Apple Inc.

, 2015
Prepared by: Jun Zen Ralph Yap

A. Case Abstract

Apple is the world’s largest corporation based on market capitalization that

designs, manufactures, and markets the world’s single-most popular smartphone, the
iPhone, and other devices like iPad, iPod, iCloud, Mac computers. This strategic
management case includes the company’s fiscal year-end September 2014 financial
statements, competitor information and more. The case time setting is the year 2015.
Sufficient internal and external data are provided to formulate alternative strategies and
recommend thereafter.

B. Vision (Actual)

“We strive to provide users of Apple products the best experience possible
though innovative product designs and software.”

Vision (Proposed)

To be world’s leading and well-known company in the industry of smartphone

and other devices that provides users of the Apple products convenience and best
experience possible through innovative product designs and software.

C. Mission (Actual)

“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.”

Mission (Proposed)

Apple is committed to providing the users (1) latest and innovated products, (2)
high quality products, (3) elegant design and user-friendliness of products, and (4)
unique technology (iOS) compare to other devices (Android-based) in the market. The
company offers unequalled quality of service and accommodates the users first as
striving profitability growth for shareholders.
D. External Audit

Opportunities

1. Economy is growing overseas specifically in China and Japan.

2. In world wherein technology has a vital role, users of the smartphones and
digital devices are increasing rapidly.
3. Creation of new product lines
4. The users demand more wants than needs.
5. Latest provider of application processors that might increase the growth of the
company.
6. Market expansion in other countries like Africa and Australia to reach new
customers.

Threats

1. Strong market competitors like Samsung and Lenovo

2. Unpredictable users preferences
3. Similar technology from other competitors
4. Rising labor cost in countries where the manufacturing plants are located.
5. Users preferably want affordable products than premium offered products.
6. Unauthorized individuals who might hack the system.

External Factor Evaluation (EFE) Matrix

Key External Factors Weight Rating Weighted

Score
Opportunities
1. Economy is growing overseas specifically in 0.10 4 0.40
China and Japan.
2. In world wherein technology has a vital role, 0.09 3 0.27
users of the smartphones and digital devices are
increasing rapidly.
3. Creation of new product lines 0.10 4 0.40
4. The users demand more wants than needs. 0.07 2 0.14

5. Latest provider of application processors that 0.08 4 0.32

might increase the growth of the company.

6. Market expansion in other countries like Africa 0.08 2 0.16

and Australia to reach new customers.
Threats
1. Strong market competitors like Samsung and 0.09 3 0.27
Lenovo
2. Unpredictable users preferences 0.08 2 0.16
3. Similar technology from other competitors 0.09 2 0.18
4. Rising labor cost in countries where the 0.06 1 0.06
manufacturing plants are located.
5. Users preferably want affordable products than 0.09 3 0.27
premium offered products.
6. Unauthorized individuals who might hack the 0.07 1 0.07
system.
Total 1.00 2.70

E. Internal Audit

Strengths

1. The company’s revenues have been increasing as year passes by in every

region they operated.
2. Apple promotes simplicity.
3. Apple products are generally more user friendly than those of Windows, Android,
and other operating systems.
4. Apple Pay’s fingerprint technology is more convenient for users and also more
secure for credit card companies such as Visa, American Express, and
MasterCard.
5. Well-known brand in U.S. and other countries like Europe, China, and Japan
6. Apple has well-trained and knowledgeable salespersons with excellent customer
service.
7. Apple is expanding its retail stores around the world.
8. Apple invests heavily in R&D that helps in keeping up on trend and preferences
of the users.
9. Administrative and Marketing expenses of Apple Company are lower than the
other competitors.

Weaknesses

1. Apple’s current ratio has decreased by 60% as of September 27, 2014.

2. Apple operates from a divisional-by-process design in every region but no
divisional presidents are assigned in reporting sales.
3. Apple’s long-term liabilities have increased drastically due to operational
financing.
4. Apple’s global market share is less than the market share of Android.
 5. There are some bugs and glitches in the service.
6. Apple offers premium price on their products.
7. Apple products are hassle to operate due to frequently updating the system.

