Apple inc.

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Apple inc.

  1. 1. Apple Inc. Page | 1M.AbdulRasheedSr. II-SBusiness 7100
  2. 2. Content Sr.# Topic Pg.# Page | 2 1 Executive Summary 3 1.1 Business And Its Goal 1.2 Unique Features 1.3 Why I Chose This Corporation 1.4 Issues Of Corporation 2 SWOT Analysis 4 2.1 Strengths 2.2 Weaknesses 2.3 Opportunities 2.4 Threats 3 PEST Analysis 5 3.1 Political Influences 3.2 Economical Influences 3.3 Social Influences 3.4 Technological influences 4 Value Chain Analysis 6 4.1 Technology And Product Design 4.2 Production 4.3 Sales And Marketing 4.4 Customer Services 4.5 Legal Services 5 Porters Five Force Model 7 5.1 Threat of New Entrants-Low 7 5.2 Threat of Suppliers of 1st Category-Low 8 5.3 Threat of Suppliers of 2st Category-High 9 5.4 Bargaining Power of Buyers-Moderate 10 5.5 Competitive Rivalry-High 11 5.6 Threat of Substitutes- Low 12 5.7 Final Result 12 6 Marketing Mix 13 7 Five Main Competitors 15 7.1 How Do They Run? 15 7.2 How Does Their Product Or Service Differ? 16 7.3 How Each Competitor Advertises? 16 8 Financial Statements 17 8.1 Income Statement 17 8.2 Balance Sheet 18 8.3 Cash Flow 20M.AbdulRasheedSr. II-SBusiness 7100
  3. 3. 1. Executive Summary Page | 31.1 Quick clear description of the business and its goalsApple Inc. is a technology company, which designs, produces and sells goods of the Computer, Music and Mobile-phone Industries. It isdifferentiated by its brand-perception and identification. Over the last couple of years, Apple has become a cult-brand, thanking it‟s iLife,iTunes, QuickTime and iMac lines. Apple Inc.‟s short-term goals is currently increasing the sales of the just launched iPad (the mostinnovative web=browser in market). In the long-run, Apple aims for the top of the market, becoming the number one leader.1.2 Identification of unique features of the business that appeal to customers and why they are appealing.Apple Inc. has incorporated numerous features that are unique and well known in the market today. We consider that there are severalApple products with several appealing features such as: iMac, iPod, iPhone and iPad. These products represent a revolutionary era forthe development of Apple. By placing such products in the market, Apple Inc. has attracted a lot of customers in one way or another.Highly advanced technology, simplicity and design, and the sense of luxury are the main features integrated in these products.Moreover the comfort and convenience that these products provide are very crucial.1.3 A short explanation of why I chose this corporation“Think Different”One of the main reasons which inspired me to choose Apple Inc. is its unique, simple and luxurious image that Apple has created in themarket over the years. “Think differently” which is an inspiring motto, made us believe that simplicity and creativity combined withluxury can lead to a successful and profitable company, such as Apple. Another component that we found to be challenging for us was tounderstand Apple‟s goals, objectives and their secret of being successful. A very important fact about Apple products today is that theseproducts are globally spread. This has created among us the idea that Apple products are no longer luxuries but real necessities due to thetechnological developments. Moreover, what has motivated us most to select Apple Inc., is the way we relate ourselves with its products.Each of us being an Apple consumer has build trustworthiness relationship with the products that this company offers. Owning an iPod oriPhone today definitely will make your life easy and simple.1.4 Single most important issue facing the corporation todayAs mentioned above, 2010 came with the launching of the iPad, which is a totally differentiated product in the market. It is a web-browser, which also can be used as laptop, and can be useful in every aspect of educational and professional areas. Its price, compared toregular Apple prices, is pretty affordable ($499), which is an incentive for more buyers to purchase. This is the main goal of Apple in thecurrent day. M.AbdulRasheed Sr. II-S Business 7100
