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Apple Computer Inc.

2005
A Strategic Management Case Study
Graphics are the property of Apple Computer

® 2007, Tony Gauvin, UMFK

Overview
• • • • A brief history of Apple Computer EOY 2004
– Mission, Vision, Objectives, Strategies New Vision and Mission
Opportunities & Threats CPM EFE

• •

Possible alternative strategies Our Recommendation
– – – Strategies Long range objectives EPS/EBIT

2005

– – –

External Analysis

• •

Internal Analysis
– – – – Financial Data Strengths and weaknesses IFE Financial ratios

Strategic Analysis
– – – – – – – SWOT Matrix SPACE BCG IE matrix Grand Strategy Matrix Matrix Analysis QSPM

• • • • •

Implementation Issues Proposed annual objectives (goal) and polices Proposed procedures for evaluation Epilogue Current Performance Questions Resources Utilized

® 2007, Tony Gauvin, UMFK

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History of Apple
• 1976
– Apple started in a garage in Santa Clara, CA by Steve Wozniak and Steve Jobs – A easy to use PC for small computer users

• 1980
– $117,000,000 in sales – IPO

• 1983
– Wozniak quits – Jobs hires John Sculley From Pepsi Co. to become President of Apple

• 1984
– Macintosh PC

® 2007, Tony Gauvin, UMFK

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History of Apple
• 1985
– – – – Jobs and Sculley have a ―falling out‖ Jobs fired Sculley becomes CEO Bill Gates wants to buy Mac O/S, Sculley says No, Gates buys DOS from IBM, Microsoft kicks Apple's butt (90% market share)

• 1993
– Apple release Newton, the first PDA – Earnings Plunge, Apple restructures, Sculley Resigns

• 1997
– Apple CEO Gilbert Amelio buys NextStep from Steve Jobs – Earnings Plunge, Apple restructures, Amelio Resigns

• 1998
– Steve Jobs returns as iCEO
® 2007, Tony Gauvin, UMFK

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Brand emerges. Tony Gauvin. UMFK 5 .History of Apple • 1998 – Jobs restructures Apple along two products lines • Consumer ―i‖Mac – ―i‖ for internet • Professional ―Power‖Mac – ―power‖ for power user – Sales return. Airport • iPod and iTunes – Stock price takes off like a rocket! ® 2007. Firewire. Innovation rules • USB.

UMFK = 6 . Tony Gauvin.Lesson learned + ® 2007.

Tony Gauvin.2004 Vision Statement Apple ignited the personal computer revolution in the 1970s with the Apple II and reinvented the personal computer in the 1980s with the Macintosh. UMFK 7 . educators. software. creative professional. and Internet offerings ® 2007. and consumers around the world through its innovative hardware. Apple is committed to bringing the beast personal computing experience to students.

Apple strives for continuous improvement in our environmental. UMFK 8 . Tony Gauvin. we can offer technologically innovative products and services while conserving and enhancing resources for future generations. health and safety management systems and in the environmental quality of our products.2004 Mission Apple Computer is committed to protecting the environment. health and safety of our employees. We recognize that by integrating sound environmental. ® 2007. processes and services. customers and the global communities where we operate. health and safety management practices into all aspects of our business.

UMFK 9 .2004 Strategies • Market Penetration – Branding – Niche player • New Product Development – Speech recognition – Virtual reality ® 2007. Tony Gauvin.

Tony Gauvin. UMFK 10 .2004 objectives • Double market Share from 5% to 10% • Remain as the most profitable computer company in the industry ® 2007.

virus-free. UMFK 11 .2004 Issues • How can apple best capitalize on the needs of the business world for a safer. wormfree system? • Should Apple enter the consumer electronics business like Dell and Gateway did? • Should Apple remain a lone wolf in Operating Systems or adopt a cross-platform format compatible with Windows and Intel • How much emphasis should Apple place on developing the next generation of voice recognition computers? ® 2007. Tony Gauvin.