Internal Factor Evaluation (IFE) Matrix

Key Internal Factors Weight Rating Weighted

Score
Strengths
1. The company’s revenues have been increasing as 0.09 4 0.36
year passes by in every region they operated.
2. Apple promotes simplicity. 0.06 2 0.12
3. Apple products are generally more user friendly 0.07 3 0.21
than those of Windows, Android, and other operating
systems.
4. Apple Pay’s fingerprint technology is more 0.05 2 0.10
convenient for users and also more secure for credit
card companies such as Visa, American Express, and
MasterCard.
5. Well-known brand in U.S. and other countries like 0.07 4 0.28
Europe, China, and Japan
6. Apple has well-trained and knowledgeable 0.05 3 0.15
salespersons with excellent customer service.
7. Apple is expanding its retail stores around the 0.06 2 0.12
world.
8. Apple invests heavily in R&D that helps in keeping 0.08 4 0.32
up on trend and preferences of the users.
9. Administrative and Marketing expenses of Apple 0.05 2 0.10
Company are lower than the other competitors.
Weaknesses
1. Apple’s current ratio has decreased by 60% as of 0.09 2 0.18
September 27, 2014.
2. Apple operates from a divisional-by-process design 0.06 1 0.06
in every region but no divisional presidents are
assigned in reporting sales.
3. Apple’s long-term liabilities have increased 0.05 2 0.10
drastically due to operational financing.
4. Apple’s global market share is less than the market 0.06 2 0.12
share of Android.
5. There are some bugs and glitches in the service. 0.05 1 0.05
6. Apple offers premium price on their products. 0.05 2 0.10
7. Apple products are hassle to operate due to 0.06 1 0.06
frequently updating the system.
Total 1.00 2.43

F. SWOT Strategies

Strengths
1. The company’s revenues
have been increasing as year
passes by in every region
they operated.
Weaknesses
1. Apple’s current ratio has
decreased by 60% as of
September 27, 2014.

2. Apple promotes simplicity. 2. Apple operates from a

divisional-by-process design
in every region but no
divisional presidents are
assigned in reporting sales.

3. Apple products are 3. Apple’s long-term liabilities

generally more user friendly have increased drastically
than those of Windows, due to operational financing.
Android, and other operating
systems.
4. Apple Pay’s fingerprint 4. Apple’s global market
technology is more share is less than the market
convenient for users and also share of Android.
more secure for credit card
companies such as Visa,
American Express, and
MasterCard.

5. Well-known brand in U.S. 5. There are some bugs and

and other countries like glitches in the service.
Europe, China, and Japan

6. Apple has well-trained and 6. Apple offers premium price

knowledgeable salespersons on their products.
with excellent customer
service.

7. Apple is expanding its retail 7. Apple's products are

stores around the world. hassle to operate due to
frequently updating the
system.
 8. Apple invests heavily in
R&D that helps in keeping up
on trend and preferences of
the users.
9. Administrative and
Marketing expenses of Apple
Company are lower than the
other competitors.

Opportunities S-O Strategies W-O Strategies

1. Economy is growing 1. Continue to pursue market 1. Reconstruct the
overseas specifically in China development outside the U.S. organizational structure by
and Japan. specifically in China, Japan assigning president in every
and other countries (S1, S5, region for formalities of
S6, S7, O1, O6) reporting (W2, O6)

2. In world wherein 2. Introduce new, latest, 2. Create a new, affordable,

technology has a vital role, innovative and convenient and convenient products (W5,
users of the smartphones and products that are on the trend W6, W7, O2, O3)
digital devices are increasing (S2, S3, S8, O3, O4, O5)
rapidly.

3. Creation of new product

lines
4. The users demand more
wants than needs.
5. Latest provider of
application processors that
might increase the growth of
the company.
6. Market expansion in other
countries like Africa and
Australia to reach new
customers.
Threats S-T Strategies W-T Strategies
1. Strong market competitors 1. Innovate the current 1. Start-up planning a
like Samsung and Lenovo products that would create strategy of cost minimization
uniqueness and technological (W1, W3, W6, T1, T5)
difference from other
competitors ( S3, S8, T1, T3)
2. Unpredictable users 2. Increase the security of the
preferences system of every user of the
products for safetiness
against unauthorized
individuals (S4, S8, T6)

3. Similar technology from

other competitors
4. Rising labor cost in
countries where the
manufacturing plants are
located.
5. Users preferably want
affordable products than
premium offered products.

