Analysis of the strategy of the Apple Inc..pdf

Strategic Management
Analysis of the strategy of the
Apple, Inc.
Submitted to:
Prof. Dr. Christian Buer
Summer Semester 2012
Author:
Sinan Kücükzeybek 177875
SPO 3 - Number of Exam - 253202
21 June 2012

Strategic Management – Analysis of the Strategy of the Apple, Inc.
15 June 2012
- 2 -
List of contents
List of contents …..…..…………………….………………………………….….………… 2
List of figures …………….…….……………………………….…………........................ 3
1. Executive Summary ……………………………………..….…………….….…………. 4
2. Historical development ………………….……..………………..…..……..………...… 4
3. Environmental analysis …………………………………………………..…………...... 8
3.1 Company description ………………………………………………..…………….. 8
3.2 The SWOT Analysis of Apple …….………………………………..…………….. 10
3.3 The most influential competitors ……………………...…………..……………... 12
3.4 PEST Analysis …...…………………………………………………….…..……… 14
4. Business Analysis of Apple ……………………………………………………..……. 16
4.1 Portfolio overview …..……………………………………..………………………. 16
4.1 Corporate Identity ……………………………………….………………………… 18
4.2 Corporate Social Responsibility …………...………………………………….… 18
5. Conclusion ………………………..…..…………..……………………………………. 19
List of references ………………………..…..………..…..…………………………..….. 20
Appendix ………………….…………………………………………………………… 21-25

15 June 2012
- 3 -
List of figures
Figure 1: Apple’s 183M smartphone sell until Q1/2012 ...……………………………… 7
Figure 2: Apple net sales by product 2011 ……………………………………………… 9
Figure 3: Apple sales by product 2010 ………………………..………………….……… 9
Figure 4: Apple’s sales by product line ………………………………………...………. 10
Figure 5: Key Executives Compensation …………………………..………….….…… 10
Figure 6: Structure of SWOT analysis ………………………………………..………... 12
Figure 7: Operating Systems Market Share ………………………………....………… 13
Figure 8: Operating System Versions Market Share …………………………………. 13
Figure 9: Market Share Movement for OS Versions ………………………….………. 13
Figure 10: US sales of all Apple sales, 2001 to 2010 ………………………………… 14
Figure 11: US recorded music revenue – 2011 in US dollars ………………..……… 16
Figure 12: Profit shares of eight mobile phone vendors …………………..………..... 17
Figure 13: Mobile Phones OS market share part 1 …….....…………………....…….. 18
Figure 14: Eco-Apple Trend – Total footprint 2011 .………………………............…. 19
Figure 15: Organigram of Apple – Board of Directors ..……………………….……… 21
Figure 16: Organigram of Apple – Executive Managers ..…………………....………. 21
Figure 17: Key Executives of operating segments ……………….…...…….......…… 22
Figure 18: Industry movement ………..………………...…...….…..………....……….. 22
Figure 19: The PEST analysis ……………………………………...…………...……… 23
Figure 20: Code of Conduct …………………………………………………………...… 23
Figure 21: some products of Apple, Inc. ……………………….…………………….... 24
Figure 22: Q2 2012 Unaudited Summary Data ……………….…..……..……………. 25

15 June 2012
- 4 -
1. Executive Summary
The Subject of the following elaboration is the analysis of the strategy of the
Apple, Inc., formerly Apple Computer. It begins with the emergence and development of
Apple and his initial public offering (IPO), followed by proceedings of inter-nationalization.
Focused on segments worldwide and United States the macro-environmental analysis
consist a SWOT analysis and a PEST analysis. Afterwards Porter’s Five is presented,
followed by a product portfolio overview and trading result of the financial year 2011. In
addition the Corporate Identity and the Corporate Social Responsibility will exemplify
objectives of Apple’s strategic formulation. Finally the strategic analysis will be completed
with a conclusion.
2. Historical development
“He was the only person I met who knew more about electronics than me.”
Steve Jobs, explaining his initial fascination with Wozniak.
“Steve didn’t know very much about electronics.”
Steve Wozniak
On April 1, 1976, Apple Computer was created by founders Steve Jobs (1955-2011) and
Steve Wozniak. Incorporated on January 3, 1977, in Cupertino, California, it was the
dominantly manufacturer in personal computers for more than two decades.
Pre-foundation 1969-1984
The “two Steves” had withdrawn from Reed College and UC Berkley. In 1975 the only
microcomputer CPUs (centralized processing units) generally available were out of
Wozniak’s price range. So he watched, and learned, and designed computers on paper,
waiting for the day he could afford a CPU. Later Wozniak met his old friend Jobs, who was
interested in the commercial potential of the small hobby machines. Jobs took a purchase
order with COD (cash on delivery) payment terms and ordered the components they needed
to assemble the Apple I, from a national electronic parts distributor. By delivering on time,
Jobs had a tidy profit left over for the next order and had found a way to finance his soon-to-
be multimillion-dollar company without giving away one share of stock or ownership. Further
designing the Apple I machine was fairly simple. Using far fewer parts than anything in its
class, it was a masterpiece of design. Meanwhile Steve Jobs started looking for cash, but
banks were reluctant to lend money; he eventually met Mike Markkula, who co-signed a bank
loan for US$250,000. The three formed Apple Computer on April 1, 1976.

