Apple Inc.

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A management analysis for Apple Inc within the framework of Strategic Management course for the MSc in Oil & Gas Technology of School of Engineering Technology
Department of Petroleum & Natural Gas Technology - KavTech.

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Apple Inc.

  1. 1. Apple Inc. Team Members:Dimitriadis Savvas Gazis Nikolaos Koukou Katerina Teterina Xenia
  2. 2. Case Abstract• Apple Inc., originally Apple Computer, Inc., is an American multinational corporation headquartered in California that designs, develops, and sells consumer electronics, computer software and personal computers. The company was founded on April 1, 1976, and incorporated on January 3, 1977. The word "Computer" was removed from its name on January 9, 2007, to reflect its shifted focus towards consumer electronics. Its best- known hardware products are the Mac line of computers, the iPod, the iPhone and the iPad. Its software includes the OSX and iOS operating systems, iCloud, the iTunes media browser, the iLife and iWorkcreativity and production suites.• Apple is the worlds third-largest mobile phone maker after Samsung and Nokia. Fortune magazine named Apple the most admired company in the United States in 2008, and in the world from 2008 to 2012. However, the company has received widespread criticism for its contractors labor practices, and for its environmental and business practices. As of August 2012, Apple has 393 retail stores in fourteen countries as well as the online Apple Store and iTunes Store. It is the largest publicly-traded corporation in the world by market capitalization, with an estimated value of US$626 billion as of September 2012. The Apple market cap is larger than that of Google and Microsoft combined. As of September 24, 2011, the company had 60,400 permanent full-time employees and 2,900 temporary full-time employees worldwide; its worldwide annual revenue in 2010 totaled $65 billion, growing to $108 billion in 2011.
  3. 3. Vision Statement• ―We believe that we are on the face of the earth to make great products and thats not changing. We are constantly focusing on innovating. We believe in the simple not the complex. We believe that we need to own and control the primary technologies behind the products that we make, and participate only in markets where we can make a significant contribution. We believe in saying no to thousands of projects, so that we can really focus on the few that are truly important and meaningful to us. We believe in deep collaboration and cross-pollination of our groups, which allow us to innovate in a way that others cannot. And frankly, we dont settle for anything less than excellence in every group in the company, and we have the self-honesty to admit when were wrong and the courage to change. And regardless of who is in what job those values are so embedded in this company that Apple will do extremely well.‖ Timothy D. Cook Apple‘s CEO
  4. 4. Mission Statement• 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.
  5. 5. EFE Matrix The worldwide smartphones market segment is forecast to Opportunities record strong growth in Weight Rating Weighted Score coming years. The shipmentsGlobal smartphone market is on fire1 Global smartphone market is on fire for smartphones are expected 0,10 4 0,402 Increase in worms and viruses on PCs so the antivirus solution can to exceed 400 million globally. be developed by Apple The0,05 4 0,20 number is expected to3 Possible ventures with other companies reach approximately 850 0,02 2 0,044 Downloadable music and MP3 players are highly marketable million by the end of 2013. 0,02 2 0,04 Apple is the third largest5 The demand for tablets is rapidly increasing The online computers sales is 0,04 3 0.12 player in the smart phone increasing over the years.6 The laptop and tablet market growth is high market segment in the 0.21 0,07 3 US Globally, tablet shipments are7 Constant growth of PC and mobile phone industry since launching its first mobile 0,05 4 0.20 expected to touch 150 million8units by 2013. Appleto expand to Huge untapped market launched device, iPhone, in 2007. 