Department of Management Sciences

University of Gujrat (Fall-2022)

Student Name Nabia
Roll ID: 22011720-030
Student Name Mahnoor Anjum
Roll ID: 22011720-045
Student Name MUHAMMAD UMAR
Roll ID: 22011720-046
Course Information
Course Title Strategic Finance Course Code MGT-609
Credit hour 3 Semester M.Phil. 1st
Instructor Information
Name Dr. Adnan Bashir Assignment Type Project
Submission Date: 30-January, 2023
Topic: Select the Topic “Apple Inc.” and write up its Introduction, Corporate governance, Strategy
Analysis its Core values and Post Covid-19 effects.
Student Details

Introduction:
Apple is an American corporation founded in California, United states (April 1,1976) that
develops and sells computer electronics, software, personal computers and portable devices
internationally. Founders are Steve Jobs and Steve Wozniak.
Business description:
Apple Inc. has 9 products, 7 services and 378 retail stores worldwide.
Its products include:
 Mac.
 iPad.
 iPhone.
 Watch.
 TV & Home.

It is one of the big five of tech. some of its most popular products include Iphone, Ipad,
Macbook, and Apple watch.
Apple has 147000 employees in numerous departments, including retail, software services,
hardware, machine learning and AI, support and services, design and more.

Apple Software

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  Macos is the operating system for the Mac.
 Ios powers the iphone and ipod.
 Ipados makes the ipad a productivity powerhouse.
 Tvos runs on Apple TV and homepod.
 Watchos makes Apple Watch able to stand on its own.
 Safari is Apple's internet browser.
 Iwork consists of Pages, Numbers, and Keynote.

Company History:
Birth of Apple:
 Steve Wozniak built a CPU for the homebrew computer club, a prototype that what
would later become the Apple I.
 When jobs saw Wozniak’s CPU he insisted that try and sell it, and on April 1, 1976,
Apple computer was born.
 Their first headquarters was the job’s parents’ garage.
 The Apple I included only circuit board. A tape-interface was sold separately. The
Apple I’S initial cost was $666.66.
Apple Reborn:
 Steve job returns as CEO to rebuild and revive the Apple brand.
 Apple work with Microsoft to release new version of Microsoft Office for Mac
 Apple launces the apple store and take the world by storm.
 The iMac gave people enough computing power, at an affordable price.
 Next, Apple introduces their laptop, the iBook and the PowerMac G3.
 Under jobs leadership, apple stock hits an all-time high in March 2000 at $130 a
share.
Products History:
1976: Steve jobs and Steve Wozniak registered Apple.
Apple I one of the first PC.
1977: Apple II the first popularly used PC , profits in millions of dollars approximately 335
million.
1984: Macintosh- the first PC with a graphic interface.
1985: Steve jobs leave the company

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1991: PowerBook- the notebook (laptop) that has become the model for other PCs of its
kind.
1993: Apple Newton- the first PDA (personal digital assistant- a pocket PC)
1997: Steve jobs return to the company.
1998: iMac- a series of Mono block PCs that were appreciated, among other things, for their
advanced design.
2001: iPod- a media player that took absolute command of the market due to its convenient
features and simple design.
2007: iPhone- a smart phone with revolutionary multi-touch technology that instantly
became a top seller on the market.
2010: iPad- tablet PC with multi-touch technology that became a sensation in 2010.

Figure 1: Apple Products

Name History:
According to Steve jobs the, Apple was so named because jobs was coming back from an
apple farm and he was on fruitarian diet.
He thought the name was “fun, spirited and not intimidating”.
Evolution of Apple Logos

Figure 2: Apple Logos Evolution

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Apple Services:
Advertising
The Company’s advertising services include various third-party licensing arrangements and
the Company’s own advertising Platforms.
Apple Care
The Company offers a portfolio of fee-based service and support products under the
AppleCare brand. The offerings provide priority access to Apple technical support, access to
the global Apple authorized service network for repair and replacement services, and in many
cases additional coverage for instances of accidental damage and/or theft and loss, depending
on the country and type of product.
Cloud Services
The Company’s cloud services store and keep customers’ content up-to-date and available
across multiple Apple devices and Windows personal computers.
Digital Content
The Company operates various platforms, including the App Store, that allow customers to
discover and download applications and digital content, such as books, music, video, games
and podcasts.
Payment Services
The Company offers payment services, including Apple Card, a co-branded credit card, and
Apple Pay, a cashless payment service.
Corporate Governance:
Corporate governance is the system used by any corporation to govern the actions of the
senior management and employees of the corporation. Corporate governance is a way of
conducting business that is ethical and will bring the best return for the shareholders of the
company. Corporate governance is the set of guidelines that determines the control and
organization of a particular company. The company’s board of directors is in charge of
approving and reviewing changes to this set of formally established guidelines. Companies
have to keep in mind the interests of multiple stakeholders, parties who have an interest in the
company. Some of these stakeholders include customers, shareholders, management, and
suppliers. Corporate governance’s focus is concentrated on the rights and obligations of three
stakeholder groups in particular: the board of directors, management, and shareholders.
Corporate governance determines how power is split between these three stakeholders.

