Submitted by:

Navneet Daga (08015)  

Shishir Saralesh (08022)
Soumik Mukherjee (08024)
Sourabh Kumar Saha (08025)
Sudipta Das (08027)
Apple
Think Differently
Innovation part of corporate structure
Introspective, self-contained operating style
Redefines each market it enters by creating brilliant gadgets
Put the competition to shame
Operates through five operating segments: Americas, Europe,
Japan, retail and others
 Number of acquisitions during 2002
Acquired Prismo Graphics, Silicon Grail
Assets of Zayante, music software manufacturer Emagic, assets
of Nothing Real
Created Digital image in market

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Apple and Music World
i-Tunes “2003”.Music Downloading software
Signed licensing agreements Beggars Group, Sanctuary
Records Group and V2
Added tens of thousands of additional independent tracks
from leading artists
 Introduced its fourth generation iPod portable digital
music player in 2003
Collaborated with Acura, Audi, Honda and Volkswagen
to deliver iPod with their car stereos
Introduced mobile phone with iTunes in collaboration
with Motorola and Cingular Wireless

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Organizational change
Eight Steps for Organizational Change
establishing a sense of urgency
forming a powerful coalition
creating a vision
communicating the vision
 empowering others to act on the vision
 planning for and creating short term wins
consolidating improvements
still more change
institutionalizing new approaches

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Crucial Success Factors
Operating system is developed in house
 Very large degree of control over its product in
features
Apple fosters a research intensive office environment
Releasing products with the current trends and styles
Ignoring Market research & Competitor Analysis
Intensive investment in R & D. Ignoring Fads

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Brand building
Brand identity= Name + Logo + Slogan
Name: Apple is a familiar word /friendly name
Logo: Bite taken Apple: simple and memorable
Slogan: “thinking different” is short and says a lot
"heartfelt connection with its customers.
 Building trust to establishing a community around a
product
 "Apple's design is people-driven“
Promise a great customer experience with their
products.
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Apple and Steve Jobs
In 1996, Apple bought NeXT, and with it came Steve
Jobs
In 2000, Jobs became the full CEO of Apple
Success of the iMac
Jobs continues to innovate the computer industry
 Heading projects like the iPod, iTunes
Heading the computer industry
Apple entered a new phase of growth and profitability

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Without Steve Jobs
In May of 1985, Sculley announced another reorganization
New general manager of the Mac intosh Division to
replace Jobs
 Jobs operating role in the company as chairman was
taken away.
On September 17, 1985, he resigned from Apple
Lost about $1 billion on $7 billion in revenue
Did very poorly in the early and mid 90’s,
Brought on by poor leadership and stagnating computer design

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 SWOT Analysis
Strengths
Weaknesses
•Global presence
•Low returns
•Brand image
•Dependency for key
•Synergistic portfolio
components
•Strong media content

Opportunities Threats
•Wireless products •Strong competition
•New digital platform •Slow Eurozone economy
•MP3 player market Lawsuits

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 Key Financial Ratios
BALANCE SHEET RATIOS 2008-09

Financial
Company Industry S&P 500
Condition
Debt/Equity
0.00 0.09 1.24
Ratio
Current Ratio 2.5 2.3 1.3
Quick Ratio 2.5 2.3 1.1
Interest
NA 1.6 24.3
Coverage
Leverage Ratio 1.5 2.0 3.9
Book
39.47 34.81 18.15
Value/Share
 RETERN ON INVESTMENT

Apple PEER COMPANIES STOCK MARKET

Investment Returns % Company Industry S&P 500

Return On Equity 31.9 31.4 18.7

Return On Assets 19.4 17.3 5.9

Return On Capital 27.2 24.5 8.1

Return On Equity (5-Year 29.2 32.4 14.1

Avg.)

Return On Assets (5-Year 17.9 16.8 6.4

Avg.)

Return On Capital (5-Year 26.3 26.3 8.6

Avg.)
 10 YEARS COMPARISON OF RATIOS

Net Profit
Price/ Price/
  Avg P/E Margin
Sales Book
(%)
09/09 13.30 3.86 5.19 19.2
09/08 24.00 3.09 5.11 16.3
09/07 26.50 5.55 9.21 14.2
09/06 29.20 3.50 6.59 10.3
09/05 24.10 3.27 5.98 9.5
09/04 38.80 1.74 2.88 3.2
09/03 89.80 1.21 1.80 1.1
09/02 112.80 0.93 1.29 1.1
09/01 -185.80 NA 1.39 -0.7
09/00 23.70 1.16 2.10 9.8
 MANAGERIAL RATIOS

APPLE PEER STOCK MARKET

COMPETITORS
Management Company Industry S&P 500
Efficiency
Income/Employee 272,828 236,052 35,703

Revenue/Employee 1 Mil 1 Mil 321,055

Receivable Turnover 17.7 16.7 13.5

Inventory Turnover 56.8 55.2 7.0

Asset Turnover 1.0 1.1 0.7

Key Lessons
 Apple has high R&D costs
 Apple is far less cost effective in a very saturated
market
Customers get scared of an operating system that
looks different then windows
Assume it doesn’t work the same.
Hinders the ability of Apple to steal away existing PC
users to grow its market share.
Apple has problems with some customers due to the
high prices of many of their products

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      Thank You     

Thankyou

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