FAR EASTERN

Case: Apple, Inc. 2011

Strategic Management
MBA 705
FEU-Manila

Submitted by:
MA. THERESA M. MAMAUAG

MASTER OF BUSINESS ADMINISTRATION

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I. CASE BACKGROUND
Apple designs, manufactures, and markets a range of personal computers, mobile
communication and media devices, and portable digital music players and sells a range of
related software, services, peripherals, networking solutions, and third-party digital
content and applications. Apple products and services include Macintosh (Mac)
computers, iPhone, iPad, iPod, Apple TV, Xserve, a portfolio of consumer and
professional software applications, the Mac OS X and iOS operating systems, third-party
digital content and applications through the iTunes Store, and a range of accessory,
service, and support offerings. Apple sells its products globally through its retail stores,
online stores, and direct sales force and third-party cellular network carriers, wholesalers,
retailers, and value-added resellers. As Apple’s fiscal 2010 ended on September 25, 2010,
the company operated 317 retail stores, including 233 in the United States and 84
internationally. Apple opened its two newest stores on August 13, 2011—in Anchorage,
Alaska and Murrary, Utah. Also on that day, Apple became the must valuable company
in the world, surpassing ExxonMobil. Some analysts are asking whether Apple has more
cash than the USA.

II. PROPOSED VISION AND MISSION STATEMENT

Vision Statement

Apple Inc. aims to be the world’s no. 1 technology brand delivering the best personal
computing experience through innovation and excellence.

Mission Statement

Apple Inc. is committed to offering great and outstanding technology products to

consumers, education markets and professionals and to continually innovate and use the
advancement of technology to meet the changing needs of our customers globally. We
are dedicated to protecting the environment, health, and safety of our employees,
customers, and the global communities where we operate. We ensure to perform safety

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management practices into all aspects of our business and strive to profitably grow for
our stakeholders.

III. IFE MATRIX

Weighted
Key Internal Factors Weight Rating
Score
Strengths 0.09 4 0.36
1.      Strong brand image 0.10 4 0.40
2.      High profit margins 0.05 3 0.15
3.      Large and loyal customer base 0.07 4 0.28
4.      Offers wide range of products 0.06 4 0.24
5.      Best known “first mover” company 0.12 4 0.48
6.      Invests heavily in marketing and promotional campaign 0.02 3 0.06
7.      Runs own operating system applications 0.03 3 0.09
8.      Operates 317 stores internationally and within United States 0.02 3 0.06
9.      Known for being the world’s most valuable technology company 0.05 3 0.15
10.  Signed deals with major record companies 0.01 3 0.03
11.  High sales for Iphone and Ipad 0.02 3 0.06
Weakness
1.      Limited distribution network 0.04 2 0.08
2.      High selling prices 0.10 1 0.10
3.      Dependence of sales on high-sales products 0.05 2 0.10
4.      Incompatibility with Other Software 0.07 1 0.07
5.      Fluctuating sales of iPod 0.03 2 0.06
6.      Low sales for desktop and portables 0.05 2 0.10
7.      No presidents of divisions and no SBUs 0.02 2 0.04
 1.00    2.91

IV. EFE MATRIX

Weighted
Key External Factors Weight Rating
Score
Opportunities      
1.      Growth of distribution network for technology products 0.07 3 0.21
2.      Customer Growth 0.10 4 0.4
3.      Increase of internet penetration to other regions/countries 0.03 2 0.06
4.      Increasing Technological Dependency 0.02 2 0.04
5.      Technological Advancement 0.12 4 0.48
6.      Growth of high-tech gadgets technological industry 0.09 4 0.36
7.      Growth of social media market 0.02 1 0.02
8.      Increasing demand for Cloud based system and services 0.05 3 0.15

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Threats
1.      Aggressive competition 0.08 4 0.32
2.      Imitation 0.10 4 0.4
3.      Rising labor cost in various countries 0.02 1 0.02
4.      Economic fluctuations 0.02 1 0.02
5.      Regulatory pressures 0.03 2 0.06
6.      Competitors offer lower prices 0.13 4 0.52
7.      Microsoft may consider not to provide license for Macintosh
operating system 0.07 3 0.21
8.      Global shipments of PCs fell 3.2 percent on the first quarter of 2011 0.05 3 0.15
Total 1.00 3.42

V. SWOT MATRIX
SO Strategy
1. Launch products to other booming
regions/countries.
(S1, S4, S9, O2, O3, O4, O6)
2. Aggressively enter a partnership with
companies for Cloud-based system and
services.
(S3, S10, S11, O2, O6, O7, O8)
ST Strategy
1. Pursue new product development for
Iphone, Ipad and PC products.
(S1, S2, S9, S11, T1, T2)
WO Strategy
1. Advertise other products offered aside
from high-sales products.
(W3, W5, W6, O4, O5, O6, O7)
2. Expand distribution networks.
(W1, O1, O2)
WT Strategy
1. Offer affordable versions of products.
(W2, T6, T1)

Suggested Strategies:
 Launch products to other booming regions/countries
Advantages
1. Increase in number of customers
2. Increase in sales
3. Increased Visibility for the brand.