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A company’s board of directors is the main stakeholder that influences the corporate
governance of a company (Corporate Governance).
Apple’s Corporate Governance
Apple’s Board of Directors oversees the Chief Executive Officer and other senior
management in the competent and ethical operation of Apple on a day-to-day basis and
assures that the long-term interests of shareholders are being served. To satisfy the Board’s
duties, directors are expected to take a proactive, focused approach to their positions, and set
standards to ensure that Apple is committed to business success through the maintenance of
high standards of responsibility and ethics
Structure and Situation
The structure of corporate governance determines the distribution of rights and
responsibilities between the different parties in the organization and sets the decision-making
rules and procedures. It is usually up to the management board to decide how the company
will develop. Apple’s corporate governance structure is defined by having a strong Board of
Directors, good oversight by senior management, and several corporate governance
documents. Apple has eight people on their Board of Directors. Seven of the eight are outside
directors with high levels of experience in legal, political, technological, and other fields. The
Board has several committees including the audit committee, the compensation committee,
and the nominating and corporate governance committee. In 2011, Apple's compensation
committee decided to reduce stock options for Board members and to defer options to
subsequent years. The thinking behind the change is that it would encourage the Board and
senior management to remain invested in the company doing well for many years to come.
This Apple Organizational Chart illustrates the company’s hierarchical and functional
structure. The late Steve Jobs, the company’s founder and former CEO created such a
structure to ensure the focused realization of his unique ideas and clear vision. Since Tim
Cook took over as CEO of Apple in August 2011, the company’s organizational structure has
undergone some changes. Mr. Cook, in particular, embraced decentralization of decision-
making to some extent to encourage innovation and creativity at various levels. Nonetheless,
the structure is largely hierarchical. This Apple Organizational Chart also displays product-
based grouping.
Responsibilities
One of Apple's governance documents is the Corporate Responsibility Policy. The Corporate
Responsibility Policy is used to encourage Apple employees to exercise good judgment and

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be strong citizens. It includes the "Global Volunteer Program" that is used to encourage
employees all over the world to volunteer their time to assist charities.
The Apple’s corporate governance strategy operates on the pillars of transparency,
accountability, leadership, and strong standards of corporate management, which is
reinforced by the board of directors. The board of directors has the responsibility of
managing the affairs of the company in addition to setting the business approach. The board
also creates the risk management and mitigation policies besides ensuring that the company is
compliant with different regulatory obligations such as business ethics, executive
performance, and flexible organization culture. Within the five departments of the Apple
Company, there are teams allocated the responsibility of full material disclosure, governance,
and direct engagement of the community in the business activities. Among the community
engagement initiatives include an education trust, health financing, and supporting different
cultural events
Relationship
Apple's corporate governance also affects the company's relationship with stockholders.
Stockholders of Apple stock want a strong Return on Investment, so they are looking for
Apple's cash dividends to remain stable. Stockholders also look for continuity of the Board
and management team. The relationship with stockholders has a significant effect on the
review of these areas.

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Strategy Analysis:
Apple business strategy can be classified as product differentiation. Specifically, the
multinational technology company differentiates its products and services on the basis of
simple, yet attractive design and advanced functionality.
Apple business strategy consists of the following four elements:
1. Focus on design and functionality of products.
According to its business strategy, Apple has adapted advanced features and capabilities of its
products and services as bases of its competitive advantage. The list of innovations
introduced by Apple include, but not limited to the introduction of iPad, the first device of its
kind that stored thousands of songs with a simple shuffle capabilities through songs,
development Macintosh, the first computer to use a graphical user interface and the launch of
iMac that “ripped up the computer design rule book, doing away with dull beige boxes and
instead replacing them with fun, translucent machines in shades such as “Bondi Blue” that
hinted at the aesthetic Apple would become so well-known for.” First mover advantage is
another element of Apple competitive advantage. It has to be stated that Apple competitive
advantage may be challenging to be sustained for long-term perspective. Specifically, the
management may fail in terms of ensuring the addition of innovative features and capabilities
in new versions of its products, thus compromising its competitive advantage.
2. Enhancing customer experience. 
Focusing on customer experience is one of the pillars of Apple business strategy. It is not rare
for Apple fans to create videos of themselves unwrapping their new Apple products and
uploading the video on YouTube. This happens because the company has succeeded in
creating a customer experience that extends beyond the purchasing process of a product.
For example, starting using any Apple product is extremely easy. Customers open the box,
plug to electricity, turn on and start using products. There is no need to install or download
anything. More than 500 Apple Stores in 25 countries and regions, where people can try
products and ask helpful staff questions effectively also contributes to customer experience.
3. Strengthening Apple ecosystem.
Apple business strategy can be characterized as vertical integration in a way that the company
has advanced expertise in software, hardware, and services at the same time. Apple’s vertical
integration is one of the major factors that set it apart from the competition. The company has
been benefiting from its vertical integration immensely. Specifically, an important source of
Apple competitive advantage relates to its ecosystem, which is enabled by such integration.