0,07 3 0,219the iPad in January internet music and other online programs Growing demand for 2010. In 0,02 2 0,04 FY2010, the services) (cloud based iPad generated $5 billion in revenues and10 Robust outlook for mobile advertising market The0,05 3 0,15 laptop and tablet showed unit sales of 7.511 Strong growth in smartphone segment. 0,07 3 0,21 market growth is high12 Open market in first quarter of million. In the gaming console industry to compete with PS3 and 2011, iPad sales were 7.33 0,01 1 0.01 Xbox million.13 Growing market of ―Green‖ and energy efficient products 0,01 2 0.02
  6. 6. Increasing popularity of Android may affect the attractiveness of Apple‘s iOS affecting the Threats Weight Rating Weighted market share of Apple. The Google Android Score operating system (OS) for smartphone is1 Economic recession can have a significant negative effect on the rapid popularity. With the acquisition gaining company due to higher prices of its products 0,09 2 0,18 of Android Inc. in 2005, and the subsequent Rising popularity of Google launch of Google‘s mobile OS ―Android‖2Android popularity of Google Android and Windows ecosystems in the competitive landscape of Rising and Windows ecosystems changed the mobile and tablet space in the mobile and tablet space 0,06 2 0,12 smartphone business globally. Moreover, the online application store for Android3 Intense competition from Dell, HP, Sony and Toshiba applications ―Android Market‖ is growing at a 0,03 2 0,06 rapid pace. The Android Market currently4 Dependence on specific suppliers 0,02 2 0,04 offers approximately 250,000 apps, compared to 350,000 offered by Apple‘s App Store,5 Companies not seeing Apple as compatible with their software 0,04 1 0,04 although Android has been a late entrant in the6 Downloading free music from other online source without paying market. 0,02 1 0.02 Apple is involveditin several legaliTunes sales cost is common may impact the7actions, including lawsuits alleging Microsoft launched Microsoft Windows 7 and 8 which are gaining patent infringement and antitrust 0,05 2 0.10 market share violations. Many of the suits are from8 The growing tablet market is competing with ipad Apple is involved in several 0,06 smaller companies, but notable plaintiffs 0,02 3 include Nokia. These lawsuits present a legal actions9threat because of the possibility of Apple is involved in several legal actions 0,06 3 0,1810 High product substitution the ongoing unfavorable judgments and 0,03 2 0,06 costs associated with legal defenses. TOTAL 1,00 2.71
  7. 7. IFE Matrix Apple has a strong focus on research and development (R&D) as continual Strengths investment in R&DRating Weighted Score Weight is critical for the development and enhancement of1 iTunes Music Store is an excellent source of revenue, especially with innovative products and technologies. In the iPod and the accessibility on Windows platform. 0,03 3 0,09 addition to evolving its PCs and related2 Apple Computers have good brand loyalty and image by setting high solutions, the company continues to standards for quality and use. capitalize 0,09 convergence of the PC, on the 4 0,36 Strong Research & Development digital consumer electronics and mobile Intel Computers in 2006 – Present3 Partnership withdriving innovation, creating (Intels Department communications by creating and 0,08 0,04 2 microprocessors) (free of viruses) and its own software refining innovations, such as hardware4 Strong Research & Development Department driving innovation, creatingiPod, iPhone, iTunes Store, Apple the its own software (free of viruses) and hardware 0,10 4 TV and iPad. The company‘s R&D 0,40 expenditure was $1,782 million, $1,3335 Creators of high tech technology such as iphone or imac 0.07 4 0.28 million and $1,109 million in FY2010, 2009 and 2008, respectively. The6 Holds 5%brand imageand is 4th largest player in mobile phone market. Strong market share provides an edge over 0.08 3 0.16 company‘s research and development regional and global competitors. The7 18.5% market share