A new vision To become the global leader in computer and digital music products. UMFK 12 . Tony Gauvin. ® 2007.

and being openly honest with all of our stakeholders (6). Tony Gauvin. Those are timeless fundamentals. and profitable to our company (5). We strive to provide additional opportunities for growth and enrichment of company personnel while maintaining a work environment for all employees (9) that encourages personal commitment and participation in support of achieving excellence. Apple is one of the leaders in the computer industry and produces some of the best-selling computers and digital music products in the world (3). We also apply innovative technology to our core business (4) to make our products irresistible to customers. UMFK 13 .A New Mission • The Apple commitment to excellence is its mission to provide computers and service (2) for people (1) that meet the highest standards of value and reliability. We are committed to being a good corporate citizen. ® 2007. We support activities that enable people to improve their lives and reinforce their commitment to society (8). beneficial to society. Apple provides the highest level of quality and value for our customers (7).

Products or services: What are the firm’s major products? 3. Concern for employees: Are employees a valuable asset of the firm? ® 2007. and profitability: Is the firm committed to growth and financial soundness? 6. Self-concept: What is the firm’s distinctive competence or major competitive advantage? 8. Concern for survival. growth. UMFK 14 . Concern for public image: Is the firm responsive to social. and environmental concerns? 9. Markets: Geographically. community. Tony Gauvin. Customers: Who are the firm’s customers? 2. where does the firm compete? 4.Apple’s New Mission The new mission answers the following questions 1. aspirations. Philosophy: What are the basic beliefs. and ethical priorities of the firm? 7. values. Technology: Is the firm technologically current? 5.

People enjoy small electronic gadgets. ® 2007.External Audit (Opportunities) 1. 5. 4. Much of the world is still without computers. Increase in worms and viruses on PCs. UMFK 15 . 2. Government crackdown on pirating music off the Internet. Large population (Gen X & Y) which are extremely individualistic and name brand conscious. Tony Gauvin. 3.

Competition produces similar products at often half the price. Companies not seeing Apple as compatible with their software. 4. The population at large unwilling to use Macintosh. Increasing competition with music downloads. UMFK 16 . ® 2007. 5. Tony Gauvin. Dell and HP are major competitors.External Audit (Threats) 1. 2. 3.

Apple CPM Apple Critical Success Factors Market Share Price Financial Position Product Quality Consumer Loyalty Advertising Management Global Expansion Innovation Web Development Weight Rating Weighted Score 0.10 0.16 0.20 0.24 0.15 Rating HP Weighted Score 0.56 0.14 0.40 0.60 0.30 0.15 0.12 0.05 2 2 3 4 4 4 4 2 4 3 3 3 4 3 2 2 3 2 2 2 4 4 3 3 3 3 3 3 2 3 Total 1.12 0.06 ® 2007.45 0.45 0.15 0.60 0.28 0.45 0.06 0.08 0.18 0.04 0.71 3.45 0.30 0.00 3.18 0.15 0.40 0.10 Rating Dell Weighted Score 0.15 0. Tony Gauvin.28 2.10 0.20 0.30 0. UMFK 17 .12 0.06 0.28 0.45 0.18 0.60 0.

Tony Gauvin. People enjoy small electronic gadgets.30 0. Dell and HP are major competitors. Large population (Gen X & Y) which are extremely individualistic and name brand conscious. Threats Companies not seeing Apple as compatible with their software.20 0.15 0.10 4 4 4 2 4 0.30 0. The population at large unwilling to use Macintosh.15 0.40 ® 2007.20 0.60 0.Apple EFE Key External Factors Weight Rating Weighted Score Opportunities Increase in worms and virus on PCs.10 0.10 0. Government crackdown on pirating music off the Internet.20 3.05 0.05 0. Much of the world is still without computers.20 0. Competition produces similar products at often half the price. UMFK 18 . TOTAL 0.20 0.20 0.10 0.60 0.10 1.10 0.00 2 3 4 3 2 0. Increasing competition with music downloads.

