Introduction:

An American multinational corporation, established in Cupertino, California on April 1,

1976 by Steve Jobs and is one of the greatest in the world that designs and manufactures
consumer electronics and computer software products. The company's best-known hardware
products Macintosh computers, iPod, iPhone, softwares including the Mac OS X operating
system, iTunes and other creativity softwares like iWork represent the face of the music,
phone, and computing industry. The company operates more than 250 retail stores in sixteen
countries and an online store where hardware and software products are sold. Present CEO is
Tim Cook.
I-CURRENT SITUATION.

A-Current performance: (for 2017)

The Company posted quarterly revenue of $52.6 billion, an increase of 12 percent from the
year-ago quarter, and quarterly earnings per diluted share of $2.07, up 24 percent.
International sales accounted for 62 percent of the quarter’s revenue. Apple is providing the
following guidance for its fiscal 2018 first quarter:
 revenue between $84 billion and $87 billion
 gross margin between 38 percent and 38.5 percent
 operating expenses between $7.65 billion and $7.75 billion
 other income/(expense) of $600 million
 tax rate of 25.5 percent
Apple revolutionized personal technology with the introduction of the Macintosh in 1984.
Today, Apple leads the world in innovation with iPhone, iPad, Mac, Apple Watch and Apple
TV. Apple’s four software platforms — iOS, macOS, watch OS and tv OS — provide
seamless experiences across all Apple devices and empower people with breakthrough
services including the App Store, Apple Music, Apple Pay and iCloud. Apple’s more than
100,000 employees are dedicated to making the best products on earth, and to leaving the
world better than we found it.

B-Strategic posture:
1-Mission :
Apple has changed its corporate vision and mission statements over time, to reflect changes
in the company from the time of Steve Jobs to the current leadership of Tim Cook. Apple's
Inc. (AAPL) current mission statement (as relayed in its 2017 annual report):
 "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 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."
Contrast that with Steve Jobs' original, personal ethos –
"To make a contribution to the world by making tools for the mind that advance
humankind." What satisfied him most was watching kids use Apple products in the
classroom.’’
The company’s corporate mission and vision statements motivate employees to
support and contribute to innovation for competitive advantage. The vision
statement and mission statement now represent the company’s efforts in addressing
business opportunities in the computer technology, consumer electronics, cloud
computing, digital distribution services, and semiconductors industries.
2-Objectives:
Objective 1- Continue to create ground-breaking products. Apple has made a name for
itself becoming a trend setter in the market with every one of their products introducing
something new and exciting to the world.

Objective 2- Innovate and dictate the movement for future technology

Objective 3- Expand nationwide chain of Apple stores globally.

Objective 4- Make products available in every other possible retail channel, ex. Online, Big
Box retailer. Enter and sustain premium pricing while attempting to gain market share.
Objective 5- Build hype and anticipation for new upcoming products. Sustain and expand
on strongly branded name.

3- Strategies:
 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, Google,
Amazon.com, Dell, Lenovo, Sony, and PayPal.
 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.
 The “great product” strategy focuses on quality over quantity. While other manufacturers’
strategy entail churning out products one after another in a short span of time and having
such a diversified product mix, Apple preferred to stick to what it does best. This means that
it focuses on selected products and continues enhancing them, instead of branching out to
create other products within the same category.
4-Policies:

1- Apple Inc’s (AAPL.O) decision to stop licensing graphics chips from Imagination
Technologies Group Plc IMG.L in order to take greater control of the core technologies
in its products - both to guard its hefty margins and to position it for future innovations.
The strategy, has already reduced Apple’s dependence on critical outside suppliers like
ARM Holdings Plc, Apple clearly got rid of all the conventional suppliers and replaced
about five chips with on this reduces cost as well.
2- Apple has been responding more to consumer trends in the market instead of
leading product categories with first-to-market devices. Apple have shown a new
side they are pushing into new markets, with Android One specifically targeted at
the China/India market.
3- Apple promotes their products through commercials and print ads, focusing on how
their products are different from competitors. Commercial ads run when a product is
first launched and print ads will run throughout the product's life. Ads are simple
and to the point, usually focusing on one key feature of their product.
4- Free trade policies are created over time, especially with developing countries.
Additional free trade policies increase the opportunities for Apple to distribute more
of its products to various markets around the world.