Disadvantages
1. Need to comply with each country's rules regarding products imported from other
countries.

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2. Need to customize your product or service to each culture.
3. Need to invest a huge amount of money.
4. Products may not be patronized due to high prices.

 Aggressively enter a partnership with companies for Cloud-based system and

services
Advantages
1. Additional profits
2. Lessen competition
3. Free of licensing restrictions

Disadvantages
1. Additional costs
2. Risk of disagreements and friction among partners and management

 Expand distribution networks.

Advantages
1. Greater level of cost efficiency
2. Wider customer reach
3. More efficient marketing

Disadvantages
1. Loss of communication control
2. Loss of product importance
3. Retailers carry multiple products including competitors’ products

 Advertise other products offered aside from high-sales products

Advantages
1. Increase sales for other products
2. May reach customers at different times
3. Provides awareness about the products to large audience
Disadvantages
1. Can be highly expensive 

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2. Possibility of people sharing dislike of ads

 Pursue new product development for Iphone, Ipad and PC products

Advantages
1. Respond to customer changing needs
2. Create a culture of innovation in your company
3. Can initially charge higher prices for new products before competitors products
come on the market
4. Increase in sales
Disadvantages
1. Very costly and time consuming
2. Businesses not able to produce new product on large scale at low enough cost
3. Businesses risk ruining reputation if new product is poor quality

 Offering affordable versions of products

Advantages
1. Increase sales volume
2. Decrease in production costs
3. Wider customer reach
4. Increase customer satisfaction
Disadvantages
1. May not have the same quality with previous expensive products
2. May affect the credibility of the brand

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VI. PROJECTED BUDGET PLAN

Chosen Strategy: Offering affordable versions of products

R&D $800
Ideation  
Research  
Planning  
Machineries $5,000
Manufacturing Machineries  
Assembling Machineries  
Other Machineries  
Raw Materials $20,000
Entire Raw Materials (5000 units per
product)  
Other Operating Expenses $1,500
Transpotation Cost  
Utility Expenses  
Machinery Fuel Cost  
Gas  
Commision  
Advertisement $300
News Paper  
Magazines and Publications  
Direct Mail  
TV Commercials  
Internet Advertising  
Product Placements  
Social Networking Sites  
Distribution $500
Retail Stores  
Online  
Other Retail Channels  
  $28100

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VII. ACTION PLAN

Responsible
Person/s, or
Action Plan Timeline
Department/s,
Team/s, etc
Ideation of New Product R&D Day 1-60
Research and Validation R&D Day 61-90
Planning and Designing of
Products R&D Day 91-150
Prototyping Products R&D Day 151 - 180
Sourcing of Raw Materials and R&D, Operations and
Partners Needed for Prodution Finance Department, Day 181 - 211
Create Budget Plan Finance Department Day 211 - 218
Operations
Production of Products Department Day 219 - 398
Operations
Inspection and Qualification Department Day 219 - 398
Marketing
Launching of New Products Department Day 398 - 428
Marketing
Department and
Delivering of Products Product Management Day 429 - 458

VIII. Recommendation

Offering affordable versions of products for Apple Inc. can encourage more people to
be likely impulse to buy a low cost versus high priced product. The products of apple are
associated with high quality but expensive products. With this strategy, the firm can
reach a wider segment of customers and give more customers a chance to experience
their products. It can open more opportunity for the firm if they offer quality low-cost
products which can make them stand out from their competitors. As the first movers in
the industry, Apple surely has the most brilliant and skilled people which can make low-
cost products items into lead generators. In time, with this strategy, Apple can boost your
cash-flow and profits.

IX. Conclusion

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It is concluded that apple possesses competitive advantages when it comes to

innovating and the highest quality of products. The firm has a strong financial
performance showing its strong brand reputation and large and loyal customer base.
However, because of the high-priced products, there is low turnover in some inventories
such as desktops and portables. Other competitors of the firm offer low priced products.
Hence, Apple should invest a lot in R&D to support being proactive to compete with its
competitors in the industry. This time, they must focus on creating low-cost versions of
products to supply the demand of other customer segments. Apple is known for its
innovation and excellence when it comes to producing technological products. Thus they
should also address the weakness of high-priced products and focus on customer
preferences of affordable products by not distorting the quality much.

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