Consolidated Balance Sheet ® 2007. UMFK 19 . Tony Gauvin.

UMFK 20 . Tony Gauvin.Consolidated statement of operations ® 2007.

Revamping desktop and notebook lines. ® 2007. Tony Gauvin. 6.Internal Audit (Strengths) 1. 5. Apple’s niche audience provides the company with some insulation from the direct price competition. Low debt—more maneuverable. UMFK 21 . Web technology can be used to improve product awareness and sales. 3. Developing own software and hardware. 4. especially with the iPod and its availability on Windows platform. 2. iTunes Music Store is a good source of revenue.

Weak presence in markets other than education and publishing. 2. ® 2007. Slow turnaround on high demand products.Internal Audit (weaknesses) 1. Weak relationship with Intel and Microsoft. 3. Tony Gauvin. Weak presence globally. Dependency on new product launches. 4. 5. UMFK 22 .

60 0.06 0.05 0.10 0.30 0. Revamping desktop and notebook lines. Tony Gauvin.15 0.24 0.42 0.04 1.10 4 3 3 4 3 3 4 0. 0.Apple IFE Key Internal Factors Strengths iTunes Music Store is a good source of revenue.06 0. Good brand loyalty. Apple’s niche audience provides the company with some insulation from the direct price competition. Developing own software and hardware.15 0. Web technology can be used to improve product awareness and sales.06 0.06 0. Slow turnaround on high demand products.30 0. Total 0.07 0.10 0. Weak presence in markets other than education and publishing.03 0.40 Weight Rating Weighted Score Weaknesses Dependency on new product launches.00 1 1 2 1 2 0.10 0. UMFK 23 . Weak relationship with Intel and Microsoft. especially with the iPod and the availability on Windows platform.07 0. Low debt—more maneuverable.10 0.78 ® 2007.08 2.14 0. Weak presence globally.

) 5-Yr Net Profit Margin (5-Year Avg.90 31. UMFK 24 .2 8. Tony4.8 47. year ago qtr) Apple Computer 56.9 20.0 47.) Dividends (5-Year Annual Avg.57 26.48 2.90 17.3 Gauvin.3 9.88 10.2 11.00 4.3 13.0 9.8 17. YTD) Net Income (Qtr vs.3 5.1 NA NA 4.) 383.2 20.1 5.50 Industry 18.9 8.40 4.64 NA NA 78.) Price Ratios Current P/E Ratio P/E Ratio 5-Year High P/E Ratio 5-Year Low Price/Sales Ratio Price/Book Value Price/Cash Flow Ratio Profit Margins Gross Margin Pre-Tax Margin Net Profit Margin 5-Yr Gross Margin (5-Year Avg.4 1.) 5-Yr Pre-Tax Margin (5-Year Avg.80 18.35 8.70 305.Financial Ratio Analysis (January 2006) Growth Rates % Sales (Qtr vs.11 39.4 5.93 10.27 46.83 12.8 64.30 17.) Net Income (5-Year Annual Avg.6 29.40 5.70 12.00 SP-500 14.8 ® 2007. year ago qtr) Sales (5-Year Annual Avg.00 NA NA 16.8 3.6 NA NA 1.5 6.20 Net Income (YTD vs.40 30.

0 7.2 66.0 5.5 1.7 7.3 2.000 7.9 2.9 3.7 73.5 8.) Management Efficiency Income/Employee Revenue/Employee Receivable Turnover Inventory Turnover Asset Turnover 3.86 1.000 16.7 34.7 7.9 6.) Return on Assets (5-Year Avg.9 3.9 4.0 32.8 2.06 1.50 1.4 0.6 17.5 5.4 63.06 Current Ratio Quick Ratio Interest Coverage Leverage Ratio Book Value/Share Investment Returns % Return on Equity Return on Assets Return on Capital Return on Equity (5-Year Avg.00 0.000 941.7 15.Financial Ratio Analysis (January 2006) Financial Condition Debt/Equity Ratio 0.2 NA 2.8 0.26 17.0 1.4 11.6 NA 1. Tony Gauvin.7 13.000 367.6 12.6 90.1 29.000 1 Mil 12. UMFK 25 .6 17.1 15.9 11.0 2.4 ® 2007.) Return on Capital (5-Year Avg.4 6.

