Apple in 2008Prepared For:Mohammad Hannan MiahPrepared By:Khandker Sabbir Hasan 073656030Syed Mashhud Quader 1010792030Syed Shafquat Huq 0910337030Syeda Tubla Tasneem 083194530Tahia Asad 0930544530
Outline• Apple’s history• Porter’s five forces• SWOT analysis• Three I analysis• Corporate Level Strategy• Business Level Strategy• Company’s Structure and Control Systems• Recommendations
History at a glance Apple’s journey1976 Apple started its journey by introducing Apple 11977 Apple 2 was introduced1978 Innovation of apple 21980 -Sold more than 100,000 Apple 2 -Introduction of Apple 3 which was a failure1981 Reintroduction of Apple 31984 Apple started making losses: share market fluctuated1990 Introduction of Mac classic1991 Apple’s first portable notebook1994 Apple lost $68 million1996 The market share slumped to 3% from 9% and made huge losses $ 742 million at first and then another $400 million loss 1997
Continued… Apple’s journey1998 Introduction of iMac which was a success1999 Introduced iBook portable with iMac at $1,5992001 Introduced Titanium PowerBook G4 notebook2004 iMac G5 computer2005 Almost back on track2006 Company made strong share gains2007 Introduction of iPhone2008 -Introduction of the second version of iphone: iphone 3Gs -Introduction of Ultra thin MacBook Air2009 Sold over 25 million iPhones and Apple became one of the top three makers of smartphones
LPorter’s O W Five Threat of new Forces entrants H L Bargaining Current Bargaining I O power of competition: power of suppliers customers G W VERY INTENSE H Threat of substitutes H I G H
SWOT Analysis Strengths:• Pioneer of innovative and high-tech quality products like iPod, iPhone, iPad and Mac• Globally recognized brand name• Large segment of loyal customers of :Apple culture• Strong Research and Development Department• Retail stores providing the eye-catching products and experience of Apple’s software• Strong presence in education segment• Visionary and charismatic CEO, Steve Jobs
Opportunities• Good relationship through joint venture with other big companies coupled to bring out new “hits”• Constant growth of PC and mobile industry• More international expansion like Asian countries• Growing market of “Green” and energy efficient products• turn IPod into a fashion accessory, made a deal with music labels to sell their music, expanded by selling accessories.
Weakness• Lower market share and higher price compared to Microsoft and other competitors• Steve Job dependency• Apple 3 was filled with bugs and crashed constantly• In the late 1995, the company was unable to predict demand for its product, were left with excess inventory,.
Threats• IBM and Microsoft were its domestic competitors, now Dell HP, Lenovo are too along with other mobile giants• Expensive product compared to others• Microsoft threatened Apple that it would stop developing crucial applications for Mac unless Apple grant Microsoft the license for MAC OS
Three ‘I’ AnalysisImmediate competitors:• SAMSUNG, GOOGLE, DELL, HP, HTC, SONYImpending competitors:• NOKIA, MOTOROLA, MICROSOFTInvisible competitors:• LG
CORPORATE LEVEL STRATEGYMISSION VISION• Apple is in the business • To be a leading of innovator of new innovating, manufactur technologies that ing, and change the way people marketing/selling go about their daily computer hardware and software solutions, related peripherals, and communications equipment.
STRATEGIES• Removal of Steve Jobs and shutting down Lisa Line.• Sculley took some noteworthy steps:• Made himself Chief Technological Officer as well.• Planned to introduce lower priced Mac.• Introduced lower priced Macintosh.• Cut Apple’s workforce by 10% and reduced salary of top management by 15%.• Put forward a target of introducing new products every 6-12 months.
• After Sculley failed to succeed further, Spindler came into the picture.• Gave license to a handful of companies to make Apple clones.• Spindler also cut off 1300 jobs as in the basis of cost cutting when things were looking much more bleak.• Soon enough era of Spindler ended and Amelio took Apple into hands.
Steve Jobs• He bought Jobs’ new company NeXT.• Hired Jobs as a consultant.• When Amelio was failing to show promising figures finally Steve Jobs took over the management role and was appointed CEO.• Jobs stroke a deal with Microsoft of about $150 million.• He ended the clones licensing aspect which put a cost around $100 million.• Jobs removed all slow selling assets.• He pushed Apple into online distribution.
• Introduced the era of iPod and iPhone.• Took it one step further by introducing iTunes.• Took part to stop piracy of songs via iTunes which gained popularity and success.
Business Level strategy• Focused Differentiator.• Licensing with Microsoft.• Commitment to innovation.• Agreement with mobile operators.• Imitation of Dell Computers direct- selling model.• Value Innovation
CONTROL SYSTEM FLAWS• Organizational change• Leadership change• Lack in corporate link up• Reward system• Ineffective product bundling
CONTROL SYSTEM ACTION PLANS• Steve jobs re entry• R&d• Horizontal and vertical integration• Influence of Steve jobs• Licensing and patenting• Offered advanced product in short span of times• Outlet and sales force
Recommendation• Should have stabilized the corporate level• Should lower their market price• Should have had more people running the show rather than Steve Jobs• More globalization• Should go for energy efficient products