Think Different

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

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Table of Content
Page no.
About Apple Inc. ……………………………………………………………………………03

Current performance of Apple………………………………………………………………3-4

Mission and Vision statement……………………………………………………………….05

Growth strategy………………………………………………………………………………05

Corporate governance………………………………………………………………………..06

Top Management…………………………………………………………………………….06-07

Environmental scanning:
External Environment Analysis …………………………………………………………..07 -09

Industry environment……………………………………………………………………….09-11

Summary of external forces………………………………………………………………… 11

Internal Environment…………………………………………………………………………12-19

Core Competencies …………………………………………………………………………20-21

Summary Of Internal forces…………………………………………………………………...22

Analysis of strategic factors:

SWOT analysis……………………………………………………………………………...22-23

IFAS…………………………………………………………………………………………24-25

EFAS…………………………………………………………………………………………26-27

TOWS Matrix……………………………………………………………………………….34-35

Identification of strategic issues……………………………………………36

Strategic alternatives and recommendation………………………………36

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 Average on
March 19, 2015.

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

A. Current Performance of Apple:
Apple’s net profit grew 37 per cent to $18bn, topping ExxonMobil’s 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 smart phone launched in
2007. Analysts say the performance brings Apple close to reclaiming its title from Samsung as
the world’s largest smart phone 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.
Apple’s gross margin rose 2 percentage points to 39.9 percent; it’s highest in more than two
years. However, the iPad remained a weak spot, with unit sales dropping 18 per cent to 21.4m, as
Apple’s 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:

Apple’s vision statement is considerably detailed and reflects the company’s 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 Apple’s rapid innovation strategy. In addition, the vision statement specifies simplicity,
which is also an integral aspect of the company’s approach to product design and development.

Growth Strategies and Policies of Apple Inc.:

Apple’s generic strategy and intensive growth strategies directly relate to the company’s
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, Apple’s intensive
strategies for growth support the firm’s 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 Apple’s
effectiveness in using its generic strategy and intensive growth strategies.

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B. Corporate Governance:
The Board oversees the Company’s 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 Company’s 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 Board Role

Arthur D. Levinson Former Chairman and CEO,

Genentech Chairman of the Board
Audit Committee

James A. Bell
Former CFO and Corporate
President,
Audit Committee
The Boeing Company

Tim Cook CEO, Apple

Albert A. Gore Jr. Compensation Committee

Former Vice President of Nominating Committee
the United States.

Robert A. Igor Nominating Committee

Chairman and CEO, The Chair

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Walt Disney Company Compensation Committee

Andrea Jung Compensation Committee

President and CEO, Chair
America Nominating Committee

Ronald D. Sugar
Former Chairman and CEO,
Northrop Grumman Audit Committee Chair
Corporation

Susan L. Wagner Co-founder and Director,

Black Rock.

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 company’s 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, Microsoft’s 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 Apple’s 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
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):

Apple’s strategies are partly based on the need to address forces in the external business
environment. These forces can limit or reduce the firm’s market share and revenues. Apple’s Five
Forces analysis, based on Porter’s 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 the entire consumer may not have the ability to buy and also substitute products
have different improved features. Buyer’s 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 country’s 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 Cook’s leadership, Apple has made some small
changes in its organizational structure to suit market and industry demands.
Apple’s organizational structure is effective in supporting business performance to ensure
leadership in the industry. However, further changes in this organizational structure can help
improve Apple’s 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, it’s 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 You’re 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 Apple’s 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 1.07 .84 .83 .89

turnover

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. Apple’s 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 competitor’s 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:

Apple’s primary focus is to develop reliable, innovative devices that will improve people’s 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 computer’s aluminum

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casing to indicate when its camera was on. The problem Its physically impossible to shine light
through metal.
I’ve 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 company’s 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.

HRM Issues:
 Unfairness of giving promotion.
 Rewarding and compensating problem.
 Turn over problem.