  4. 4. 2. SWOT AnalysisSWOT stands for Strengths, Weaknesses, Opportunities and Threats, and is very important of finding out where a business currently isand where it could be tomorrow. In order to find out Apple‟s position and define the strategy to be used, internal factors (strengths andweaknesses) and external factors (opportunities and threats) are analyzed. Page | 42.1 Strengths: iTunes are a marvelous revenue source, since it also sells its own tool, the iPod; and is accessible on Windows as well. For each hardware, Apple Inc. produces its own software as well, and is master of expertise for both. Apple‟s price area level provides it with enough room to avoid price competition. Apple‟s so much appealing design, is also easy to use. Low debt- gives more space to control finance The good brand loyalty of Apple Computers Mergers with Intel Computers since 2006 High developed Research & Development department Steeply growing market The services/products offered by Apple are original, meaning many people will return to Apple to obtain them.2.2 Weaknesses:Weaknesses of a company or business are the negative elements that could be improved because they are under the control of thatbusiness. Weaknesses also express the disadvantages to competition that might not let the business meet the objectives. Weak relationship with market titan Microsoft Technological products as Apple‟s have extremely short lifecycles, this implies that the development and production of new products and services has to be constant Low presence in advertising other than products placement in publishing and educational areas Very little market share compared to main competitor Microsoft2.3 Opportunities:Opportunities are external factors that influence the company‟s current and future position; they are presented as offers, trends, needs thatpromise beneficial outcomes for the company. The production of computer anti-viruses, which are increasing on PC‟s Large and increasing population resulting in more potential customers of tomorrow Increasing bonds and partnerships with other companies Increasing online sales Most demanded and sold Apple products are laptops, therefore producing more types to meet as many needs as possible2.4 Threats:Threats are negative external factors the company has no control over. In cases of threats most and best a company can do is identify themand prepare scenarios of how threats can be turned beneficial or at least do no harm to the company. In the Laptop market Apple has very strong competition from Dell, HP, Sony and Toshiba Media piracy: iPod users illegally downloading music for free instead buying at iTunes Its product expensiveness threatens Apple being undercut by low-cost imports. The long lasting economic recession, which might influence Apple‟s sales in the near future Window‟s 7 (software), which after the flop of vista is gaining more and more market share The very high speed of technology development M.AbdulRasheed Sr. II-S Business 7100
  5. 5. 3. PEST AnalysisThe PEST analysis helps determine the current situation of Apple Inc., identifying potential influences of the political, economic, socialand technological sectors; and have a glimpse into the future of Apple Inc.3.1 Political Influences: Page | 5It is reported that in 2007 52% of sales of Apple were from outside America. Bad international relations, wars and terrorism mightinfluence Apple in a huge manner; moreover these are all factors Apple has no ability to control.Apple Inc. produces many of its parts and products outside the U.S., like Ireland, Czech Republic, Korea, China, and Cork. PoliticalConflicts between the U.S. and any of these states may have awful outcomes for Apple Inc.3.2 Economic Influences:The global economic depression might have immense impact on Apple Inc. The inflation rate is high, while consumer‟s incomes didn‟thave significant changes, moreover the unemployment rate has increased, leading consumers to spend less, especially on „luxuryproducts‟, as Apple products might be viewed.Even though the U.S. dollar has lost value, Apple Inc. is not as endangered economically. The corporation has purchased itself foreigncurrency, to minimize the economic effects of inflation on Apple Inc. It needs to be said that the U.S. dollar‟s depreciation has in factincreased Apple‟s revenue in the international market.3.3 Social Influences:Globalization includes the interaction of people worldwide, for which technology plays the main role. Today‟s World cannot be imaginedwithout technological devices as Computers, mobile phones etc. Apple is the globally seen as the King of technology, not because ofmost usage, but quality and design.Another big social influence is the music