02 Price/Book 6 2.39 Net Profit Margin (%) 9.22 0.6 NA NA NA N ® 2007.4 NA NA -0.6 3.6 Interest Coverage NA 2004 2003 2002 2001 $6.83 1.08 0.59 0 0 0.91 1.70 $5.7 Date 2005 Book Value/ Share $8.5 40.Financial Trends Date 2005 2004 2003 2002 2001 Avg.27 1.3 1.9 ROA (%) 11.94 Debt/Equity 0 ROE (%) 17.4 1. P/E 23.99 1.1 1.8 1.6 1.21 1.48 $5.76 $5. UMFK 26 . Tony Gauvin.08 5.1 111 NA Price/Sales 3.6 NA 3.1 -0.6 90.

UMFK http://moneycentral.asp?symbol=AAPL 27 .com/investor/charts/charting.msn. Tony Gauvin.Apple Stock Performance ® 2007.

355 x 5= 3.56) = 46.Apple Net Worth (January 2006 in millions) 1. Number of Shares Outstanding x Share Price = 842 x $72.136 ® 2007.00 = Method Average $ 7. Stockholders’ Equity + Goodwill = 7.535 $ 6.610 $ 60. Share price = $72.15 x Net Income $1. Net Income x 5 = $1.335 = 4.775 $ 61.00/EPS(1. Tony Gauvin. UMFK 28 .624 $34.466 + 69 2.

(W1. T5) 1. especially with the iPod and the availability on Windows platform. S5.Promote to business the safety of having a worm and virus free computer by using Mac. (S1. O2. W2. 6. 3. O1. 5. 2.Increase ties with Microsoft and Intel and their products.Produce Wintel Compatible products (W1. T1).Promote the originality of Apple computers and the different style and stable system that is worth the price difference in style. W-O Strategies 1.Revamping desktop and notebook lines.Dell and HP are major competitors. T4.Government crackdown on pirating music off the Internet.Developing own software and hardware.Increasing competition with music downloads. O5) 2.Weak relationship with Intel and Microsoft. (S2.Good brand loyalty. 2. O3) 2. 5. Threats S-T Strategies W-T Strategies 1.(W1.Increase in worms and viruses on PCs. O4.People enjoy small electronic gadgets. 3.Improve relationship with Microsoft and Intel so that companies will see them as compatible. 5.Competition produces similar products at often half the price. (S5.Much of the world is still without computers. 4. S-O Strategies 1. 5.The population at large unwilling to use Macintosh. UMFK 29 . W4.Weak presence in business arena.Large population (Gen X & Y) which are extremely individualistic and name brand conscious.Use movies and music groups that are geared towards Gen X and Y to promote computers and laptops. 3.Slow turnaround on high demand products. 4.Low debt—more maneuverable. 1. stability and speed. W4 O2. Opportunities 1. O5) Weaknesses 1.Expand production into Asia (W2.Apple’s niche audience provides the company with some insulation from the direct price competition.Dependency on new product launches. 3.Advertise using individuals that will link Generation X & Y to the iTunes and other related products.iTunes Music Store is a good source of revenue. 7.Companies not seeing Apple as compatible with their software. T2. S5. 2.Weak presence in markets other than education and publishing. 4. 4. O2. 3. Tony Gauvin. W2 T1) 2. O4).Web technology can be used to improve product awareness and sales. 2. O1) 1. (S5. O5). (S3. (W2.T1) 2.Increase awareness through the Web of the immunity of Mac products to worms and viruses.Strategic Analysis Swot Matrix Strengths 1.Increase and promote the compatibility to Windows operating system. ® 2007.