6. Unauthorized individuals
who might hack the system.

G. The Internal External (IE) Matrix

The IFE Total Weighted Score

Strong Average Weak

3.0 to 4.0 2.0 to 2.99 1.0 to 1.99

I II III

High
3.0 to 3.99
 IV V VI

The EFE Medium Apple Inc.

Total 2.0 to 2.99

Weighted
Score
VII VIII IX

Low
1.0 to 1.99

H. The Quantitative Strategic Planning Matrix (QSPM)

Strategic Alternatives Continue to pursue Innovate the current

market development products that would
outside the U.S. create uniqueness and
specifically in China, technological difference
Japan and other from other competitors
countries
Key Factors Weigh AS TAS AS TAS
t
Opportunities
1. Economy is growing 0.10 4 0.40 2 0.2
overseas specifically in
China and Japan.
2. In world wherein 0.09 3 0.27 2 0.18
technology has a vital
role, users of the
smartphones and
digital devices are
increasing rapidly.
3. Creation of new 0.10 3 0.30 4 0.4
product lines
4. The users demand 0.07 2 0.14 1 0.07
more wants than
needs.
5. Latest provider of 0.08 3 0.24 3 0.24
application processors
that might increase the
growth of the
company.
6. Market expansion in 0.08 4 0.32 3 0.24
other countries like
Africa and Australia to
reach new customers.
Threats
1. Strong market 0.09 3 0.27 2 0.18
competitors like
Samsung and Lenovo
2. Unpredictable users 0.08 - - - -
preferences
3. Similar technology 0.09 2 0.18 3 0.27
from other competitors
4. Rising labor cost in 0.06 - - - -
countries where the
manufacturing plants
are located.
5. Users preferably 0.09 2 0.18 3 0.27
want affordable
products than premium
offered products.
6. Unauthorized 0.07 2 0.14 3 0.21
individuals who might
hack the system.
Total 1
Strength
1. The company’s 0.09 4 0.36 3 0.27
revenues have been
increasing as year
passes by in every
region they operated.
2. Apple promotes 0.06 1 0.06 2 0.12
simplicity.
3. Apple products are 0.07 2 0.14 3 0.21
generally more user
friendly than those of
Windows, Android, and
other operating
systems.
4. Apple Pay’s 0.05 2 0.10 3 0.15
fingerprint technology
is more convenient for
users and also more
secure for credit card
companies such as
Visa, American
Express, and
MasterCard.
5. Well-known brand in 0.07 4 0.28 2 0.14
U.S. and other
countries like Europe,
China, and Japan
6. Apple has well- 0.05 3 0.15 2 0.1
trained and
knowledgeable
salespersons with
excellent customer
service.
7. Apple is expanding 0.06 4 0.24 2 0.12
its retail stores around
the world.
8. Apple invests 0.08 2 0.16 4 0.32
heavily in R&D that
helps in keeping up on
trend and preferences
of the users.
9. Administrative and 0.05 2 0.10 2 0.1
Marketing expenses of
Apple Company are
lower than the other
competitors.
Weaknesses
1. Apple’s current ratio 0.09 2 0.18 2 0.18
has decreased by 60%
as of September 27,
2014.
2. Apple operates from 0.06 - - - -
a divisional-by-process
design in every region
but no divisional
presidents are
assigned in reporting
sales.
3. Apple’s long-term 0.05 2 0.10 1 0.05
liabilities have
increased drastically
due to operational
financing.
4. Apple’s global 0.06 - - - -
market share is less
than the market share
of Android.
5. There are some 0.05 1 0.05 1 0.05
bugs and glitches in
the service.
6. Apple offers 0.05 2 0.10 3 0.15
premium price on their
products.
7. Apple products are 0.06 1 0.06 2 0.12
hassle to operate due
to frequently updating
the system.
Total 1 4.52 4.34

I. Recommendation/s

The Apple Company should continue to continue to pursue market development

outside the U.S. specifically in China, Japan and other countries in order to increase the
market share globally.