industry, which over the last decade has become virtual and set its market to the cyberspace.Apple having developed the biggest virtual media store, iTunes, is well ahead any other competition of this direction. Web piracy mightbe a threat, but most governments punish those behaviors.All in all, Apple‟s image also portrays the modern individual‟s lifestyle, combining functionality with design, leading to brandidentification and loyalty. Therefore social influences have positive effects on Apple Inc.3.4 Technological Influences:The technology market for computers and mobile phones has become huge, adding more competition in the market. Also technologyinnovations and changes are almost as fast as light, therefore the products lifecycle is very short.Investing largely in Research and Product Development, Apple is on top of the market, regarding innovative products. This includesmaking the work for the competition to follow, but it‟s still better because innovation is a big part of the brand and has shown to pay out. M.AbdulRasheed Sr. II-S Business 7100
  6. 6. 4. Value Chain AnalysisTo determine where Apple developed distinctive capabilities, Porter‟s generic value chainmodel provides a systematic framework foridentifying Apple‟s utilization of resources. Primaryactivities for Apple include Technology and Product Design, Production, Sales andMarketing,Customer Service, and Legal Services.4.1 Technology and Product Design Page | 6This component represents the true core (no pun intended) of Apple‟s capability. From being the first platform to run an electronicspreadsheet (VisiCalc on the Apple II Plus) to thefirst to establish a “digital lifestyle” hub (the Macintosh product lines), Apple‟s historyis richwith cutting-edge technology development. (Linz Mayer) Apple drives to be the best, no simplythe first. The Apple operatingsystem is universally regarded as more stable and reliable thanWindows, while the desktop publishing software bundles (iMovie, iPhoto,iTunes, etc.) are the most comprehensive available to end users. Ives best summarizes the entrepreneurial culturewithin Apple by sayingthat “it‟s very easy to be different, but very difficult to be better.”(Linz Mayer, 301)4.2 ProductionBecause Apple had long refused to license its operating system to external entities, the bundled packages of Apple-developed hardwareand software became the cornerstone of Apple‟s production process. Apple achieved unparalleled performance via 64-bit architecture,integrated distinctive styling with the multi-colored translucent iMac cases, and redefined intuitiveoperation with the iPod. While everyproduct introduction has not been a success (Lisa, Newton,etc.), Apple treats component production as a natural extension of the designprocess.4.3 Sales and MarketingWe could simply title this section “Steve Jobs”. Since his return as CEO in 1997, Jobs personally unveils all new product introductions,reviews corresponding marketing campaigns,and approves new product development guidelines. In a departure from their turbulenthistory,Jobs “entered into patent cross-licensing and technology agreements with Microsoft.”(Linz Mayer, 290) After years ofunimpressive market share growth and cannibalization of aloyal consumer base, the door to the expansive PC market was now moreaccessible to Applethan ever before. Apple continued to command a market premium for producing a “better mousetrap” throughout itshistory.4.4 Customer ServiceHow has Apple retained substantial cash reserves during the explosive growth anddominance of PCs worldwide? Apple created a virtuallove affair with their customer base bydelivering technically superior products (iPods vs. other MP3 players, Macs vs. PCs, etc.), andaggressively pursuing hardware and software updates. Apple integrated their primary activities so well that it is transparent to theconsumer where one activity begins and the other ends. A perfect example of this is Apple‟s willingness to develop software to runWindows XP on its new Intel-based iMac and then post it online free to iMac users. (Wing field) In such an environment, customerservice merely becomes the realization of receiving a little more than expected. Although Apple employs many resources and capabilitiesto support their primary activities (human resources, supply procurement, etc.), the most strategically relevant would be Legal Services.4.5 Legal ServicesIn a market climate of constant change and innovation, it is inevitable that the drive toexpand product and service offerings will subjectApple to patent and copyright infringementclaims. The dispute over the Apple logo on its iTunes Music Store, for example,continuesdespite a previously reached settlement with Beatles‟ Apple Corps Ltd. in 1991. (Dow Jones Newswires) While such litigationas Microsoft‟s Windows infringement on Mac OS patents has been highly publicized, use of legal guidance to drive acquisition versusinternal development strategies for such products as Garage Band and iMusic have proven highly valuable.