Apple Inc.

Company Information

Founded By:

Steve Ronald
Steve Jobs
Wozniak Wayne

i) Year of establishment : April 1976

ii) It was incorporated as Apple Computer, Inc. in January
1977
iii) was renamed as Apple Inc. in January 2007
 I. Current Situation
Current performance

Revenue Gross Profit

between $75.5 margin between other income of
billion and $77.5 39 percent and $400 million
billion 40 percent.
 Financial performance

46 billion
215.64 53.39 [2016]
233.72 billion billion billion
39.51
[2015] [2016] [2015]
182.8 billion billion
[2014] 37.04
[2014]
170.9
41.73 billion
billion [2013]
billion
115.5 [2013]
[2012]
billion
[2012]
 Current market share of Apple Inc.

Period Samsung Apple Huawei OPPO vivo Others

2015Q3 23.3% 13.4% 7.6% 3.2% 2.9% 49.6%

2015Q4 20.4% 18.6% 8.2% 3.6% 3.0% 46.2%

2016Q1 23.8% 15.4% 8.4% 5.9% 4.4% 42.1%

2016Q2 22.8% 11.7% 9.3% 1.0% 5.9% 40.2%

 Slogan

“Think Different”
 Products of Apple Inc.

i) Apple Watch, iPad, iPhone

& iOS
ii) Mac
iii) Software
iv) Apple Music, Apple TV,
iPod & iTunes
Competitors

Samsung

Google

Microsoft
 II. Corporate Governance
Board of Directors

Ronald M. Shaich Larry J. Franklin Fred K. Foulkes

 III. External Environment
Political Economical

• Tax policy, • Interest rates

• Employment laws • Exchange rates
• Environmental regulations • Inflation rate
• Tariffs
• Political stability.
 Cont…
Social Technological
• Purchasing power of the • New innovative Technology.
common has risen. • Rapid change of technology
• Purchasing of luxury
products have gone up,
 Cont…
• Industrial Environment:
Potential New Entrants: (high)
 In industry entry barrier is low
 Because of new entrance the value of market shares of Apple may
relatively low
 Cont…
• Bargaining Power of Customers: (High)

There are essentially two points of further analysis within this force:
i. the individual bargaining power of buyers
ii. their collective bargaining power
 Cont…
• Bargaining Power of Suppliers: (Low)
Usually in electronics products have many brands and many suppliers.

switching cost is low in electronics product. Apple Inc. has relatively low
bargaining power of supplier because Apple has specific suppliers.
 Cont…
• Threat of Substitutes: (High)
Apple has the threat of substitute products. Because of lower switching cost
customers can easily switch their product choice so Apple has to think
about maintaining their quality, features and price also.
 Cont…
• Rivalry between Existing Firms: (High)
Because there are so many competitors.
these are Microsoft, Samsung, google etc.
Opportunities

O1. Distribution network expansion .25 3.90 0.98 New market

O2. Creation of new product lines .20 3.7 0.74

Threats

T1. Aggressive competition .20 4.10 .82

T2. Rising labor cost .10 3.95 0.40

Total 1.00
 IV. Internal Environment
Corporate Culture

The culture of Apple is based on an ideal that self-motivated

individuals will work harder if they do not have a boss. so the
Steve Jobs ensured that everyone will work together and no one
will not dominated by boss
 Core Competency

Product
differentiation

Maintaining Core Customer

Secrecy Competency loyalty

Superior brand and

product placement
 Organizational Activities Analysis

Marketing Finance
• Analyze Competitors • 48% increase in net income of
• Build Brand Awareness $25,845 million in 2010.
• Optimize Distribution • Sales increased 4.2% in fiscal
2009 to $1,153.3 million
compared to $1,106.3 million
in fiscal 2008.
 Cont…
Human Resources Management Management Information System
(HRM) (MIS)

HR Strategy at Apple Make Their • Apple Inc. In the present age,

Employees Creative and Innovative.
Apple is the world's second-
A success of a company is not only
largest information technology
a result of incredible manufacturing
capability and great location. Many company. Therefore, in order to
times, HR strategy becomes the apple MIS knowledge and skill
reason for company to stand strong into the reality, Apple is supposed
and grow big to rule the world.
to be an appropriate firm to
Apple is one example of such
company.
analyze MIS issues.
 Cont…
Operation and logistics
• Apple’s primary focus is to
develop reliable, innovative
devices that will improve people’s
way of life. They prefer to work
with logistics partners who have
the experience, network, and
expertise to move high volumes of
product quickly and without
damage or loss.
Research and development
• R&D provide the Apple Inc. with
competitive advantage by
maintaining the consistency of
quality and also developing new
ideas, uniqueness, immediate
solving the arising issues and by
the executive functions of
product.
 Internal Factor Analysis Summary of Apple Inc.

Strengths
S1. Effective innovation process .20 4.00 0.80 Good R&D efforts

S2. Strong brand image .20 4.10 0.82 High and customer
satisfaction lavel
.

Weaknesses
W1. Sales
limited mainly to high- .20 3.90 0.78 More focus on
development
end market

.10 3.05 0.31 Not focusing on a specific

W2. Limited distribution network
strategy.

Total 1.00 3.96

 SFAS Table

S1. Effective innovation process .20 4.20 0.84

S2. Strong brand image .20 4.00 0.80

W1. Sales limited mainly to high-end .20 3.90 0.78

market
W2. Limited distribution network. .10 3.05 0.31

O1. Distribution network .25 3.90 0.98

expansion
O2. Creation of new product lines .20 3.7 0.74

T1. Aggressive competition .20 4.10 .82

T2. Rising labor cost .10 3.95 0.40

Total 1.00
 Identification of strategic Issues
(Tows Matrix)
Strength Weakness
IFAS i) Effective innovation process. i) Sales limited mainly to high-
ii) Strong brand image end market.
ii) Limited distribution
EFAS network.

Opportunity SO Strategies WO Strategies

i) Distribution network Through its effective Apple Inc .can also use
expansion. innovation power they can strengths to exploit the
ii) Creation of new product create new product line. opportunity to expand its
lines distribution network.

Threats ST Strategies WT Strategies

i) Aggressive competition Through its effective innovation Apple inc. can shift or new
ii) Rising labor cost power they can reduce aggressive production line in outside US
competition where labor cost is low
 Strategic Alternatives &
Recommendation
Alt-1: Apple Inc .can also use strengths to exploit the opportunity
to expand its distribution network.
Pros: It will create and capture more market share.
Cons : Needed to hire expertise manager.

• Alt-2: Through its effective innovation power they can reduce

aggressive competition
Pros: Revenue growth will increase and also will be able to get
competitive advantage.
Cons : It will take more time and costly also
 Evaluation and Control
Apple’s SWOT analysis indicates that the company possesses major strengths that
can be used to effectively address organizational weaknesses. The company can
also use these strengths to exploit the opportunity to expand its distribution
network. In addition, Apple can use its strong brand image and rapid innovation
processes to successfully develop and launch new product lines.