The trends emerge from the activities is that every company has issues and benefit as well and
with them Apple’s 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:
Apple’s 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 world’s 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 that’s 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 it’s about its products to the
hungry loyal customers the buzz begins. Apple has been known as one of the company’s 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 software’s. 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 software’s 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 world’s most admired
company’s. 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 Job’s 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. Apple’s 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

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(i) Apple has high manufacturing and inventory cost

(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:

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a) IFAS

Internal Factors Weight Rating Weighted Score Comments

(out (1 - 5)

of1)

Strengths

(i) Produce innovative 0.10 3.5 0.35 Good R&D efforts

products

Stable products to control

shocks in different product

(ii) They make diversified 0.10 4 0.40
markets
products

(iii) Brand loyal customers 0.15 4 0.6 High end customer satisfaction

level

(vi) Virus free systems 0.05 2 0.10 High level of security

(v) Produce aesthetic Cutting edge, high end stylish

products products
0.10 3 0.30

(vi) Introduce USB and fire Enabling portable peripherals

wire ports
0.05 2 0.10

Weakness More focus on development and

R&D
(i) High manufacturing and 0.05 3 0.15

inventory cost

(ii) Has low market share in

software industry
0.15 4 0.6 Less awareness

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(iii) No compatibility

options in soft wares

0.10 3 0.30 Extremely high end products

(iv) Decline in sales of iMac

0.05 2 0.10

(v) Less emphasis on

marketing issues to create

0.10 4.5 0.45 Low investment in marketing
awareness

TOTAL 1.00 3.45

b) EFAS

Internal Factors Weight Rating Weighted Comments

Score
(out of1) (1 - 5)

Opportunities Emphasize on the sales of

innovative products
(i) Should expand on the 0.10 2 0.20

basis of sales

(ii) Should target Find a propitious niche

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government and educational 0.15 3 0.45

institutions

(iii) Should capitalize on the Give advanced security

basis of virus free systems

0.15 4 0.60

(iv) Should introduce speech Give new meaning to

recognition program technology

0.10 3 0.30

(v) Should focus on Cater the segment in a better

customized products way

0.05 3 0.15

Threats Rival companies become

giants and good name

(i) Mergers & acquisitions 0.15 3.5 0.7

of competitors

(ii) High cost can be a 0.15 4.5 0.67 It is a question for Apple

limitation in future

(iii) High market share of 0.10 3.0 0.30 Well positioned rival

Microsoft

(iv) Competition increases

in music downloading sites

0.05 2 0.10

TOTAL 1.00 3.47

TOWS Analysis

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Internal Factors
External Factor
Opportunities (O)
(i) Demand of ice cream is
very high and it is growing.
(ii) Strong product line of
fifty items.
(iii) Broad market coverage
of 63%.
Threats (T)
(i) Pay more taxes &
importing cost.
(ii) Increase in domestic
competition.
(iii) Change in consumer
taste.
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Strengths (S) Weaknesses (W)
(i) Igloo is the market (i) Decentralized management
leader system
(ii) Goodwill of the (ii) Only managing director
company and brand can take every decision
image.
(iii) Igloo has high
(iii) Strong distribution manufacturing and inventory
network as its product is cost.
available in every
district and Upozilla of
Bangladesh.
SO Strategies WO Strategies
Igloo should emphasize Igloo should emphasize on
more on expansion in making new and focus on
order to increase market creating awareness among
share by developing new the customers.
innovative products and
provide better after sale
services to make
customers more brand
loyal.
ST Strategies WT Strategies
Igloo should have to Igloo should have to focus
keep its cost optimize
on producing new
by strategic alliance and
compatible products and
make high cost products
cheaper. focus on marketing its
 Think Different

products.

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 company’s

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.

 Free flow of information permits innovation.

 Venture Capital as strong Catalyst.

 Synergy between an inventor & Entrepreneur.

 Packaging leads to success of product.

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 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

Apple’s products being increasingly multi-functional, Apple also runs the risk of

cannibalizing its own products. For example, the Apple’s 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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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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