with a unlimited list of user friendly products, designs and upgrades Apple has
triumphantly beaten all its rivals and has taken the first place amongst the worlds most admired
companys. Steve Job, with his relentless passion for his work, created a different world for the

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Apple users. Thus the success path for Apple has been a unique experience for all and something
to learn from. And as Steve Jobs would say- Stay Hungry, Stay Foolish.

D. Summary of Internal factors:

At present time in the industry as an internal factor marketing and operation and logistics are
important. Product prices, quality, how Apple will promote their product in the market, where
should be their market position these are important for present as well as future. Apples cost
efficiency and logistics that is how their distribution system are working and the inventory to
reach of finished products to the consumers are important. The capabilities of manufacturing
very innovative and unique products for the consumer attract the market and this will be for
future also.

4. Analysis of strategic factors (SWOT Analysis):

IV.

Analysis of Strategic Factors

a) Strengths:
(i) Produce innovative products by using innovative technology
(ii) Produce aesthetic / stylish products
(iii) They make diversified products
(iv) Customers of Apple computers are brand loyal
(v) Have technology of interacting with computer using human senses
(vi)They have virus free systems
(vii) First company which adapt calligraphic font style
(viii) Introduce USB and fire wire ports for digital connection
(ix) Make music website

b) Weaknesses
(i) Apple has high manufacturing and inventory cost

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(ii) Management is not stable
(iii) Has low market share in software industry
(iv) Majority of retail stores located in U.S.A.
(v) No compatibility options in their soft wares
(vi) Decline in sales of iMac
(vii)Less emphasis on marketing issues to create awareness for their innovative products

c) Opportunities
(i) Should expand on the basis of sales
(ii) Should open retail stores in different countries
(iii) Should target government and educational institutions
(iv) Should make compatible soft wares
(v) Should capitalize on the basis of virus free systems
(vi) Should introduce the speech recognition program
(vii)They should focus on customized products for customers
(viii)Should start making their own microprocessor chips

d) Threats
(i) Merger & acquisitions of competitors
(ii) High cost can be a limitation in future
(iii) High market share of Microsoft Windows
(iv) Competition increases in music downloading sites

C) Internal / External Factor Evaluation:

a) IFAS

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Internal Factors

Weight
(out

Rating

Weighted Score

Comments

(1 - 5)

of1)

Strengths
(i) Produce innovative

0.10

3.5

0.35

Good R&D efforts

products
Stable products to control
(ii) They make diversified

0.10

0.40

markets

products
(iii) Brand loyal customers

shocks in different product

0.15

0.6

High end customer satisfaction

level

(vi) Virus free systems

0.05

0.10

(v) Produce aesthetic

products

Cutting edge, high end stylish

0.10

0.30

(vi) Introduce USB and fire

wire ports

products
Enabling portable peripherals

0.05

0.10

Weakness
(i) High manufacturing and

High level of security

More focus on development and

0.05

0.15

0.15

0.6

R&D

inventory cost
(ii) Has low market share in
software industry
(iii) No compatibility
options in soft wares

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0.10

0.30

0.05

0.10

0.10

4.5

0.45

Extremely high end products

(iv) Decline in sales of iMac

(v) Less emphasis on

marketing issues to create

Low investment in marketing

awareness

TOTAL

1.00

3.45

b) EFAS
Internal Factors

Weight

Rating

(out of1)

(1 - 5)

Weighted
Score

Opportunities
(i) Should expand on the
basis of sales

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Comments

Emphasize on the sales of

0.10

0.20

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(ii) Should target
government and educational

Find a propitious niche

0.15

0.45

institutions
(iii) Should capitalize on the
basis of virus free systems

Give advanced security

0.15

0.60

(iv) Should introduce speech

recognition program

Give new meaning to

0.10

0.30

(v) Should focus on

customized products

Cater the segment in a better

0.05

0.15

Threats
(i) Mergers & acquisitions

technology

way

Rival companies become

giants and good name

0.15

3.5

0.7

0.15

4.5

0.67

It is a question for Apple

0.10

3.0

0.30

Well positioned rival

0.05

0.10

of competitors
(ii) High cost can be a
limitation in future
(iii) High market share of
Microsoft
(iv) Competition increases
in music downloading sites

TOTAL

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1.00

3.47

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TOWS Analysis
Internal Factors

Strengths (S)
(i) Produce innovative
products
(ii) Brand loyal
customers

Weaknesses (W)
(i) High manufacturing cost
(ii) No compatibility issues
(iii) Less emphasis on
marketing issues

(iii) Virus free systems

External Factor
Opportunities (O)

SO Strategies

WO Strategies

(i) Capitalize on virus free

Apple should emphasize

Apple should emphasize on

system

more on expansion in

making new and focus on

order to increase market

creating awareness among

share by developing new

the customers.

(ii) Introduce speech

recognition system

innovative products and

(iii) Target govt. and

provide better after sale

educational institutions

services to make
customers more brand
loyal.

Threats (T)
(i) Merger & acquisitions of

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ST Strategies
Apple should have to

WT Strategies
Apple should have to focus

Think Different
competitors
(ii) High cost cab be a
limitation in future

keep its cost optimize

on producing new

by strategic alliance and

compatible products and

make high cost products

focus on marketing its

cheaper.

products.

(iii) High market share of

Microsoft

V.

Identification of Strategic Issues

Apple premium price differentiation strategy has its pitfalls given the intense rivalry of the industry.
Without constant innovation to set itself apart from its competitors, Apple products may appear
overpriced in comparison to its rivals. An example was the Mac Mini which failed to outdo the
Windows desktop in terms of functionality. Consumers could get a desktop with more functions and
faster performance at a lower price, resulting in less than ideal sales for the Mac Mini. The companys
strategy included expanding its distribution to effectively reach more customers and provided them with
a high-quality sales and post-sales support experience. The company was therefore uniquely positioned to
offer superior and well-integrated digital lifestyle and productivity solutions.

VI. Strategic Alternatives And Recommendations

Apple should make new innovation by using the technology and make the products less price than the
other competitors. Operating its own stores and locating them in desirable high traffic locations, the
company was better positioned to control the customer buying experience and attract new customers.
Every user now in database Customer profile.

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Free flow of information permits innovation.
Venture Capital as strong Catalyst.
Synergy between an inventor & Entrepreneur.
Packaging leads to success of product.
Worked feverishly to project this philosophy.
Incremental Innovation need to be managed with same as vigor as radical innovation.
Importance of forming alliances with competitor.
Decided to license OS.
Attempted to reorganized R&D activities several times

VII. Evaluation and Control

Apples products being increasingly multi-functional, Apple also runs the risk of
cannibalizing its own products. For example, the Apples

iPod have been said to be

cannibalizing notebook and iPod sales to the extent that the iPod Touch product line
was expected to be discontinued. This has the implication that Apple may have to
maintain higher price margins for the latest releases so that there will still be a net positive
business impact even after considering the cannibalization effect.

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Think Different

BIBLIOGRAPHY
1. Wheelmen Strategic Management and Business Policy 13th Edition.
2. http://appfrica.com/2010/01/28/the-apple-tablets-role-in-emerging-markets/>
3. http://www.apple.com/education/itunes-u/>
4. http://developer.apple.com/programs/ios/>

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