(Linz Mayer, 172-4, 250)Intellectual property is sacred to Apple. There was a recent attempt to uncover the identities of internal “sources who leaked confidentialinformation about an unreleased product to online media outlets in 2004.” (Wong) M.AbdulRasheed Sr. II-S Business 7100
  7. 7. 5. Porter’s Five Force ModelOne of the initial models used to scrutinize industry economics and industry attractiveness is Michael Porter‟s Five Force Model (Porter,1980). Porter suggests five forces that settle on industry profitability:5.1 Threat of New Entrants-Low Page | 7Economies of scale and experienceAlready existing plays like HP with the market share of 20.3% leads the market.Product differencesApple leads in the market with the different products like Pc, iPhone, iPad and iPod which are full of the features.Brand identityAs the Apple‟s customer are loyal and they are ready to pay even the premium price to the company.Switching costThe existing companies are totally relying on the suppliers hence the cost is definitely high for swathing.Capital requirementThe APPLE spends the 3% for the sales on the R&D to compete in the market.Access to distributionThe leaders of the market already capture the major distributors like AT&T and Verizon in U.S which gain the 60% of the market.Cost advantageAs the major players like the HP, had the cost advantage and had the larger market share of 20.3%.Government policesThe data regarding the government regulations is not available in the case.ResultThis analysis shows that the threat of the new entrants is low. M.AbdulRasheed Sr. II-S Business 7100
  8. 8. 5.2 Threat of Suppliers of 1st Category-LowConcentrationAs mentioned in the case that the supplier of the products like, memory, chips, disks and drivers. They are fragmented. Page | 8Presence of Substitute InputsThe products that are provided by the companies are standardized and had no substitute.Impact on Quality/ PerformanceThe companies are going to use the standardize products to reduce the cost hence the suppliers product is essential for the industry.Product DifferentiationThese products are not the commodity it is standardized products.Switching CostAs they are many suppliers in number hence the switching cost is low.There is no threat because there is huge requirement of capital and R&D to compete in the industry.ResultThis analysis shows that the bargaining power of the Suppliers is low for the 1st Category suppliers who provide the products (memory,disk drivers, chips and keyboards). M.AbdulRasheed Sr. II-S Business 7100
  9. 9. 5.3 Threat of Suppliers of 2nd Category-HighConcentration Page | 9As clearly mentioned in the case that the suppliers of the products like microprocessors and the operating systems are few like Intel andMicrosoft.Presence of Substitute InputsThe products that are provided by the companies are standardized and had no substitute.Importance Relative To CustomerThe industry is the growing industry and for the suppliers it is very profitable.Impact on Quality/ PerformanceThe companies are going to use the standardize products to reduce the cost hence the suppliers product is essential for the industry.Product DifferentiationThese products are not the commodity it is standardized products.Switching CostAs they are few in number hence the switching cost is high.Forward IntegrationThere is no threat because there is huge requirement of capital and R&D to compete in the industry.ResultThis analysis shows that the bargaining power of the Suppliers is high for the 2st Category suppliers who provide the products such as;(Microprocessors and the operating systems by Intel and the Microsoft). M.AbdulRasheed Sr. II-S Business 7100