of global smartphone market spending is focused on further 0.27 0.09 3 Apple brand is well recognized among developing its existing Mac line of8 Robust financial performance. products enjoy a most consumers. Apple‘s (strengthens investors‘ confidence and personal computers. high level of brand awareness and brand provides capital for future growth avenues) 0.08 4 0.32 Low debt—more maneuverable.its markets. recognition throughout all This is evident with the rapid sales of new9 Entering into new product lines ex: Laptops to iPhones and iPads 0,03 3 0,09 Apple launches. For instance, net sales10 Excellent distribution network globallyservicesits products accessibleApple Computers have good brand of iPad and related products and to make 0.04 4 loyalty and image by setting high 0.16 online $5 billion and unit sales of iPad were was and stores 7.5 million during 2010 standards for quality and use.11 The iOS has given it a lead as compare to its competitors 0.02 3 0.06
  8. 8. Weaknesses Weight AS TAS AS Patent infringement TAS AS TAS lawsuit may affect Weak relationship with Microsoft. (low product Patent infringement. financial condition and 1 0,05 0 0,00 0 0,00 0 0,00 compatibility) operating results. The Apples market share is far behind from major company is involved in 2 0,07 0 0,00 3 0,21 2 0,14 competitor Microsoft. legal complaints relating 3 Its high priced products and accessories make them 0,04 3 0,12 2 to patent infringement. 0,08 4 0,16 inaccessible to many of customers For example, in January It has less presence in B2B market, as compare to its 2010, Nokia filed a competitors like Dell and HP. It can be seen that Apple revised suit against 4 0,03 0 0,00 0 0,00 0 0,00 mainly focuses on B2C so its losing large chunk of Apple with the US market International Trade Comes without expandable memory and the battery is Commission (ITC), 5 0,01 0 0,00 0 0,00 0 0,00 fixed (in mobile products) alleging that Apple has 6 Former CEO Steve Jobs died 0,04 3 0,12 1 infringed Nokia‘s patent 0,04 0 0,00 Coming off of the failure of two items apple tv and s in0,00 almost0all of its 7 0,02 3 0,06 0 0,00 mac mini mobile phones,Apple’s market share is 8 Patent infringement. 0,02 1 0,02 0 0,00 0 0,00 portable music players, far behind from major Not shareholder friendly (did not declare or pay cash and0,00 computers. 0,04 9 competitor Microsoft. 0,04 0 0,00 0 1 dividends in either 2011 or 2010) 10 Product recalls. 0,01 2 0,02 0 0,00 0 0,00 TOTAL 2,36 2,10 3,02
  9. 9. Competitive Profile Matrix CPM Apple Microsoft Dell Samsung NokiaCritical Success factors Weight Rating Score Rating Score Rating Score Rating Score Rating ScoreStore Locations 0,10 4 0,40 3 0,30 2 0,20 2 0,20 3 0,30Financial profit 0,12 4 0,48 4 0,48 2 0,24 2 0,24 2 0,24Consumer loyalty 0,10 4 0,40 2 0,20 2 0,20 3 0,30 3 0,30Market penetration 0,11 3 0,33 4 0,44 2 0,22 4 0,44 3 0,33Advertising 0,07 3 0,21 4 0,28 2 0,14 3 0,21 3 0,21Product variety 0,09 2 0,18 3 0,27 3 0,27 4 0,36 4 0,36Market Share 0,11 2 0,22 4 0,44 2 0,22 3 0,33 3 0,33Product quality 0,08 4 0,32 3 0,24 4 0,32 3 0,24 2 0,16Price competitiveness 0,10 1 0,10 3 0,30 3 0,30 3 0,30 4 0,40e-commerce 0,06 4 0,24 4 0,24 2 0,12 2 0,12 1 0,06Employee dedication 0,06 4 0,24 3 0,18 3 0,18 2 0,12 3 0,18Totals 1,00 3,12 3,33 2,41 2,86 2,87
  10. 10. Financial Ratio Analysis• Apple‘s Annual Report indicates that its business industry is Computer Hardware and its sector is technology. Yet, many analysis consider Apple as being a direct competitor with other hardware manufacturers such as Hewlett-Packard and even Google, yet there is no comparison between Apple and other phone-related manufacturers or devices, through 38% of its business is driven by iPhone and related products. So, such competitors like Samsung or Nokia, should be strongly considered due to the fact that they run its businesses in the same field. This usually happens and is always a challenge when companies have wide product lines with a different marketing mix in each line, like Apple which both belongs to the industry of ―Computer Hardware‖ and ―Telecommunication Services‖.
