Balance Scorecard Model for APPLE

The term balanced scorecard (BSC) refers to a strategic management performance metric
used by various organizations to identify and improve various internal business functions and
their resulting external outcomes.

Strategic Measures Targets Initiatives

Objectives
Financial Financial stability Shareholder value Increase sales Creating Apple
(Increase revenue) Ecosystem

Customer Customer Purchase rate, Increase retention Good feedback

satisfaction Retention rate of consumer system

Internal Efficient Efficiency ratio, Maximum Core competency

utilization of Operational efficiency of through hours
Business
resources efficiency innovation, rate, Apple’s
Process Workplace safety Tendering

Learning and Employee Employee attitude Employee Product

learning and new excellence, diversification
Growth
product revenue Sustained demand

Almost every time a company embarks on a new project or strategic goal, the leadership relies
significantly on task delegation, activities, and timetables to assist shape and align each goal.
However, there is frequently little significant visibility or transparency into the status of the
target. While this method isn't inherently incorrect, balanced scorecards can assist in avoiding
potential issues.

1. Learning and growth are analyzed through the investigation of training and knowledge
resources. This first leg looks at how well data is acquired and how well employees use that data
to turn it into a competitive advantage in the industry.

2. Business processes are evaluated by investigating how well products are manufactured. Gaps,
delays, bottlenecks, shortages, and waste are all tracked through operational management.

3. Customer perspectives are collected to gauge customer satisfaction with the quality, price,
and availability of products or services. Customers share input on their current product
satisfaction.

4. To understand financial performance, financial statistics such as sales, expenditures, and

income are used. Dollar quantities, financial ratios, budget variances, and income targets are
examples of financial measurements.
These four legs comprise an organization's vision and strategy and necessitate active
management to analyse the data gathered. A Balanced Scorecard helps a company's management
make important decisions that are in line with the company's goals, allowing them to innovate
and achieve new heights of success. It establishes a foundation on which to build until the
intended outcome is reached. Apple Inc., a prominent technological business, is a well-known
example of a company that uses the balanced scorecard in its operations. iPhone, Apple TV, Mac,
iPad, and iPod are some of Apple's most popular products. Furthermore, Apple, Inc. sells its
goods through Apple stores, third-party physical retail locations, and its direct sales force all over
the world. Apple Inc. utilises five performance indicators:

 core competencies

 employee alignment and commitment

 market share

 shareholder value.

Apple Inc. did not always prioritise its customers. They used to focus on their technology and
products, but since then, they've shifted their focus to client satisfaction, which is now a main
pillar of their business. In order to better serve their customers, Apple, unlike other corporations,
decided to create their own surveys.

To help employees expand their abilities, it's vital to supply them with new solutions like user-
friendly interfaces and effective distribution mechanisms. Many Apple officials, however, fear
that assessing the impact of these remedies will be challenging. In the long run, this American
software company will use quantitative metrics to establish the answers they need and to see if
empowering employees in this way leads to development of their skillsets.

Apple Inc. believes that employee commitment and alignment are essential. As a result, they
undertake a complete employee survey of every organisational branch every two years, with
surveys distributed at random among employees. The goal of the surveys is to see how well each
employee understands their individual plan and how well they can connect it to the bigger
organization's strategy in order to succeed.

Market share is another significant metric, especially for a company in the tech industry. This is
because Apple Inc. benefits not just from capturing as many market shares as possible, but it also
has an impact on the software developers with whom it collaborates.

To increase shareholder value, Apple Inc. invests in its sales vision, product design, global
manufacturing, and operations. This link is used to investigate new business opportunities and
assess a unit's performance. It's also connected to the company's evaluation system. By doing so,
the company hopes to raise funds for future expansion.

Instead of allowing a "managing" strategy based on short or medium-term results, these five
indicators contribute to the management of "long-term performance." By focusing on those five
pillars, each unit may improve its operations and performance over time. Overall, the balance
scorecard helps Apple Inc. maintain track of their performance so that they can fulfil their
established objectives and goals.
Recommendations