II-Strategic managers:
A- Board of directors
 August 24, 2011: Steve Jobs announces his resignation as chief executive officer at Apple.
Cook takes over, while Jobs takes on role as company chairman.
 Eight membered board of directors. Some of which also work with other famous
companies like Walt Disney.
 All are well experienced and most are part of board since 2008. Except for Tim Cook (the
sole employee-director), they all serve on various sub-committees of the board in various
capacities. board of directors are as follows:
 Tim Cook CEO Apple
 Arthur D. Levinson, Ph.D. Chairman of the Board, Apple, Former Chairman and
CEO Genentech.
 James A. Bell Former CFO and Corporate President The Boeing Company
 Albert Gore Jr. Former Vice President of the United States
 Robert A. Iger; independent director apple, Chairman and CEO The Walt Disney
Company.
 Andrea Jung President and CEO Grameen America, Inc.
 Ronald D. Sugar, Ph.D. Former Chairman and CEO Northrop Grumman
 Susan L. Wagner Co-Founder and Director BlackRock.
B-Top management:
 Apple’s top management consists of a diverse group of leaders in their respective
fields. Most of them have senior leadership experience at major domestic and
multinational companies. In these positions, they have gained significant and diverse
management experience, including strategic and financial planning, public company
 financial reporting, compliance, risk management and leadership development, an
understanding of corporate governance practices and trends.
 The Board and its Nominating and Corporate Governance Committee believe the
skills, qualities, attributes, and experience of our directors provide Apple with
business acumen and a diverse range of perspectives to engage each other and
management to address effectively Apple’s evolving needs and represent the best
interests of Apple’s shareholders.
 The company believes its current leadership structure best serves the objectives of the
Board’s oversight of management, the Board’s ability to carry out its roles and
responsibilities on behalf of Apple’s shareholders, and Apple’s overall corporate
governance. The Board also believes the separation of the Chairman and CEO roles
allows the CEO to focus his time and energy on operating and managing Apple and
leverages the Chairman’s experience and perspectives. The Board periodically
reviews the leadership structure to determine whether it continues to best serve Apple
and its shareholders.

III-External environment:

External Factor Evaluation Matrix

Key External Factors Weigh Rating Weighted

t Score

Opportunities

1. New trade agreement that lifts the ban of imported food is signed 0.11 3 0.33
with a neighbouring country.

2. Signing a contract with a new supplier. 0.09 1 0.09

3. Processed food market growing by 15% next year in our largest 0.24 2 0.48
market.

4. Incorporating a new company in neighbouring country, where the 0.10 1 0.10

tax rate is decreasing by 3% next year.