  10. 10. 5.4 Bargaining Power of Buyers-ModerateConcentrationThe buyers are few and the customers are now moving towards the big stores like superstores, electronic retailers and web based retailers.Product Cost Versus Purchases Page | 10The buyers are seemed more concern about the product features and availability.Product DifferentiationThe products like PC‟s and the mobiles phones are a commodity and the brand is definitely critical for the success.Switching CostAs there are many suppliers of the products like the Apple, HP, Dell etc. in the market and they all struggle for the distribution hence theswitching cost is low.ProfitsThe profit margin of the buyers is not discussed clearly in the case.Backward IntegrationThe buyers are not in the position to make the products itself because the huge technological facilities are required.Impact on Quality/ PerformanceThe products offered by the companies are standardized and people become more features lover hence the buyers need to sell qualityproducts.ResultThis analysis shows that the bargaining power of the buyers is high. M.AbdulRasheed Sr. II-S Business 7100
  11. 11. 5.5Competitive Rivalry-HighIndustry growthThe industry is fastest growing industry as the product lifecycle is very short only of 6 to 9 months.Fixed costs Page | 11The business has a high fixed cost as in the case the all the players fight for the market share by cutting their cost.Switching costThere are many suppliers in the market like Nokia, HP etc. hence the switching cost is low.Product differentiationThe products are highly differentiated, because all are branded.Brand identityThe brand is definitely is critical for the success that‟s why the Apple has a larger profit margins as 40%.Diversity of competitorsThe competitors in the industry are using the different strategies but all are diverse like Apple in Smartphone‟s and in PC and in Laptopsall at the same time.Co-operate stakesThe firms like the Apple is in the market with the different strategies and the other rivals are the important stakes for the industry as well.Exit barriersThe exits barriers are high because the products offered by the players in the industry are standardized products.ResultThis analysis shows that the competitive rivalry shows clearly that the threat of the rivalry is High. M.AbdulRasheed Sr. II-S Business 7100
  12. 12. 5.7 Threat of Substitutes- LowPrice performanceAs there are many substitute of the technologies given by the companies are Sony provides the Playstation3, and Smart phones with the | 12 Pagefacility of the doing e-mail, check website etc.Switching costSometimes it is costly but some time is easy it may depends on the how much the product is standardized with the demanded features.ResultThe analysis of the substitutes in the industry shows that the threat of the substitutes is Low5.8 Final Result:The final result of the Porter analysis is made after the compilation of the individual analysis of its forces and the combine results are; Threat of New Entrants-Low Threat of Suppliers of 1st Category-Low Threat of Suppliers of 2st Category-High Bargaining Power of Buyers-High Competitive Rivalry-High Threat of Substitutes- LowThe above analysis shows that the three powers in the industry are Low (New Entrants, Suppliers of 1st Category, Substitutes) two powersare High (Suppliers of 2nd Category, Buyers and Rivalry), if we combine the power of suppliers of both categories and consider itmoderate, it means there is the potential in the industry to grow. M.AbdulRasheed Sr. II-S Business 7100
  13. 13. 6. Marketing Mix for Apple Marketing Aspect Apple Inc. A mobile telephone with built in camera; able to store music, pictures and videos; can download Page | 13 applications and use the internet. A music storage device which can be used on the move. Some models ableBasic Customer Need to hold pictures and videos; some models able to browse the internet and play games. Apple TV is a device allowing the user to play high definition videos from iTunes/YouTube/their computer/etc. on their television, in widescreen. A computer, either laptop or desktop. Apple‟s target market consists of people with these characteristics: The Age groups of: 12-35 for Music Fans; 18-60 for all products; Both Genders; Middle and upper economic class; that doesn‟t hesitate paying more for a product that offers higher Target Market quality and better experience; The educational level is mostly secondary or higher. Depending on the product, it could be a 5th grader as well as a professional filmmaker; Mostly residents of U.S. and Europe, but