  11. 11. Financial Ratio Analysis Ratios Apple Google HP Industry Market Cap 498.3 174.48 89.80 320.58% Qtrly Rev Growth 82.70 26.60 3.60 24.30 $ Revenue 108.249 31.12 127.16 87.45 %Gross Margin 39.07 64.97 24.14 39.07 $ EBITDA 36.02 12.16 18.25 26.73%Operating_Margin 29.02 34.35 10.49 31.92 $ Net Income 25.92 8.85 9.12 N/A $ EPS 27.68 27.29 3.92 20.99 Employees 46,600 26,316 324,600 100,300 Price / Earnings 11.9 20.1 -4.9 13.6 Dividend yield% 1.0 N/A 3.9 1.3
  12. 12. Financial Ratio Analysis Ratios Apple Microsoft Dell Samsung Nokia Revenue Net-sales(mil) 108,249 69,943 61,494 86,860 30,376 Gross margin % 40.5 77.7 18.5 25.2 29.3 Operating income 33,790 27,161 3,433 8,413 -0,843 Operating margin % 31.2 38.8 5.6 9.7 -2.8 Net income 25,922 23,150 2,635 7,210 -0,915 Earnings per Share 27.68 2.69 1.35 48.03 -0.24 Dividends N/A 0.61 N/A N/A 0.26 Net margin % 23.95 33.10 4.29 8.3 -3.01 Asset Turnover (Avg) 1.13 0.72 1.70 1.08 1.03 Return on Assets 27.07 23.77 7.29 8.93 3.09 Financial Lvrg (Avg) 1.52 1.90 4.97 1.32 3.05 Return on equity 41.67 44.84 39.31 11.89 -8.87 Return on invested Capital 41.67 38.23 22.44 11.88 -6.24 Current ratio 1.61 2.60 1.49 1.46 1.46 Quick ratio 1.35 2.35 1.26 0.72 1.04Receivable turnover (efficiency 19.9 5.00 9.97 7.60 5.24 ratio)
  13. 13. Financial Ratio Analysis Ratios APPLE DELL HP SAMSUNG GOOGLE INDUSTRY Profitability Ratios Gross Margin (%) 40,05 22,3 24,14 25,2 64,97 39,07 Operating Margin 29,02 5,6 10,49 9,7 34,35 31,92 (%)Return on Assets (%) 27,07 6,9 -4,7 8,93 11,8 8,03Return on equity (%) 41,67 41,86 19,8 11,89 15,5 23,9 EBIT Margin (%) 35,6 6,4 -3,1 N/A 28,1 16,75 Leverage 1,5 4,5 3,7 N/A 1,3 2,75 Liquidity Ratios Current Ratio 1.61 1,49 1,1 1,46 3,9 1,9 Quick Ratio 1,35 1,26 0,6 0,72 3,7 1,5Working Capital per 20.32 7.44 2.7 N/A 128.99 38.9 share ($) Other Ratios Earnings per share 27.68 3.49 3.21 48.03 6.53 15.5Receivable Turnover 19.9 9.97 6.1 7.60 7.0 10.1 Assets Turnover 1.1 1.4 1.0 1.2 0.6 1.06 Interest Coverage 15.6 15.6 N/A N/A 161.1 64
  14. 14. Financial Ratio AnalysisThe table below shows some financial statement data for Apple during the last five yearsFinancial Year 2012 2011 2010 2009 2008Earnings per share Trend of Apple‘s basic ratios during ‗08-‘12($) 44.15 27.68 15.15 6.29 9.08 50Profit Margin (%) 26.67 23.95 21.48 19.19 14.88 45Return on equity 40(%) 42.84 41.67 35.28 31.27 27.19 35Return on Assets(%) 23.70 22.28 18.64 17.34 12.22 30 Return on EquityPrice per sales 25 3.50 2.92 3.20 2.5 Gross Margin 4.41 20 Operating MarginPrice per Earnings 11.89 12.31 15.10 19.04 Return on Assets 30.17 15Price to book ValueRatio 10 4.16 4.12 4.37 3.39 6.81Book Value per 5share ($) 126.1 82.64 52.31 35.32 23.74 0Gross Margin (%) 43.9 2008 2009 40.5 2010 2011 34.4 2012 40.1 34.3Operating Income($ mil) 55,241 33,792 18,387 11,744 6,271Operating Margin(%) 35.3 31.2 28.2 27.4 19.3Assets Turnover 1.07 1.13 1.06 0.99 1.00
  15. 15. SPACE MATRIX Below are provided the most important determinants of the organization overall strategic position. Internal Analysis External Analysis Financial Position (FP) Stability Position (SP) Liquidity 7 Technological changes -1 Earnings per share 6 Price elasticity of demand -6 Sales 7 Competitive pressure -3 Revenues 7 Barriers to entry into Market -4 Return on equity 5 Financial Position (FP) Average 5,8 Stability Position (SP) Average -3,5Liquidity: according to the current ratio Apple is one of themost reliable corporations within the Industry with minimum Technological changes: the Company has been an