Threats

5. The contract with the main customer expires in 2 months. 0.17 4 0.68
 External Factor Evaluation Matrix

Key External Factors Weigh Rating Weighted

t Score

6. Extreme cases of natural disasters occurring next year. 0.03 2 0.06

7. New law, requiring decreasing the amount of sugar in the food by 0.14 3 0.42
20%, could be passed next year.

8. Competitors opening 3 new stores in the town. 0.12 2 0.24

Total 1.00 - 2.40

 Today is the world of technology and competition is growing hard and hard with
every passing day as apple leads in world of innovation, world’s strive for innovation
let apple to enjoy revenues and lead the market.
 Shipping, services experiences and what’s next are major problems apple needs to
focus on.
B-societal environment:
It involves pest analysis;
Political Factors Affecting Apple’s Business
This aspect of the PEST analysis model indicates the influence of organizations, such as the
government, on business. In Apple’s case, the following are the most important political
external factors:
1. Improving free trade policies (opportunity)
2. Stable politics in developed countries (opportunity)
3. Apple is heavily dependent on lower cost manufacturing in China. Social and political
unrest in China could disrupt manufacturing or increase manufacturing costs in that
country. There have been also been calls to restrict Chinese imports in the United
States in an effort to boost American manufacturing. (Threat)
Apple can improve its performance by taking advantage of these political opportunities in its
remote/macro-environment.
Economic Factors:
This aspect of the PEST analysis model indicates market and industry conditions that impact
firms. In Apple’s case, the following economic external factors are the most significant:
1. Rapid growth of developing countries (opportunity)
 2. Stable economies of developed countries (opportunity)
3. A strong U.S. dollar could increase exchange rates, making it more expensive for
Apple to do business in key markets like Europe and China. (Threat).
Apple must ensure that it effectively exploits these economic opportunities. Speed and
effectiveness are important because competitors are also targeting these high-growth
economies.
Social/Sociocultural Factors Influence:
Apple’s business is subject to the effects of social or sociocultural factors. This aspect of the
PEST analysis model points to the social influences on consumer behaviours and
expectations. The following social or sociocultural external factors are the most significant in
the firm’s remote/macro-environment:
1. Rising use of mobile access (opportunity)
2. Rising use of social media (opportunity)
The firm has already taken steps to exploit this opportunity, such as through the iPhone, iPad,
and Apple Watch. The rising use of social media is also an opportunity because it increases
demand for digital devices like Apple products. 
Technological Factors in Apple’s Business
The technological external factors in Apple’s remote/macro-environment generally provide
opportunities for the company. Technological analysis shows current technologies and
technological changes that affect business conditions. The following technological external
factors are the most significant:
1. Cloud computing trend (opportunity)
2. Technological integration (opportunity)
3. Growing apps market (opportunity)
4. The growing capabilities of cyber criminals make Apple’s systems less secure and
take away one of its strongest competitive advantages: its reputation for high levels of
security and safety. (Threat).
Apple can exploit this opportunity by offering cloud-friendly devices and apps. On the other
hand, technological integration of devices is a major trend. Apple can take advantage of this
opportunity by continuing its strategy of providing products that can be seamlessly connected
to each other. In addition, the apps market is growing. Apple has the opportunity to grow its
App Store and work on threats to overcome them.
C-Task environment:

 The level of competition among the major companies that compete directly with
Apple in the technology sector is high Thus, the competitive force within the industry
is strong. (Threat)
  One thing that makes the industry so highly competitive is the relatively low
switching cost. It does not require a substantial investment for a consumer to ditch
Apple's iPad for an Amazon Kindle or other tablet computers. (Threat)
 Apple has dealt with marketplace competition primarily through continually
developing new and unique products to increase and strengthen its market share
position. (opportunity).

Rivalry among competitors:

The level of competition among the major companies like Google, Inc., the Hewlett-Packard
Company, Samsung Electronics Co., Ltd. and Amazon, Inc that compete directly with Apple
in the technology sector is high and theses companies invested major revenues in R&D.
(threat)

Bargaining power of buyer:

The element of low switching cost strengthens the bargaining power of buyers. as a key force
for Apple to consider. (Threat)

Bargaining Power of Suppliers

Apple has managed a complex chain of suppliers that are spread globally over several nations
including US, China, Taiwan, Japan, Brazil, Mexico and several other small and big nations.
It is the large number of suppliers and potential suppliers that limits their bargaining power.
The switching cost for Apple to exchange one supplier for another is relatively low and not a
significant obstacle. Plus, Apple is a major customer for most of its parts suppliers, and,
therefore, one its suppliers are very reluctant to risk losing. (opportunity)

Threat of Substitute Products:

The threat of substitute products has kept growing for Apple. It is because several brands in
the smartphone market have introduced low to mid-priced models. While the brand loyalty of
Apple customers is high, some of the models from Samsung and Google are a potential threat
because of their efficiency and design (Threat)