0 3.0 3.0 -2. UMFK 30 .0 -5.0 4.0 4.0 5.0 -1.0 -2.Strategic Analysis Space Matrix Financial Strength rating is 1 (worst) to 6 (best) 1 Leverage 2 Working Capital 3 Liquidity 4 Return on Investment 5 3 Year NEW income Industry Strength rating is 1 (worst) to 6 (best) 1 Growth Potential 2 Profit Potential 3 Financial Stability 4 Ease of Entry into Market 5 Labor Cost Environmental Stability rating is -1 (best) to -6 (worst) 1 Rate of Inflation 2 Technological Changes 3 Price elasticity of Demand 4 Competitive Pressure 5 Barriers to Entry into Market Competitive advantage rating is -1 (best) to -6 (worst) 1 Market Share 2 Product Quality 3 Customer Laylaity 4 Technological Know-How 5 Control over Suppliers and Ditribuors Ratings 3.0 -6.0 -1.0 FS Total IS Total ES Total CS total ® 2007.0 -5.0 5.0 -2.0 -1.0 -2. Tony Gauvin.0 5.0 20.0 -10.0 -17.0 18.0 2.0 4.

Strategic Analysis Space Matrix Conservative FS 6 5 4 3 2 1 CA IS Aggressive -6 -5 -4 -3 -2 -1 -1 -2 -3 -4 -5 -6 1 2 3 4 5 6 Defensive ES Competitive ® 2007. Tony Gauvin. UMFK 31 .

UMFK 32 .Strategic Analysis Grand Strategy Matrix Rapid Market Growth Quadrant II Quadrant I Weak Competitive Position Strong Competitive Position Quadrant III Slow Market Growth Quadrant IV ® 2007. Tony Gauvin.

5 3.0 33 .Apple IE Matrix Grow and Build Hold and Maintain Harvest or Divest High 3-4 IFE Scores Strong 3-4 Average 2-2.0 IFE 2. UMFK 52% Domestic ® 2007.99 V VIII VII Low 1-1.99 Weak 1-1. Tony 54% International 46% 48% EFE 3.99 I International II Domestic III VI IX EFE Scores IV Medium 2-2.99 Segments Revenue Profit Gauvin.6 3.

2 34 .50 Low 0. Tony Gauvin.0 High +20 Stars Domestic Question Marks II Medium IInternational Dogs 0 Cash Cows III Low -20 Segments Domestic International IV Revenue Profit Growth Rate 54% 52% 17 46% 48% 5 ® 2007.3 0.0 Medium . UMFK Relative Market Share 0.Apple BCG Matrix High 1.

Matrix Analysis Alternative Strategies Forward Integration Backward Integration Horizontal Integration Market Penetration Market Development Product Development Concentric Diversification Conglomerate Diversification Horizontal Diversification Joint Venture Retrenchment Divestiture Liquidation X 1 X X X BCG IE X X X X X X SPACE X X X X X X X X X GRAND COUNT 2 2 2 3 3 X X X X X 4 2 2 2 1 ® 2007. UMFK 35 . Tony Gauvin.

