STRATEGIC PLANNING & DECISION MAKING

BY MR. YOUSUF ALI MEHMOOD NED UNIVERSITY OF ENGG & TECH. KARACHI

APPLE COMPUTERS INC.
PREPARED BY:

SYED MANZAR ABBAS JAFRI
ROLL NO: IM-009 PROGRAMME: 2008-2009 DATE: 20-10-2009

creative professionals and consumers around the world through its innovative hardware. MISSION STATEMENT Apple is committed to bringing the best personal computing experience to students. To be on top of innovative product range Apple is dedicated its efforts to invent state of art technology with best human –machine interface system. software and Internet offerings. . Apple is also committed to provide social services world wide and providing best environment for user and seller. educators.VISION STATEMENT Create a better world with innovation in computing technology and consumer electronics.

Most profitable company in industry. Higher prices – less affordable. 4. Brand loyalty among customers. Top of line product i. 2. OPPORTUNITIES 1. Better alternative to windows which is highly vulnerable to virus threat.e. . 4. Product line diversification. Development of next generation computer system with voice recognition. IPOD. Production delays. THREATS 1. 1. 3. DOS system. Japan sales declining. 3. 3. 3. No direct sales approach. 4. Highly innovative products. Cross platform format which is compatible with windows & Intel.STRENGTHS SWOT ANALYSIS WEAKNESSES 1. Only 3% market share in PC. High inventory and warehousing expenses. 2. Own retail stores. 4. 2. Microsoft media player. 5. 2.

20 0.External Factors Evaluation (EFE) Matrix Key External Factors External Opportunities 1. Cross platform format which is compatible with windows & Intel.45 0.12 3 0. 0.16 0.08 0. Development of next generation computer system with voice recognition.18 3.15 0. Only 3% market share in PC. Microsoft media player.24 Total.72 0. Better alternative to windows which is highly vulnerable to virus threat.18 0. 3.45 4. 3. .06 2 0. Japan sales declining.06 1. Product line diversification. Weight 0. DOS System 0.15 Rating 4 2 3 Weighted Score 0.12 2.36 External Threats 1.80 0. 0. 4. 2.00 4 3 3 0.

High inventory and warehousing expenses.06 0. Total. Brand Loyalty among customers. 3. No direct sales approach. . Production delays.48 0.74 Weaknesses 1. Top of line product i.12 2.00 Rating 4 3 4 4 3 2 1 2 1 Weighted Score 0. 2.12 0. IPOD Weight 0.e.30 0. 5.14 0. 3.10 0. Higher prices – less affordable. Highly innovative products. Own retail stores.08 0. 4. 2. 4.18 0.32 0.16 0.80 0. Most profitable company in industry.28 0.08 0.12 1.10 0.20 0.Internal Factors Evaluation (IFE) Matrix Key Internal Factors Strengths 1.10 0.

LONG TERM OBJECTIVES 1. Increase market share up-to 30% globally. . Introduce at least four innovative product to its customer annualy. 2.

2. 2. Development of next generation computer system with voice recognition. Opportunities 1. (W2. Japan sales declining. Develop good marketing force to increase market share – Market Penetration. Product line diversification. O2. O1) 2. Brand Loyalty among customers. Increase market share in computer hardware systems – Market Penetration. SO Strategies 1. O3. 2. S3. S5. Cross platform format which is compatible with windows & Intel. 3. IPOD Weaknesses 1. Reduce expenses to reduce cost of goods – Retrenchment. 2. SWOT Matrix CHOOSING AMONG STRATEGIES Strengths 1. T2. Higher prices – less affordable. Expand market share through effective marketing – Market Penetration. S2. T3) . 3. Develop more innovative products – Product Development (S1. 4. S4.e. O4) Threats  DOS System 1. Develop next generation computer system to grab market niche – Product Development (W3. 4. 4. Develop affordable and user friendly products – Product Development. Microsoft media player. O2.Market Penetration (S1. No direct sales approach. 5. T4) 2. Most profitable company in industry. Highly innovative products. O3) 3. O1. (S1. S2. S4. (S1. (S1. (W1. Top of line product i. T1. T3) WT Strategies 1. 3. High inventory and warehousing expenses. T2. 3. W3. Own retail stores. O3) 2. O4) WO Strategies 1. Only 3% market share in PC. Better alternative to windows which is highly vulnerable to virus threat. Expand market share through innovative and compatible products and effective marketing.I. ST Strategies 1. Production delays.