Threat of New Entrants:

The threat of new entrants has remained relatively weak for Apple, it is primarily due to two
factors. First, because the cost barriers to establishing a new technology company are very
high and second, brands cannot generate Apple’s kind of brand image and recognition
overnight. (opportunity)

Distributor power:
Apple does not have much control over the raw material or distribution channels. (threat)

IV- INTERNAL ENVIRNMENT:

 1. CORPORATE STRUCTURE:

Meyer states that the Apple’s structure is one of the main reasons why the company is
generating success. Also, the structure allows Apple Inc. to vacate business growth. The
hierarchy in Apple’s organizational structural supports strong management control in the
organization. This advantage of Apple Inc.’s corporate structure facilitate rapid and effective
strategic management implementation, and help in establishing coherence throughout the
entire organization.

2. CORPORATE CULTURE:
The secrecy, pressure and competition will remain there in Apple’s environment because they
are part of any technology giant’s organizational culture. However, Apple’s focus on creating
an employee friendly environment can bear fruitful results. If Apple has to remain innovative,
its focus must be on keeping its employees motivated. That require a deep cultural challenge
which Tim Cook has vowed to bring about.

3. CORPORATE RESOURCES:
 R&D:

Because the industries in which the company competes are characterised by

technological advances, the company ability to compete successfully depends
heavily upon its ability to ensure a continual and timely flow of competitive
products, services and technologies to marketplace. The company continues to
develop new technologies to enhance existing products and services, and to
expand the range of its offerings through R&D, licensing of intellectual
property and acquisition of third party businesses and technology.

 MARKETING:

Apple knows its customer very well and has developed loyalty in their market
share. Apple is expanding and improving its distribution capabilities by opening
its own retail stores in key cities around the world. Apple provides Apple Mac
expert retail floor staff to selected reseller’s stores.

 FINANCE:

Apple management expects gross margin to be between 38% and 38.5%, down
from 40.1%. Apple employees get an annual 25% discount when they purchase
an iPod, computer, or iPad.

 OPERATIONS:
The business of Apple Inc. is managed on geographical basis. There are five
operating segments of Apple Inc. such as America, Europe, Japan. In US,
Canada, UK and Japan Apple owned stores are currently operating.

 INFORMATION SYSTEM:

For specific information system, including hardware and software, Apple are
kept as a secret because they want to keep their competitive advantage. But,
Apple do provide some varieties services to its customer.

 Human Resources:

The primary objective of the company is to attract and retain its employees.
Team work, comfortability in the workplace. Apple Inc. has mastered job
design and human resource strategies to ensure continued support for its
industry leadership.

 Analysis of Strategic factors

Situational analysis:

 STRENGTH:

 Globally Iconic

 Top technology

 Brand of Choice

 Proficient Research

 Sustainability made Possible through Liam

1. Globally Iconic:

Apple is one of the most reliable company when it comes to personalized advanced
computers and smart technology devices. They have billions of customers with steady
increment.

2. Top Technology:

Apple was the first to introduce some of the most innovative products that have changed the
world (iPhones, iPads). Apple is still determined to build and craft better, more proficient
technology devices.
 3. Brand of Choice:

It isn’t big news that Apple is a demanded brand in corporate offices. Apple has a specific
business page that offers top quality technology solutions for every corporation’s needs.

4. Proficient Research:

Apple puts dedication into its product designs. Careful study is initiated, and further research
is performed to help understand customer needs and requirements.

5. Sustainability made Possible through Liam:

Liam is an iPhone recycling robot that breaks down and dissects an iPhone. Most parts of an
iPhone can be reused. Liam is designed to yield as many reusable parts as possible. These
reusable parts are then categorized and safely stored so they can be used for new
manufacturing.