10 0. Weaknesses Dependency on new product launches.06 0.00 0. 0. Weak relationship with Intel and Microsoft. 0.21 Slow turnaround on high demand products.60 --Expand production into Asia AS 3.14 0. UMFK 36 . 0.40 3.00 0.24 --0. Apple’s niche audience provides the company with some insulation from the direct price competition.07 --3. Weak presence in business arena.10 4.00 --3.00 4.10 Weight Produce Wintel compatible products AS 4.03 0.73 ® 2007.10 0.00 --0. Tony Gauvin.00 --0. Good brand loyalty.00 --0.04 1.15 0.00 --4.30 0. Low debt—more maneuverable.40 0.15 Web technology can be used to improve product awareness and sales.00 --TAS 0.00 --4.14 1. especially with the iPod and the availability on Windows platform. Developing own software and hardware.00 --0.45 --- Revamping desktop and notebook lines.00 --TAS 0.05 --1.87 --1. Weak presence in markets other than education and publishing.06 0.Apple QSPM Strategic Alternatives Key Internal Factors Strengths iTunes Music Store is a good source of revenue.07 --1.20 --4.06 --0.00 2.10 0. SUBTOTAL 0.00 --0.00 --0.28 1.

Threats Companies not seeing Apple as compatible with their software.15 0. Dell and HP are major competitors. Increasing competition with music downloads.00 4.10 1.00 1.00 4.10 ----2.45 0. Large population (Gen X & Y) which are extremely individualistic and name brand conscious.00 1.95 2.10 --Expand production into Asia AS 3.00 1.Apple QSPM Key External Factors Weight Produce Wintel compatible products TAS 0.00 --TAS 0.00 ----0.10 0. Tony Gauvin.20 0. Much of the world is still without computers.30 ----- ® 2007.00 --0.10 0. UMFK 37 .00 ----0.00 0.15 0.15 0.15 0.00 3.60 0.10 1.15 3.05 0.00 4.40 0. The population at large unwilling to use Macintosh. SUBTOTAL SUM TOTAL ATTRACTIVENESS SCORE 0. Government crackdown on pirating music off the Internet. Competition produces similar products at often half the price.88 4.10 0.10 0.00 1.05 0.05 0. People enjoy small electronic gadgets.40 --Opportunities Increase in worms and virus on PCs.83 2.20 0.

UMFK 38 .Possible alternative Strategies • Market Penetration – Go after Dell. Tony Gauvin. HP and Microsoft (the Wintel alliance) markets Shares • Market Development – Asia & Europe • New Product development – New consumer electronics products • Related Diversification – Peripherals • Retrenchment – Reengineer to lower cost of goods sold in reaction to commoditization pricing of PC market ® 2007.

Recommendations • Strategy 1 – Open twenty computer retail stores (not just peripherals and accessories). – This will increase product accessibility for those who wish to view items other than just accessories and increase awareness of the originality of Apple’s products. – Estimated cost of $ 5 million per store = $100 Million Total. ® 2007. Apple currently operates stores throughout the United States with only peripherals and accessories for their computers. – Two percent increase in sales representatives for the computer hardware. UMFK 39 . Tony Gauvin. Adding the hardware should generate more handson awareness and use already established locations.

Estimated cost $5 billion. Shuffle. UMFK 40 .Recommendations • Strategy 2 – Expand into the Asian market over a five-year period by building a manufacturing facility and headquarters in Hong Kong and expanding sales throughout Asia. • Strategy 3 – Add more features to current products including new iPod. ® 2007. Apple cash reserves (~$8 billion) and managerial talents (Steve Jobs) makes embarking on 3 strategies at one time is not only possible but recommended. Tony Gauvin. • While it is usually prudent to embark on just one strategy at a time. and Macintosh enhancements and power. – $50 million is the estimated cost for Research and Development.

EPS/EBIT • $ Amount Needed: $5.100 M – Strategy 1 & 2 • • • • Stock Price: $75 Tax Rate: 26% Interest Rate: 5% (2006) # Shares Outstanding: 842M ® 2007. UMFK 41 . Tony Gauvin.