innovatorinvestment risk in the area of computer hardware and telecommunicationsEarnings per share: the trend during the last years shows that since its recoveryApple from 2008 to 2012 this has been increased four times. Price elasticity of demand: high prices of Apple‘s products isIn comparison to the Industry this ratio shows that Apple is a major weaknessextremely shareholders friendly corporation, which indicates Competitive pressure: the companies which Apple isgreat internal strength competing with, are urban corporations with dynamicSales: is far better from all Apple‘s competitors strategies, both in computer hardware & telecommunicationRevenues: Apple‘s consolidated income statements and sectorbalance sheets note that Apple‘s revenues increased a Barriers to entry into market: the extreme competencewhopping 52 percent in 2010, while its net income increased advantages of the already existing companies in computer70 percent. Also, notice that Apple has zero long-term debt hardware sector, makes it very hard for new companies toon its balance sheet enter the marketReturn on equity: Apple is second among its competitor onreturn on equity
  16. 16. SPACE MATRIX Below are provided the most important determinants of the organization overall strategic position. Internal Analysis External Analysis Competitive Position (CP) Industry Position (IP) Market Share -6 Profit Potential 6 Product Variety -2 Growth Potential 6 Product quality -1 Financial Stability 5 Customer loyalty -1 Resource Utilization 5 Control over suppliers and distributors -3 Competitive Position (CP) Average -2,6 Industry Position (IP) Average 5,5Market share: Apple has a very low market share accordingto S&P industry survey for 2009 Profit potential: today Apple‘s profit potential is at the sameProduct variety: Apple offers a wide range of technological level as industry but according to the trend observed fromproducts, including iPads, iPods, iPhones, iTunes, PCs and 2008-2012 it shows that Apple will soon exceed the industrymore. Apple is perhaps the best known ―first mover‖ Growth potential: demand in computer hardware products iscompany ever, as the firm has a 35-year history of being the expected to increasefirst to introduce blockbuster, successful new products. Financial stability: Apple has minimum long-term debts andProduct quality: Apple meanly focuses on its products quality liabilities that shows its financial stabilityusing the most recent technologies and innovations Resource Utilization: Apple makes reasonable managementCostumer loyalty: The i-halo effect has been synonymous of its human and material resourceswith Apple for the last years. In basic terms its definition iscustomers who buy an i-product, become hooked on Apple‘sproducts and their ease of use.Control over suppliers and distributors: Apple already has avery efficient network of distributors and suppliers andintents to develop it further
  17. 17. SPACE MATRIX• After illustrating the SPACE Matrix it is obvious that the company should follow aggressive strategies. This means that Apple should implement backward, forward, horizontal integration, as well as market penetration, market development, product development and diversification (related or unrelated). X‘X  5,5 + (-2,6) = 2,9 (X,Y) = (2,9 , 2,3) Y‘Y  5,8 + (-3,5) = 2,3