 WEAKNESSES:

 Lack of marketing & promotions

 Lack of competitors

 High priced products

 Incompatibility with other Software

1. Lack of Marketing & Promotions:

Apple has solidified their grounds by establishing loyal customers, even with poor
marketing tactics. Because of their success, Apple does not feel to have any additional
investments towards marketing funds.

2. Lack of Competition:

Apple doesn’t really compete against its competitors. It hardly markets its products and you
only get to hear about Apple when something new has been launched or if there has been a
recent update.

3. High Priced Products:

Apple’s products can be considered a luxury due to their premium prices. The products

are priced for middle and high-income consumers. Low-Income consumers can’t simply
afford Apple products. Due to their premium pricing, only middle or high-class individuals
can afford their products.

4. Incompatibility with Other Software:

 When a customer buys an apple product, they enter the Apple universe. Apple’s products do
not support other software or technologies making them incompatible with other devices.
Customers have exclusively purchase Apple apps or accessories to continue using their Apple
products.

 OPPORTUNITIES:

 Consistent customer growth

 Qualified professionals

 Expensive distribution network

 Lack of green technology

 Smart wearable technology

1. Consistent Customer Growth:

Apple has been dominating the technology sector for years now. They provide top quality
and cutting-edge technology that offers a breakthrough in customer experience. Their
customer retention rate of 92% is phenomenal. Apple can always rely on the power of the
internet for future opportunities to gain new customers and form new alliances.

2. Qualified Professionals:

Apple’s researchers, developers, and product specialists are a team of highly qualified
professionals that have years of experience in branding consumer products. With the
expansion of their team, Apple can continuously build new opportunities.

3. Expansive Distribution Network:

Apple Inc. has the opportunity to expand its distribution network. Currently, the distribution
network that Apple has is very limited and leaves room for minimal growth. Apple can
generate higher revenue and sales if it focused on creating an expansive distribution network.
Furthermore, the company can benefit from diligent marketing and promotions.

4. Lack of Green Technology:

Apple is yet to launch products that are created using green technology. The company has not
yet implemented or participated in creating sustainable technology that is eco-friendly.

5. Smart Wearable Technology:

Smart wearable technology will soon dominate the world. According to Forbes, smart
wearable technology device sales will double by 2022. It will become a 27 billion+ market
with 233 million-unit sales. Apple has the opportunity to capitalize on smart wearable
technology.

 Threats:
  Increasing competition

 Market penetration

1. Increasing Competition:

Although Apple as a brand has solidified itself, it still faces threats from competitors. With
the advancement in technology, brands like Samsung, Google, and Dell are giving Apple
tough competition. As the competition is getting stronger, Apple either has to introduce new
technologies or revise its pricing policy to stay ahead of its competition.

2. Market Penetration:

There has been a significant change in market penetration by other brands in the smartphone
market. Companies like Samsung, HTC, and Lenovo are using Android software to create
new smartphones. Currently, Android has captured 72.23% of the market share, while Apple
has only 24.55% of the market share globally.

Review of Current Mission and Objectives:

 Current Mission:

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 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.
  Objectives:

1. To expand their sales to customers who have not yet own any Apple’s products.

2. To produce hassle free products that provides service and enjoyment for
customers.

3. Become the leading business in the mobile market

Strategic Analysis and Recommendation for Apple

Apple’s generic strategy of broad differentiation helps the company stand out. Differentiation in
function and design supports the firm’s goal of leading the market through innovative products.
Innovation is at the heart of Apple’s business. However, to improve its application of this generic
strategy, the company must aggressively penetrate markets, especially developing countries where
Apple’s market reach is still limited.

Apple’s main intensive growth strategy is product development. Market penetration and market
development are second and third in priority, respectively. These intensive growth strategies agree
with and support Apple’s generic strategy. The firm is strong in product development through
innovation. However, to improve performance, the company should emphasize more on market
penetration and market development. Emphasis on these two intensive growth strategies can improve
Apple’s resilience against aggressive competitors like Samsung.
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