27 1.000.35 1.500.30 Percent Stock Recession Normal Boom Recession Normal Boom $500.000 733.000. UMFK 42 .41 1.835.450.000 $1.000 257.000 $3.000 $1.110.000 862.22 2.000 890.000 2.500.000 257.000 0.050.000.000 390.000 0 0 0 500.050.000 77.000 2.000 $1.43 0.250.000.000 759.41 EBIT Interest EBT Taxes EAT # Shares EPS 70 Percent Stock .000 $3.915.500.000 63.742.319.667 890.000 842.000 842.000 2.000 $3.250.000.000 370.000.000.000.450.000 180.066.000 1.835.667 0.000 919.000 312.44 Debt Financing Recession Normal Boom $500.666.250.819.000 842.500.000 2.450.000 3.000 976.500.922.666.250.000 780.000 2.000 713.915.220.000 1.000.000 1.000.000 236.135. Tony Gauvin.750.000 0.667 862.13 2.000 323.000.000.000.000 130.000.667 910.000.500.500.000 369.135.000 2.000 1.000.000 257.250.500.600.000 343.835.915.000.500.000 77.000 910.750.000.000 179.000 1.162.050.600.000 109.000.750.600.EPS/EBIT EBIT Interest EBT Taxes EAT # Shares EPS Common Stock Financing Recession Normal Boom $500.066.615.066.42 ® 2007.000 $3.750.667 890.000.242.000.000 2.000 422.000 $1.000 242.000.000 83.086.029.666.750.000.500.500.422.000.30 Percent Debt 70 Percent Debt .052.000 77.000 862.000.135.18 2.000 $500.667 910.21 1.09 2.000.000.615.000 1.250.750.000 180.000.000.000 319.000 180.615.

Tony Gauvin. UMFK 43 .Implementation Issues • Moving production overseas – – – – – Unsettling for current workforce MIS Integration problems Change in culture May damage brand (Made in USA) Environmental outlook • New marketing strategies – Paradox of marketing to deficiencies of Wintel platform while becoming cross platform capable • Forward integration issues – Do we have the talent to become direct sellers – Cross selling competitors peripherals >> Brand Dilution? ® 2007.

2 year 25. 3 year 25% – Write division polices stating exact gains and marketing approaches to achieve gains • • Reduce unit cost of goods sold by 10% annually for next 3 years – Leverage low cost labor overseas Introduce one new consumer product each year – Provide adequate funding to R&D – Provide funding for market research – Insure strong communication ties between marketing and R&D • Either provide functional enhancements to existing products each year or obsolesce product – Assign R&D project teams to each existing product – Have market research produce product maturity curves for existing products • Create Chief scientist position on Corporate Board to reflect the importance of R&D to Apple Computer ® 2007. Tony Gauvin. UMFK 44 .Proposed annual objectives (goal) and polices • Double sales revenue in 3 years – 1st year 50%.

Tony Gauvin.Proposed procedures for evaluation • Qtr & Yearly financial reports • Track Industry & market Reponses to new product development • Balanced Scorecard • Yearly strategic meeting of division management and corporate management ® 2007. UMFK 45 .

Tony Gauvin. ABC.Epilogue • 2006 – – – – iPods add Video Content from Disney. ESPN. SOAPnet Stock soars by 120% iPod morphs to • Shuffle • Nano – Goes to Intel Architecture – Sales increase by 45% – Gross margin increase by 8% • 2007 – iPhone – Sales predicted to increase by 35% – Gross profit margin predicted to increase by 8% ® 2007. UMFK 46 .

Current Stock Performance http://moneycentral. UMFK 47 .com/investor/charts/charting.msn.asp?symbol=AAPL ® 2007. Tony Gauvin.

UMFK 48 . Sept. 25. Francis Marion University • Form 10-K SEC Filing. Tony Gauvin.Resources • Case Notes – Forest David. 2005 • Datamonitor – – – – SWOT Apple 2004 & 2005 PCs in the United States 2005 Consumer Electronics in the United States 2005 Market Watch • Apple: Unix for the people. Unix for the masses 2005 • Value line Investment survey – Apple 2007 – Computer Peripherals 2007 ® 2007.

com/images/apple-question. Tony Gauvin.Questions http://seriouslygood. UMFK 49 .kdweeks.gif ® 2007.