generally globally resided. Within the countries, the target market mainly resides the cities; From the lifestyle point of view it is people that get pleasure from technology and music but also businesspeople and graphic and moving media professionals. Apple operates mainly in the technology industry, which is segmented in smaller sectors, like the Computer Industry, Mobile-Device Industry etc. Apple is active in a number of segments, depending on the product- nature. The computer industry: with the iMac and MacBook desktop and laptop computers and partially withMarket Segmentation the Apple TV The smart-phone industry: with the iPhone The online-music industry: with iTunes The music-device industry: with the iPod The technological tools industry: with devices used for the main products mentioned above. A convergence of technologies e.g. An iPhone has a mobile phone, an mp3 player and internet surfing capabilities. iPhone3G/iPhone 3GS iPod shuffle (available in a range of colours) iPod Nano (available in a range of colours) iPod classic iPod touch Apple TV Products MacBook Pro/Air/mini iMac Products have different flavours in respect to colour and hardware specification. Specification is directly linked with price. M.AbdulRasheed Sr. II-S Business 7100
  14. 14. Premium price strategy:Premium pricing is the practice of keeping the price of a product or service artificially high in order to encourage favorable perceptions among buyers, based solely on the price. The practice is intended to exploit the (not necessarily justifiable) tendency for buyers to assume that expensive items enjoy an exceptional reputation, are more reliable or desirable, or represent exceptional quality and distinction. Page | 14 Pricing rarely fluctuates, products benefit from low depreciation value Price * iPhones, from £349 iPods (shuffle, Nano, classic, touch), starting prices £46, £118, £193, £152, respectively Apple TV, £223 MacBooks (classic, Pro, Air), Mac mini, iMac, Mac Pro, starting prices from £816, £918, £1174, £510, £969, £1940, respectively. 1. Through Apple shops, supermarkets, and electronics shops. 2. Internet sales 3. TV adverts 4. Billboard advertisingPrinciple Promotional Tools 5. Internet adverts 6. Print adverts in magazines Always a distinct and consistent style. Well known logo. Celebrities have in some of the advertising. Products are available from various sources through the channel there are various distributors, and many Place (Distribution) retailers and e-tailers. Alternatively the products can be purchased from apple directly.*prices from Apple Online Store, http://store.apple.com/uk M.AbdulRasheed Sr. II-S Business 7100
  15. 15. 7. Five Main CompetitorsThe Computer market in the technology industry is an Oligopoly market, ruled by five great corporations, Apple Inc. being one of them.Therefore for the sake of evaluating comparable factors, we will only take the market leaders into consideration; those who can influencethe market.The most influential competitors of Apple Inc. are: Page | 15Dell Inc.HEWLETT PACKARD COMicrosoft CorpIBM7.1 How do they run?As Apple Inc. is increasing also, those other businesses are increasing and trying to do something interesting for their own good.What are their strengths and weaknesses?The strength part of Dell Inc. is that they offer to their customer‟s direct relationships and that‟s why they even were awarded forcustomer services.Also, Dell Inc. needs to make a drastic change. They don‟t need to wait for people buy their products only when they are on sale but theyneed to focus more on the customer support and improve the areas they already have problems.HEWLETT PACKARD CO as being a large company and doing business in 170 countries gave them opportunity to dominate in themarket by selling printers to their customers and also many other companies.Hewlett Packard Co as all companies has its own strength and weaknesses. What I found interesting about the company was notmarketing their products and businesses so in my opinion they need to focus more in their marketing and do something that will catchpeople attention.Microsoft Corp. abbreviates multinational differences in more than 60 countries and that make people feel more related to them andcomfortable with their services. What makes Microsoft Corp. weaker is Bill Gates his own because as being the head of Microsoft hedidn‟t develop still a band of products for his own company.IBM as a big company has experience and knowledge in planning A&M and also they benefit from their global relationships with clientsto the technology layers.In other way they need to work harder in their pre-deal abilities because their competitors are much better than them in this part. M.AbdulRasheed Sr. II-S Business 7100