-1) = +4 = -5 Defensive (ES) Competitive Cumulative Value (Horizontal Axis) Cumulative Value (Vertical Axis) = +3 = -1 According to the results achieved through SPACE Matrix. 1.. Apple computer should opt Competitive Strategies. i. Space Matrix After evaluation of given information in the case study. 5. 6. Market Development 3. Product Development 2. following values are assigned to SPACE Matrix Components: Horizontal Axis Industry Strength (IS) Competitive Advantage (CA) Vertical Axis Financial Strength (FS) Environmental Stability (ES) (FS) Conservative Aggressive = +6 = -3 (CA) (IS) (+3.e. 7.II. Market Penetration 4. Forward Integration Backward Integration Horizontal Integration Joint Ventures .

5.III. 1.0 to 4. 6.0 to 2.99) III High (3. It contain Intensive strategies as follows.Market Development 4.e.0 to 2.0 to 1. Backward Integration.74 IFE Score Strong (3. Grow and Build strategy will be adopted.99) Low (1. Forward Integration. EFE Score = 3.Product Development 3. we got following scores. Horizontal Integration.0) I EFE Score Medium (2.Market Penetration 2. Box II is our choice.0) Average (2. .99) IV V VI VII VIII IX Based on the mentioned dimensions.24 IFE Score = 2.0 to 4..0 to 1. Internal – External (IE) Matrix Based on EFE and IFE matrix. i.99) II Weak (1.

2. Therefore we will select strategies mentioned in Quadrant II. Quadrant IV WEAK COMPETITIVE POSITION Quadrant III Retrenchment. 7. Related Diversification. 4. 4. Divestiture. 5. Related Diversification. Market Penetration. Market Development. 5. Quadrant I Market Development. Related Diversification. 2. SLOWD MARKET GROWTH From the case study of Apple computer it is evident that Apple computer has strong competitive advantage because of its strength in innovative products and the market growth of telecommunication sector is very high. Horizontal Integration. Product Development. . 1. 6. 2.. Liquidation. 3. 1. 6. Horizontal Integration. 7. 3. 5.IV. Forward Integration. 2. 4.Market development.e. Horizontal Integration Divestiture. 5. 3. 6. Product Development. Liquidation. Market Penetration. Product Development. Unrelated Diversification. 1. Backward Integration. Forward Integration Backward Integration. Market Penetration. 3. 2. 3. 4. Grand Strategy Matrix RAPID MARKET GROWTH Quadrant II 1. Unrelated Diversification. STRONG COMPETITIVE POSITION 1. i. Related Diversification. Joint Ventures.

Market penetration. 6.TALLY: Tally strategies from above four tools: 1. 7. (1) Short Listing Strategies: Based on our analysis we short list our strategies as follows: 1. (7) Market development. 5. (3) Backward integration. 2. 2. (3) Product development. Product development. (3) Related diversification. (6) Forward integration. . 4. Market penetration. 3. (3) Horizontal integration.

2.60 0.54 0. 4. Cross platform format which is compatible with windows & Intel.15 0.45 0.80 0.36 0. 0. Microsoft media player. 3. Better alternative to windows which is highly vulnerable to virus threat.00 3 2 2 3 0. DOS System 2.45 0.12 0. 3.15 0.18 0. Japan sales declining.06 0.20 0.48 4 4 4 3 0. Development of next generation computer system with voice recognition.18 0.30 0.18 2. Total. Product line diversification.08 0. 0. Only 3% market share in PC.3 .CHOOSING THE FINAL STRATEGY: (Quantitative Strategic Planning Matrix – QSPM) Key External Factors Weight Product Development AS TAS Market Penetration AS TAS Opportunities 1.06 1. 4.32 0.36 Threats 1.18 3.99 2 3 4 3 0.12 4 3 3 4 0.80 0.24 0.

3.60 0.28 0. 5.00 1 1 2 0. Highly innovative products. Total. 2.18 0.16 0.32 0.27 5. Production delays.14 0.22 Sum Total Attractiveness Score 5.08 0. Most profitable company in industry. 4.12 2. 3.06 0. 0.08 0.12 1.24 0.QSPM Key Internal Factors Weight Product Development AS 4 3 3 4 3 Market Penetration AS 4 3 3 3 4 TAS 0.40 Strengths 1. High inventory and warehousing expenses.10 Weaknesses 1.48 0.60 0. 2. Own retail stores. IPOD 0.14 0. 4. Higher prices – less affordable.10 0.20 0.52 Analyzing key factors through QSPM indicate that Market Penetration will be best strategy for Apple Computers. .e. Brand Loyalty among customers.12 0.30 TAS 0. Top of line product i.08 0.12 0.28 2 2 1 0.24 2.48 0. No direct sales approach.

.Justification of Final Strategy Selection Analyzing case of Apple computers clearly indicates that Apple Computer is highly innovative company with highest profit taking in industry but because of low market share it can not capitalize its products. It is therefore best for Apple computer to aggressively formulate its marketing strategy with innovative products to penetrate into market and capture more share.

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