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Apple devices and software sync easily and work well with each other. Applications work on
multiple Apple devices at the same time and there is no much difference in user interfaces.
However the same items do not pair with products of other companies, thus creating the likes
of a closed ecosystem. Apple’s ecosystem creates switching costs for its customers to the
competition. The ecosystem also provides the opportunities to leverage relationships with
existing customers to offer other products and services.
4. Decreasing dependence of the business on the sales of iPhones.
Apple business strategy is transitioning from relying on iPhone sales to prioritizing its
services business and other divisions. John Giannandrea has been promoted to a machine
learning and AI role, retail chief Angela Ahrendts left the company and Bill Stasior has been
removed as a head of Siri. These high-profile changes that took place within the timeframe of
less than three months are clear indication of company’s focus on services and other business
divisions in order decrease dependence of the business on the sales of iPhones.
It is important to note that these and other efforts are showing positive results. Specifically,
Apple’s services business division generated record revenues of USD 5,377 billion in 2020,
an increase of 16% compared to the previous year.
Apple’s Mission & Vision Statement.
Apple’s Mission is “to bring the best user experience to its customers through innovative
hardware, software, and services.” And in a manifesto dated 2019, Tim Cook set the Vision
as “We believe that we are on the face of the earth to make great products, and that’s not
changing.”
Apple’s Core Values:
In a statement published on September 23, 1981, management defined Apple Values as “the
qualities, customs, standards and principles that the company as a whole regards as desirable.
They are the basis for what we do and how we do it. Taken together, they identify Apple as a
unique company.”
Below you can find the original Apple core values:
 One person, one computer.
 We are going for it and we will set aggressive goals.
 We are all on the adventure together.
 We build products we believe in.
 We are here to make a positive difference in society, as well as make a profit.
 Each person is important; each has the opportunity and the obligation to make a
difference.

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  We are all in it together, win or lose.
 We are enthusiastic!
 We are creative; we set the pace.
 We want everyone to enjoy the adventure we are on together.
 We care about what we do.
 We want to create an environment in which Apple values flourish.
THE IMPACT OF COVID-19:
Sales:
COVID-19 has had an impact on retail outlets, and iPhone sales in China are down this year.
Previously afflicted by the domestic pandemic, Apple has finished its offline retail outlets for
several days in a row, while mobile phone sales have plunged. According to data from the
domestic mobile phone market provided in February by the China Academy of
communications and communications, the domestic mobile phone market shipped 6.341
million units in February, a 54.7 percent reduction year on year. In January and February,
26.7 million units were supplied, a 42.1 percent decrease year on year. It's worth mentioning
that Android phones sent roughly 5.84 million messages in February, while iPhones sent
about 490000. This indicates that phone shipments in February declined by 770000 (62%)
year on year and 1.82 million (78%) month on month. The closing of shops had a tremendous
impact on Apple. This time, eliminating all retail outlets outside of Greater China will result
in a substantial drop in Apple's mobile phone sales since retail stores are critical to Apple's
business model. Marketing and promotion of items at a physical retail business fosters a
relationship between the staff and the customer. Product sales are directly affected by
employee-customer engagement and communication.
Supply Chain:
A novel profit model has been adopted by Apple, which differs from the traditional
manufacturing industry of controlling product costs. Apple's combined marketing strategy of
"hardware + iTunes software + content" is a novel profit model. Rather than selling products,
apple sells an integrated "solution" that meets people's demands in life, work and
entertainment. Based on this unique closed ecosystem design, Apple has the confidence to
adopt the skimming pricing method, which means that the products have high pricing and
high gross profit. Although the unit charges for music, application software and other
services are low, they are "profit without cost", 63.7%. The traditional product value chain
suggests that Apple has built its primary competitiveness on the two ends of the "Smiling
Curve" with the greatest value: research and development and marketing, capturing the most