  16. 16. 7.2 How does their product or service differ?Comparing Dell with Mac is not easy because they differ from each other in many ways. Macs are better than Dell‟scomputers in quality, design, production of videos and web page designing. They also differ on software, usingdifferent operating systems and that is the main reason why it is difficult to compare them with each other.Mac and HP PC also have their differences. Mac has a cooler technology in designing and arts fields and the Page | 16operating system called Leopard that HP pc doesn‟t have. Another crucial difference between those two is the price.Apple Inc. and Microsoft Corp. in the computers industry are the biggest competitors. As Apple introduced Mac OSX operating system Microsoft introduced Windows Vista. Operating systems of both companies are very differentbut still both of them have their advantages and disadvantages comparing to each other. One of the advantages ofMicrosoft over Mac OS X is the user number. Microsoft is the most used and taught operating system world-wide-which doesn‟t make it the best though.In the beginning IBM and Apple computers seemed to be similar just before Apple changed visual operating system.People were very enthusiastic about the changes and which increases Apple sales. As in the other cases the maindifference between Mac‟s and other competitor‟s computers were the operating system they use.7.3 How each competitor advertises?While researching for Dell ways of advertisement we have learned that from an audit that was done in Dell Inc. theymoved from mass media to direct marketing. So they preferred to talk with their customers directly, ask and answertheir questions and also learn more about their needs. This kind of strategy turned to be very successful for Dell Inc.This way of advertisement tend to be more memorable because as you have the chance to make questions foreverything you are interested and get immediate answers than you understand that you are important for thecompany.Other than Apple, Dell competes on price. An advantage on price competition of Dell over other companies is the fact thatthey do not have stores. Dell sells over internet and phone; therefore has no cost for rent or salespeople at stores. Theyproduce stereotype computer models, but also give the opportunity for the consumer to choose the installations and parts oftheir Dell purchase on their own.It seems that Microsoft Corp. is one of the companies that have those creative ideas in advertising. Those days theyput a kiosk in front of Apple store and try to push customer‟s record their voice and say “I‟m a PC”. This seems anattractive idea of Microsoft and makes people believe that company concerns about their needs. Also this can bememorable for them because they will always remember and tell their friends that ones they recorded something forMicrosoft and that is a great advertisement. Microsoft advertises their company with direct marketing because itseems to be more effective. The last but not least important thing to mention is the way company reduces prices.They first reduce operational costs which make them save time and money for the company and make possible tooffer a competitive prices. This factor makes relationship between company and customers stronger.During the 90‟s it was interesting to analyze IBM‟s advertising methods. Though they were targeting largebusinesses, they had ordinary TV commercials just like dishwasher-tablets. They tried to make the business ownersaware of the brand, while those were sitting home, after long days at work and watching the news at prime-time.Things have changed. It seems that IBM during 2009 moved away from traditional advertisements. According totheir scenario planning they made customer the center of them or centricity. So as they moved to centric marketingthey started to experiment with new models.HEWLETT PACKARD CO is doing mass advertising, mostly through TV advertisements and web-advertisements; but alsoby sponsoring games and TV advertised parties and lotteries. HP is trying to connect to the consumer, and is targeting theyoung age-groups from 18-35 years. They also have very low minimum prices of computers starting by 350$.M.AbdulRasheedSr. II-SBusiness 7100