15 June 2012
- 5 -
The Apple II, which included graphics and color, was presented to the public on April 16 and
April 17, 1977. With both cash and a new case design in hand, the Apple II became the
computer generally credited with creating the home computer market. Millions were sold well
into the 1980s.
By the early 1980s, faced increasing competition, in spite of a successful business-ready
platform, the Apple III was designed to take on the IBM PC in the business environment.
Unfortunately, the physical design of the case wasn’t sufficient, to be prone to overheating,
thousands of them were recalled and, although a new model was introduced in 1983, the
damage was already done.
On December 12, 1980, Apple went public with an initial public offering (IPO) at US
$22.00 per share.1
On the NASDAQ stock market, the Apple Inc. shares were traded, initially
with dividend payments from June 15, 1987 to December 15, 1995. It generated more capital
than any IPO since Ford Motor Company in 1956 (cf. iCon: Steve Jobs) and instantly created
more millionaires (about 300) than any company in history.
In addition Apple Computer’s business division, a separate group was focused on a
computer that would change the world. In return for the right to buy US $1,000,000 of pre-
IPO stock, Xerox PARC granted Apple Computer three days access to the PARC facilities.
Apple Computer benefited new ideas from the first GUI computer for the Apple Lisa.
Introduced, in 1983 at a cost of US$9,995, it failed to penetrate the market.2
In October 1983, the Macintosh was announced to the press and by a single national
broadcast of the now famous US $1.5M television commercial, “1984”. Directed by Ridley
Scott, it aired during the third quarter of Super Bowl XVIII on January 22, 1984, and is now
considered a “masterpiece”. The costs almost ruined Apple.3
In November 1984, Apple spent
more than US $2.5M to buy all 39 of the advertising pages of Newsweek’s special post-
election edition.4
At the “Test Drive a Macintosh” promotion 200,000 people participated.
Because many computers were returned in such a bad shape that they could no longer be
sold, dealers disliked the promotion.5
This marketing campaign caused that former CEO
John Sculley raise the price from US$1,995 to US$2,495 (adjusting for inflation, US$4,417 to
US$5,525 in 2012).6
1) (http://investor.apple.com/faq.cfm)
2) (http://www.squidoo.com/macstory)
3) (http://www.forbes.com/sites/allenstjohn/2012/02/02/the-super-bowl-ad-that-almost-killed-apple/)
4) (http://www.macmothership.com/gallery/gallery3.html)
5) (http://video.google.com/videoplay?docid=-7477607466590444036)
6) (http://146.142.4.24/cgi-bin/cpicalc.pl?cost1=2%2C495.00&year1=1984&year2=2012)