Apple has to drastically decrease dependency on iPhone. Since 2007 when Steve Jobs made the
ground-breaking announcement of the iPhone which was huge success . After that whenever a
new iPhone was about to be launched the eagerness to see the new product never came down and
the reason why this happened was because I phones that apple launched back then for genuinely
ground-breaking and if you look at the delta between iPhone and other phones you will see a
stark difference in both of them to tell you about it while other phones at qwerty keypads the first
iPhone was revolutionary because of a huge leap into touch screen and the introduction of the
iconic App Store while other phones were catching up with touch screen iPhone 3G was twice as
fast as the iPhone and the App Store began to have a turn off apps which increase the utility
value of the phone to a large extent. Similarly iPhone 4 was ground-breaking because of
FaceTime HD recording camera and most importantly because of the announcement of I cloud
that enabled apple users to seamlessly navigate between apple devices then we had the iPhone 5
which had fingerprint and Siri was fully functional this was followed by iPhone 6 which is not
just want the best design phones in the world but also said the gold standard for a camera in a
mobile phone this is the reason why iPhone 6 became the highest sold iPhone in history with
more than 222 million units sold but by this time that is by 2015 apple dangerously become
dependent on iPhone where in more than 60% of the entire companies revenue came from just
iPhone sales. This is where things started to change as take got more accessible and competition
began catching up there were only a limited number of ground-breaking announcements that
apple could make for iPhone and as we saw every other phone started having fingerprint, face
unlock, great camera and all thanks to Google Assistant seems to be way better than Siri now and
not so surprisingly iPhone after touching a record of 231 million units has not reached similar
sales in 6 years now and although in 2021 the revenue has gone higher than 2015 with a drastic
increase in the cost of the iPhone the unit sales still seem to be lower than 2015 therefore apple is
on the edge of hitting the ceiling because it can no longer increase the price of the iPhone that is
very less scope to acquire new users unless the price drops drastically and lastly if the price drops
the profit margins are going to take a hit so with the most important pillar of Apple's profit at
stake.

Apple should plan to increase its revenue from software services - which essentially means that
apple is not going to transform from being a hardware company to becoming a software services
company. Apple built its ecosystem with three types of products the first was the entire product
that got you into the ecosystem then you add retainers which are services like I messages, apple
arcade, filming pro because of is when you go to buy another laptop you are more inclined to
choose a Mac book pro which is an upsell product and then after you buy the second apple
product you have the special ecosystem features like airplay and I cloud that type this device is
so well together that it makes it even more difficult breakout of the apple ecosystem but now
apple wants to make a small change instead of having these apps to just act as retainers apple
should build more apps and services and turn them into money machines. apple is deploying the
razor blade model – it is a model wearing a company says the first product at lesser margins so
that they can sell you a low cost high margin products regularly to create a recurring income for
the company now in case of apple this is a very big deal because the most powerful companies in
the world is transforming to this business model. apple is so powerful that it is both capable of
creating new category of products as well as disrupting an age old industry a classic example the
same was the iPad that created a new category of devices and then we saw in accessories industry
being disrupted by Apple Watch within just two years able went to become the largest watch
manufacturer in the world. So now apple should specifically get into software services it should
basic principle of the razor blade model selling software services a high margin recurring income
channel on top of that as a by-product they also act as retainer hooks to keep people in the
ecosystem and if you look at the numbers it's quite evident from 2015 to 2021 while the revenue
from iPhone has steadily risen from approximately 155 billion to 191 billion dollars ,which is an
increase of 23.8% . The revenue from services has increased by 243% going from just 19 billion
to 68 billion dollars while the profit margin from iPhone is just 35% the margin from software
services is nearly 60% E.g. App Store was being run at a profit margin of 78% as of 2019
according to Bloomberg.

By apple entering the sass or software as a service domain. There are three specific areas that
apple should try to cash in the first is using its large amount of data about which apps are the
bestselling apps in the App Store it has actually details about who buys them and what they use it
for apple could directly launch a service that is in direct competition to an existing app creating
an unfair advantage where competition either has to raise its prices or cut its margins short
whereas apple wins both ways. Another way is by getting into super high potential spaces which
includes healthcare and fintech and as you must have seen already they have already laid a solid
foundation with apple card and the Apple Watch while one side apple customer by default the
most premium model in the world making let them perfect audience for financial services on the
other side Apple Watch already has a tremendous amount of data to sell healthcare services to its
customers and this is such a revolution that it has a huge scope of application and aging parents
should share their heart health data which includes pack integration of data because of which
healthcare centres all across the United states can seamlessly access and share patient data with
each other this will enable patients to get done with hospital procedures within a few seconds as
compared to the existing TDs procedure Apple is playing its foundation into a much needed
healthcare system starting from the United states therefore with apple be held up it wouldn't be
surprising if apple became the biggest health insurance company or even the largest credit card
company in the world. Lastly apple should also diversify into product launches like the apple car
project an apple glass which could go on to become the next major pillow for the company.