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significant profit space, while Apple has primarily outsourced assembly and manufacturing in
low-value areas. Since 1998, the cook has implemented drastic reforms in Apple's
manufacturing and supply chain, putting pressure on its vast inventory. He closed all factories
and will manufacture outsourcing products worldwide. He also shut down many warehouses
and domestic distribution centers at the same time and arranged supply chains near the
factories of Apple's outsourcing manufacturer partners. The result has been a dramatic
reduction in Apple's inventory and fixed asset investment, allowing Apple to become a
standard "light company" that focuses on marketing and R & D. A large proportion of
Apple's suppliers come from China. Perhaps because the Chinese government's reasonable
supervision of the epidemic has recovered faster than other countries, it has no significant
impact on product sales.
Consumers:
According to M.B.L.M., 50 percent of the 3000 U.S.U.S. customers assessed during the
epidemic utilized Apple's products and services more than normal. During the pandemic,
Apple's good system product ecological chain provided tremendous ease to workers who
worked from home. Prior to the virus, 33% of users stated they were "inseparable" from
Apple and its services. This proportion increased to 40% last year and will reach 48% by
2021. Similarly, the share of "close users" has risen from 41% before the new crown to 51%
in 2020 and 52% this year. Prior to the pandemic breakout, around 22% of customers were
prepared to pay a 20% premium for Apple products, growing from 21% last year to 29% in
2021. As can be seen, the pandemic has increased customer reliance on Apple.
STRATEGIES IN COVID-19:
The global proliferation of COVID-19 is altering the global economic climate and business
model. To meet the difficulties, Apple's methods must evolve to keep up with the times.
According to experts, the main reason is that previous models were unsuitable for
videoconferencing applications like Zoom, which are essential for team meetings and small
classrooms. Laptops have benefited the most from the pandemic's technological
advancements, since employment is becoming more flexible.
Diversification of Products:
Apple's choice to expand its services division paid off during the pandemic, yielding the
highest-ever revenue and assisting the company in defending itself against downturn in
certain of its areas. Apple should continue to develop a wide range of consumer electronic
gadgets, such as smart phones (iPhone), tablets (iPad), PCs (MAC), smart watches (Apple
Watch), and TV boxes (Apple TV). The iPhone accounts for the vast bulk of Apple's total

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income. Furthermore, Apple provides its clients with a variety of services such as Apple
Music, iCloud, Apple Care, and Apple Pay. Apple's devices use software and semiconductors
created in-house, and the company is well renowned for its combination of hardware,
software, and services. Apple's goods are sold online, in companyowned shops, and through
third-party merchants.
Building Subscription Income:
Apple's move to expand into a subscription-based company, as anticipated some years ago,
has aided. Apple's previous product-driven income generating approach depended
significantly on developing extremely popular electronic goods, leaving the company
vulnerable if economies fell or customer enthusiasm decreased. Apple currently provides an
Apple Card-based payment plan for iPhones and has stated that it is "working on offering this
for other items as well." Even during a crisis, subscription income is more predictable. This
might help Apple maintain a consistent income.
Focusing on Telework:
Working remotely has increased productivity among certain of the Company's workers while
significantly cutting management expenditures. People are becoming more acclimated to
working and learning from home, and this trend is likely to continue. The message must be
that, rather than perceiving remote working as a temporary business disruption, Apple can
simplify the experience in order to boost both company efficiency and employee autonomy.
Increasing Online Service and Sales:
Before COVID-19, Apple's retail outlets primarily acted as a point of sale, product repair, and
servicing. During the epidemic, though, Apple was forced to reconsider the format of its
shops and relocate some of those experiences online. Apple, like other retailers, is balancing
its in-store and online offerings as customers resume normal buying patterns.
Strengthening the Apple Ecosystem:
Apple's business model is vertical integration in the sense that the corporation has advanced
competence in software, hardware, and services all at the same time. Apple's vertical
integration is one of the key aspects that distinguishes it from the competitors. The Company
has reaped enormous benefits from its vertical integration. In particular, an important source
of Apple's competitive advantage is its ecosystem, which is enabled through such integration.
Apple devices and software are simple to sync and operate well together. Applications run on
many Apple devices at the same time, with no change in user interfaces. However, the similar
things do not pair with other firms' products, resulting in the appearance of a closed
ecosystem. Apple's ecosystem raises the cost of moving to the competition for its users. The

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ecosystem also gives opportunity to utilize current customer connections to provide more
products and services.
References:
https://thinkmarketingmagazine.com/get-ahead-of-the-curve-using-data-driven-storytelling/
https://fourweekmba.com/apple-mission-statement-vision-statement/
Apple’s Greatest Innovations (2016) The Telegraph, Available
at: http://www.telegraph.co.uk/technology/picture-galleries/6099399/Top-10-Apple-
innovations.html

Broussard, M. (2019) Apple’s Recent Leadership Changes Suggest Transition From iPhone
Reliance to Focus on Services, Mac Rumors, Available
at: https://www.macrumors.com/2019/02/18/apples-leadership-changes-services/

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