15 June 2012
- 6 -
Two days after the “1984” ad had aired, Apple sold 72,000 computers in 100 days, 50%
more than even its most optimistic sales predictions. For Apple’s Macintosh Office business
computing system a similar high concept spot, Lemmings had been produced. It wasn’t
successful. Apple closed three of its six plants that year and lay off 20% of its employees.
Eventually Steve Jobs left the company in the post-Lemmings aftermath.7
In 1985, Steve Jobs sold his entire Apple shares except one (about US$ 70M). As though by
chance, he had been attentive to Star Wars director George Lucas’ visual effects house.
Jobs bought it from Lucas for US$ 5M and spent another US$ 5M in the company, which
known as Pixar. Also went on to found NeXT Inc., that built machines with futuristic designs,
was bought by Apple Inc. for US$402M.8
Through Apple’s partnership with Adobe Systems, which introduced the laser printer and
Adobe PageMaker, the Macintosh brand was a success for Apple. Macintosh became well
known as the defacto platform for many industries including cinema, music, advertising,
publishing and the arts. Until the 1990s, Apple didn’t allow other computer makers to “clone”
the Mac. Long after Microsoft’s dominating marketplace with a broad licensing program,
Apple, Inc. lost market share except only 3%, it was too late for Apple, Inc. to reclaim its lost
market share. In 1997, Jobs returned to Apple as “Interim-CEO”, at that time Apple had 90
days before going to bankruptcy. He brought a new corporate philosophy of recognizable
products and simple design. In the turn of events, there were radical impacts.
Jobs cleaned up the management of Apple brutally, and reduced the product line
dramatically. Contracted out of agreements with manufacturers of Macintosh-Clones and of
all things brought Bill Gates, his antagonist on board. At MacWorld Expo, Bill Gates
announced the continual development of the office package for the Mac and the buying of
Apple shares with a value of US$ 150M. Jobs removed all deadbeats and layabouts, but not
everyone had been struck by iCEO’s wrath. Some of them allusion to old Apple-Logo, they
would bleed in six colors. One of these frustrated and undiscovered geniuses was the young
designer Jonathan Ive.
Jonathan Ive’s ideas were inspired by Dieter Rams, an industry designer. In Truth, Jonathan
Ive stole Dieter Rams ideas. The slogan “less is more” was the new designing credo of Ive
and Steve Jobs. Ive transformed the typical beige colored computers into semi-transparent
candy-like icons (iMac G3). In September 2000, Apple released the first open beta version of
the new operating system Mac OS X, which was based on NeXTStep-Software.
7) (http://www.forbes.com/sites/allenstjohn/2012/02/02/the-super-bowl-ad-that-almost-killed-apple/)
8) (http://www.mac-history.de/apple-geschichte-2/2012-02-17/steve-jobs-6-das-dynamic-duo-bricht-entzwei)

15 June 2012
- 7 -
After 11 years of improving and re-modeling the Mac OS X continually, today it’s known as
‘Lion’ (version 10.7). The mobile system iOS for iPhone, iPod touch and iPad derived from
this Mac OS X.
After one year of development, the release of the first iPod was announced, however six
weeks after terror acts on September 11, 2001, the people in the United States still in shock.
As then the iPod works with Windows-computers, the white Apple headsets went more
public. It was not alone about a portable device to play music on the way. It was clear, that
illegal file sharing services like Napster and Kazaa ruin the music industry. Particularly there
were not barely legal alternatives, to download the song easy. So, Jobs wanted an as simple
as possible pricing model (’99 Cent per song’). The revenues via iTunes did not compensate
the whole losing of lost business by records, CDs or DVDs. With iPod and iTunes, Jobs
changed the laws of the music industry and Hollywood forever; and extended the basis of
revenue for Apple in a new product category significantly. The introduction of the successful
iPod music player in 2001 established Apple as a leader in the consumer electronics
industry, so it dropped “Computer” from its name.
Apple sold until his first financial quarter 2012, end of December 2012, 183M iPhones.
Only Google keep up the competition on the iPhone. Steve Jobs was convinced until his
death, the success of Android was only possible through betrayal of Google-chief Eric
Schmidt. From 2006 to 2009, Schmidt was on board of directors and get processes of
development of the iPad and the iPhone. Schmidt had driven on the developments of a
competitive system. As the conflict of interests was obviously, Schmidt resigned his position
on Apple-board. Jobs get fit of rage, for him was Google a thief. For Steve Jobs, it has been
a triumph, which under his leading Apple could establish the iPad in the market as new
product category. Because in the last ten years, Bill Gates, his old antagonist, tried to
present tablet computers on fairs like CES repeatedly. But they were complicated to work on
it, and expensive and defective, that no buyers were be founded.
Apple’s 183M iPhones sell until Q1/2012