  18. 18. Acquire Red Create a new Develop new Hat Linux QSPM: Quantitative Strategic Planning Matrix game console product lines in or/and Maxtor China and It determines the relative attractiveness of various strategic alternatives (strong R&D or Western India department) Digital Opportunities Weight AS TAS AS TAS AS TAS1 Global smartphone market is on fire 0,10 0 0,00 0 0,00 2 0,20 Increase in worms and viruses on PCs so the antivirus2 0,05 0 0,00 4 0,20 0 0,00 solution can be developed by Apple3 Possible ventures with other companies 0,02 4 0,08 3 0,06 1 0,02 Downloadable music and MP3 players are highly4 0,02 2 0,04 0 0,00 0 0,00 marketable5 The online computers sales is rapidly increasing 0,04 0 0,00 3 0,12 0 0,006 The laptop market growth is high 0,07 0 0,00 3 0,21 2 0,147 Constant growth of PC and mobile phone industry 0,05 0 0,00 1 0,05 4 0,208 Huge untapped market to expand to 0,07 2 0,14 0 0,00 4 0,28 Growing demand for internet music and other online9 0,02 3 0,06 0 0,00 0 0,00 programs (cloud based services)10 Robust outlook for mobile advertising market 0,05 0 0,00 0 0,00 0 0,0011 Strong growth in smartphone segment. 0,07 0 0,00 0 0,00 2 0,14 Open market in gaming console industry to compete with12 0,01 4 0,04 0 0,00 0 0,00 PS3 and Xbox13 Growing market of ―Green‖ and energy efficient products 0,01 0 0,00 0 0,00 1 0,01
  19. 19. Acquire Red Create a new Develop new Hat Linux QSPM: Quantitative Strategic Planning Matrix game console product lines in or/and Maxtor China and It determines the relative attractiveness of various strategic alternatives (strong R&D or Western India department) Digital Threats Weight AS TAS AS TAS AS TAS Economic recession can have a significant negative effect1 0,09 2 0,18 3 0,27 4 1 on the company due to higher prices of its products Rising popularity of Google Android and Windows2 0,06 0 0,00 2 0,12 0 2 ecosystems in the mobile and tablet space3 Intense competition from Dell, HP, Sony and Toshiba 0,03 3 0,09 2 0,06 4 34 Dependence on specific suppliers 0,02 0 0,00 1 0,02 3 4 Companies not seeing Apple as compatible with their5 0,04 3 0,12 2 0,08 0 5 software Downloading free music from other online source without6 0,02 0 0,00 0 0,00 0 6 paying cost is common it may impact the iTunes sales Microsoft launched Microsoft Windows 7 and 8 which are7 0,05 0 0,00 2 0,10 0 7 gaining market share8 The growing tablet market is competing with ipad 0,02 0 0,00 0 0,00 0 89 Apple is involved in several legal actions 0,06 0 0,00 0 0,00 0 910 High product substitution 0,03 1 0,03 0 0,00 3 10
  20. 20. Acquire Red Create a new Develop new Hat Linux QSPM: Quantitative Strategic Planning Matrix game console product lines in or/and Maxtor China and It determines the relative attractiveness of various strategic alternatives (strong R&D or Western India department) Digital Strengths Weight AS TAS AS TAS AS TAS iTunes Music Store is an excellent source of revenue, especially1 0,03 0 0,00 0 0,00 0 1 with the iPod and the accessibility on Windows platform. Apple Computers have good brand loyalty and image by setting2 0,09 2 0,18 0 0,00 0 2 high standards for quality and use. Partnership with Intel Computers in 2006 – Present (Intels3 0,04 1 0,04 3 0,12 2 3 microprocessors) Strong Research & Development Department driving4 innovation, creating its own software (free of viruses) and 0,10 4 0,40 2 0,20 1 4 hardware5 Creators of high tech technology such as iphone or imac 0.07 2 0,14 0 0,00 0 5 Holds 5% market share and is 4th largest player in mobile phone6 0.08 0 0,00 0 0,00 2 6 market.7 18.5% market share of global smartphone market 0.09 0 0,00 0 0,00 2 7 Robust financial performance. (strengthens investors‘8 confidence and provides capital for future growth avenues) 0.08 3 0,24 2 0,16 4 8 Low debt—more maneuverable. Entering into new product lines ex: Laptops to iPhones and9 0,03 4 0,12 0 0,00 2 9 iPads Excellent distribution network globally to make its products10 0.04 3 0,12 0 0,00 4 10 accessible online and stores11 The iOS has given it a lead as compare to its competitors 0.02 0 0,00 0 0,00 0 11