  17. 17. 8. Financial Statements8.1 Apple Income Statement Income 2012 2011 2010 2009 2008 Page | 17 Revenue 156.51B 108.25B 65.22B 42.90B 37.49B Cost of Revenue 87.85B 64.43B 39.54B 25.68B 24.29B Gross Profit 68.66B 43.82B 25.68B 17.22B 13.20B Research & Development Expense 3.381B 2.429B 1.782B 1.333B 1.109B Selling, General, & Admin. Expense 10.04B 7.599B 5.517B 4.149B 3.761B Depreciation & Amortization Operating Interest Expense Other Operating Income (Expense) Total Operating Expenses 101.27B 74.46B 46.84B 31.16B 29.16B Operating Income 55.24B 33.79B 18.38B 11.74B 8.327B Non-Operating Income 522.00M 415.00M 155.00M 326.00M 620.00M Pretax Income 55.76B 34.20B 18.54B 12.07B 8.947B Provision for Income Taxes 14.03B 8.283B 4.527B 3.831B 2.828B Income after Tax 41.73B 25.92B 14.01B 8.235B 6.119B Minority Interest Equity In Affiliates Income Before Extra ordinaries& Disc. Operations 41.73B 25.92B 14.01B 8.235B 6.119B Investment Gains/LossesM.AbdulRasheedSr. II-SBusiness 7100
  18. 18. 8.2Apple Balance SheetAssets 2012 2011 2010 2009 2008Cash & Short Term Investments 29.13B 25.95B 25.62B 23.46B 22.11B Page | 18Receivables 18.69B 11.72B 9.924B 5.057B 2.422BInventory 791.00M 776.00M 1.051B 455.00M 509.00MPrepaid ExpensesOther Current Assets 6.458B 4.529B 3.447B 1.444B 3.92BTotal Current Assets 57.65B 44.99B 41.68B 31.56B 30.01BGross Property, Plant & Equipment 21.89B 11.77B 7.234B 4.667B 3.747BAccumulated Depreciation 6.435B 3.991B 2.466B 1.713B 1.292BNet Property, Plant & Equipment 15.45B 7.777B 4.768B 2.954B 2.455BLong Term Investments 92.12B 55.62B 25.39B 10.53B 2.379BGoodwill & Intangibles 5.359B 4.432B 1.083B 453.00M 492.00MOther Long Term Assets 5.478B 3.556B 2.263B 2.011B 839.00MTotal Long Term Assets 118.41B 71.38B 33.50B 15.95B 6.165BTotal Assets 176.06B 116.37B 75.18B 47.50B 36.17BLiabilities 2012 2011 2010 2009 2008Current Portion of Long Term DebtAccounts Payable 21.18B 14.63B 12.02B 5.601B 5.52BAccrued Expenses 11.41B 9.247B 5.723B 3.852B 4.224BDeferred Revenues 5.953B 4.091B 2.984B 2.053B 1.617BOther Current LiabilitiesTotal Current Liabilities 38.54B 27.97B 20.72B 11.51B 11.36BTotal Long Term DebtDeferred Income TaxOther Long Term Liabilities 16.66B 10.10B 5.531B 3.502B 1.745BM.AbdulRasheedSr. II-SBusiness 7100
  19. 19. Total Long Term Liabilities 19.31B 11.79B 6.67B 4.355B 2.513BTotal Liabilities 57.85B 39.76B 27.39B 15.86B 13.87BShareholders Equity 2012 2011 2010 2009 2008Common Shares Outstanding 939.21M 929.28M 915.97M 899.81M 888.33M Page | 19Preferred StockCommon Stock, Net 16.42B 13.33B 10.67B 8.21B 7.177BAdditional Paid-in CapitalRetained Earnings 101.29B 62.84B 37.17B 23.35B 15.13BTreasury StockOther Shareholders EquityMinority InterestShareholders Equity 118.21B 76.62B 47.79B 31.64B 22.30BTotal Liabilities & 176.06B 116.37B 75.18B 47.50B 36.17BShareholders EquityM.AbdulRasheedSr. II-SBusiness 7100
  20. 20. 8.3 Apple Cash FlowCash Flow - Operations 2012 2011 2010 2009 2008 Page | 20Net Income 41.73B 25.92B 14.01B 8.235B 6.119BDepreciation, Depletion, Amortization 3.277B 1.814B 1.027B 734.00M 496.00MOther Non-Cash Items 6.145B 4.036B 2.319B 1.75B 936.00MTotal Non-Cash Items 9.422B 5.85B 3.346B 2.484B 1.432BDeferred Income TaxesTotal Changes in Assets/Liabilities -299.00M 5.757B 1.236B -560.00M 2.045BOther Operating ActivitiesNet Cash from Operating Activities 50.86B 37.53B 18.60B 10.16B 9.596BCash Flow - Investing 2012 2011 2010 2009 2008Capital Expenditures -8.295B -4.26B -2.005B -1.144B -1.091BAcquisitions, Divestitures -350.00M -244.00M -638.00M -220.00MInvestments -38.43B -32.46B -11.08B -16.05B -6.76BOther Investing Activities -48.00M -259.00M -20.00M -175.00M -10.00MNet Cash from Investing Activities -48.23B -40.42B -13.85B -17.43B -8.189BCash Flow - Financing 2012 2011 2010 2009 2008Debt IssuedEquity Issued 665.00M 831.00M 912.00M 475.00M 483.00MDividends Paid -2.488BOther Financing Activities 125.00M 613.00M 345.00M 188.00M 633.00MNet Cash from Financing Activities -1.698B 1.444B 1.257B 663.00M 1.116BForeign Exchange EffectsDiscontinued Operations and OtherNet Change in Cash & Cash Equivalents 931.00M -1.446B 5.998B -6.612B 2.523BCash at beginning of period 9.815B 11.26B 5.263B 11.88B 9.352BM.AbdulRasheedSr. II-SBusiness 7100

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