15 June 2012
- 8 -
3. Environmental analysis
3.1 Company description
Apple, Inc. designs, manufactures and markets a range of personal computers, related
software, media devices and portable digital music players (iPod), mobile phones (iPhone),
also tablet-computers (iPad). (Figure 6: Apple net sales by product 2010, 2011). Therefore, it
is the only company in the personal computer industry that designs and manufactures the
entire personal computer. It sells its products through its online store, direct sales force, third-
party wholesalers and resellers, and the retail segment operates Apple-owned retail stores in
the U.S. and in international markets. The company operates through the Americas, Europe,
Japan, Asia-Pacific segments. Apple operates in 13 countries: United States, United
Kingdoms, Canada, Japan, China, Italy, Australia, France, Netherlands, Switzerland,
Germany, Spain and Hong Kong.9
Apple is convinced that personal computing has entered a new era, in which computers
should now be designed to simplify the user’s (digital) life10
by combining computing with
consumer electronics11
and by pursuing this strategy Apple is uniquely positioned in the PC
industry.12
In identifying Apple’s main customer groups, it is clear that those are computer
users who don’t see themselves as part of the mainstream: graphic designers, students, and
anyone else who like to think that they are different.13
Who Uses What?
Mac users consist of:
 Home Office users such as authors & lawyers
 Startups such as Twitter & Monster Designs
 Accountants such as Nelson Accounting Professionals
 Architects such as KAA Design Group
 Creatives such as LinkedIn, T-Pain, Hallmark, and Francis Ford Coppola
 Health industries such as hospitals
 IT professionals such as MailWise
 Law firms
 Real Estate agents
 Retail stores such as Paul Frank
 Scientists such as The University of Manchester and The American Museum of
Natural History
9) (http://www.apple.com/retail/storelist/) 10) (Quittner J. and Winters R., 2002)
11) (Ganesan S., 2003) 12) (Apple Inc., 2003)
13) (http://www.marketingminds.com.au/branding/apple_branding_strategy.html)

15 June 2012
- 9 -
Windows users basically consist of the following:
 Home office users
 IT Professionals
 Developers
 Business owners
 Schools
 Hospitals
 Banks
The priority of use Apple PCs are to manage ambitious graphical tasks, to lay out magazine
or create printed matter. In publishing houses, graphic design offices and agencies, the
Macintosh operating systems (Mac OS) is counted de-facto standard. They are used in
education, domain level and common users. Furthermore Apple Inc. runs the internet
platform iTunes media, on which users could download music tracks, movies, TV shows,
audio books, podcasts and various applications (apps), digital editions of newspapers,
magazines and books for the iPhone and the iPad. The applications, photos and documents
could be saved in the iCloud automatically. All applied Apple-devices supports a push-
service, which users have full access to their personal data. With beginning of iPhone, iPod
Touch and now iPad, the company has been in the iOS range of products very successful.14
(Source: http://www.valuefolio.com/blog/apples-aapl-economic-moat-and-its-exploding-asia-pacific-sal.html)
14) (http://www.finanzen.net/unternehmensprofil/Apple)

15 June 2012
- 10 -
Key executives compensation
(source: http://www.businessinsider.com/blackboard/apple)
3.2 The SWOT Analysis of Apple, Inc.
SWOT stands for Strengths, Weaknesses, Opportunities and Threats, and is essential to
define the currently and could-be position of a business. In order to find out Apple’s position
and strategy, internal factors (strengths and weaknesses) and external factors (opportunities
and threats) are analyzed. (Figure 8: structure of SWOT analysis).
Strengths
Strengths are internal factors that a firm may build on to develop a strategy, which are
marketing strengths like a strong brand or access to a good distribution network. Operations
strengths like high level of efficiency, flexible production systems and high quality level.
 iTunes is a marvelous revenue source, it sells its own tool, the iPod; and is accessible
on Windows as well.
 Apple produces own software for every hardware and is master of expertise for both.

15 June 2012
- 11 -
 Apple’s so much appealing design, is also easy to use.
 The good brand loyalty of Apple Computers
 Mergers with Intel Computers since 2006
 High developed Research & Development department
 Rapid growing market
 The services/products offered by Apple are original, meaning many people will return
to Apple to obtain them.
Weaknesses:
 Weaknesses ofacompany orbusiness are the negative elements that couldbe improved
because they are under the control of that business. Marketing weaknesses are such
as limited distribution, a poor product range and ineffective promotion. Operational
weaknesses are such as old, inefficient equipment and poor quality.
 Weak relationship with market titan Microsoft Company
 Technological products have extremely short lifecycles, so 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 Microsoft.
 High prices
Opportunities:
Opportunities are external factors that influence the company’s current and future position.
They are presented as offers, trends, needs that promise beneficial outcomes for the
company.
 The production of computer anti-viruses,whichareincreasingonPC’s
 Increasing bonds and partnerships with other companies
 Increasing online sales
 TV with touchscreen and motion technology to challenge Samsung and Sony.
Threats:
Threats are negative external factors the company has no control over. In cases of threats, a
company can identify them and workout solutions of how they can be turned beneficial.
 Apple has in the Laptop market very strong competition by Dell, HP and Toshiba
 Media piracy: iPod users illegally downloading music for free instead buying at iTunes
 The long economic recession, which might influence Apple’s sales in the near future
 Windows 7 (software), which is gaining more and more market share
 The very high speed of technology development