  21. 21. Acquire Red Create a new Develop new Hat Linux QSPM: Quantitative Strategic Planning Matrix game console product lines in or/and Maxtor China and It determines the relative attractiveness of various strategic alternatives (strong R&D or Western India department) Digital Weaknesses Weight AS TAS AS TAS AS TAS Weak relationship with Microsoft. (low product1 0,05 0 0,00 0 0,00 0 0,00 compatibility) Apples market share is far behind from major competitor2 0,07 0 0,00 3 0,21 2 0,14 Microsoft. Its high priced products and accessories make them3 0,04 3 0,12 2 0,08 4 0,16 inaccessible to many of customers It has less presence in B2B market, as compare to its4 competitors like Dell and HP. It can be seen that Apple 0,03 0 0,00 0 0,00 0 0,00 mainly focuses on B2C so its losing large chunk of market Comes without expandable memory and the battery is fixed5 0,01 0 0,00 0 0,00 0 0,00 (in mobile products)6 Former CEO Steve Jobs died 0,04 3 0,12 1 0,04 0 0,00 Coming off of the failure of two items apple tv and mac7 0,02 3 0,06 0 0,00 0 0,00 mini8 Patent infringement. 0,02 1 0,02 0 0,00 0 0,00 Not shareholder friendly (did not declare or pay cash9 0,04 0 0,00 0 0,00 1 0,04 dividends in either 2011 or 2010)10 Product recalls. 0,01 2 0,02 0 0,00 0 0,00 TOTAL 2,36 2,10 3,02
  22. 22. Develop new product lines in China and India This strategy aims to handle the high cost structure of products, as wellas to expand the product lines, which is a major opportunity. By establishingnew product lines in China and India, Apple will implement its hightechnological competencies, which combined with the low labor cost ofChina and India, will manage to reduce the overpricing of its products andwill gain a competitive advantage among other companies. Apple has to focus on the global market, and both China and India aretwo of the most populated countries in the world and they are experiencinglately, increased use of computers and computer technology products. Theeconomies of the said countries are rapidly improving with more disposableincome than ever before. Currently, all of Asia, accounts for about 5% of Apple‘s total revenue;however, with more advertising and focus on China and India, can be fullyexploited because the market has no prejudices yet. If tapped properly, thesetwo countries can provide significant revenues for Apple in the future. Thisis the alternative strategy that should be followed by Apple among the othertwo, due to the highest total attractive score it took, at the QSPM process.
  23. 23. Epilogue Apple, is arguably the most successful company ever in many respects.But there are major financial risks with being the premier ―first mover‖ in anyindustry. Rival firms across the globe are getting better and better at quicklyduplicating successful Apple products and offering them at lower prices. Success of Apples iPad, iPhone and Mac‘s new versions, helped Apple toreplace Microsoft as the world‘s most valuable technology company in 2010. Apple thinks that there is yet room for improvement, to substitute thealready created wonders. Innovation never stops.
  24. 24. The Technology of the FutureComing Straight from the Past

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