15 June 2012
- 12 -
3.3 The most influential competitors
 What are the strengths and weaknesses of the competitors?
 What is the dynamic of competition in the industry like?
 What kind of competitive structure does the industry have?
Issues 1: What are the strengths and weaknesses of the competitors?
Dell has been even awarded for customer services. So they need to focus more on the
customer support and improve the areas they already have problems.
Hewlett Packard does business in 170 countries gave them opportunity to dominate in the
market by selling printers. Has its own printer accessories segment. Have to focus more in
marketing, which will catch people attention.
Microsoft Corp. operates multinational in more than 60 countries, people feel more
comfortable with their services. Bill Gates his own makes Microsoft weak, because as being
the head of Microsoft he didn’t develop still a band of products.
IBM does diverse businesses geographically and is leading provider of IT services. It has
strong research and development capabilities. But it is weak in mobility product portfolio and
hasn’t portable products.
Amazon’s content commerce model delivers digital music, movies, TV shows and books
(kindle). Have to go a long way to managing and accessing contents beyond standard PCs
and basic mobile devices.
Android, Google’s OS for smartphones, is quickly evolving into a product. Stronger customer
services for applications, because of incompatibility of wide range of smartphone-products.

15 June 2012
- 13 -
Sony has movies, music, e-books, and console and mobile games. Sony should create a
Sony-driven user environment that manages its own content across an ecosystem of Sony
products.
Issues 2: What is the dynamic of competition in the industry like?
Apple and all computer producer firms depend on components and software from suppliers.
Processor is the core component of computer because the general performance of computer
is usually associated with processor speed. Apple merged with Intel Company, because of
rapid innovation of processor. Intel Company develops every 3months new CPUs. Besides
computer need operating system software, to provide environment for applications. Microsoft
is dominating the OS market share as the main competitor. More than 90% PCs using
Microsoft Windows. It is hard for Apple to get back market share, because of high switching
costs. To be a little more specific, on below left is a graph that illustrates which operating
system versions are most popular in the market share.
(source: http://www.hongkiat.com/blog/mac-vs-pc-myth-busting-consumer-guide/)
The graph below gives you an idea about how the market was moving between the different
operating systems, starting from September 2009 to July 2010.
(source: http://www.hongkiat.com/blog/mac-vs-pc-myth-busting-consumer-guide/)

15 June 2012
- 14 -
Issues 3: What kind of competitive structure does the industry have?
The structure of computer industry is a monopolistic competition. It is characterized by a lot
of competitors, easy to enter due to low entry barrier and certain differentiation created by
the firms in the industry. The market becomes saturated and fragmented which make only
small market share possible. The global shipment figure for mobile phone industry (iPhone)
is actually slightly less, there is a price war in subscriber segment.
3.4 PEST Analysis
PESTEL stands for political, economical, social, technological, environmental, legislative
analysis. There are many factors in the macro-environment that will effect the decisions of
the managers of any organization.15
In case of Apple, focused only to the first four influences,
so the PEST analysis helps determine the current situation of Apple, identifying potential
influences of the political, economic, social and technological sectors. (figure PEST (EL)
analysis, appendix p. 23)
Political Influences:
In 2001, joining China to WTO created opportunity as well as threat for Apple. Lower
investment barrier and market barrier gives Apple opportunities to take advantage of low cost
labor and getting potential market, however for competitors to. Apple had to respond to move
its plant to China, to become more efficient or get cost inefficiency disadvantage over
competitors.16
In financial 2010, international sales contributed between 52% and 58% (figure
p12). Bad international relations, wars and terrorism might influence Apple and there is no
way to control this by Apple. Producing many of parts and products outside the United States
like Ireland, Czech Republic, Korea and China, Apple may have awful outcomes, because of
political conflicts between the United States and any of this states.17
(source: http://lowendmac.com/ed/fox/11ff/more-international.html)
15) (http://www.oup.com/uk/orc/bin/9780199296378/01student/additional/page_12.htm)
16) (http://www.foxnews.com/scitech/2010/02/18/inside-apples-secret-manufacturing-plants/)
17) (http://lowendmac.com/ed/fox/11ff/more-international.html)

15 June 2012
- 15 -
Economic influences
The global economic depression might have immense impact on Apple. The inflation rate is
high, while consumer’s incomes didn’t have significant change; moreover the unemployment
rate has increased, leading consumers to spend less. Apple, Inc. has purchased itself foreign
currency, to minimize the economic effects of inflation. The depreciation of U.S. dollar has in
fact increased Apple’s revenue in the international market.18
Social Influences:
The worldwide interaction of people counts technology great role. Today’s World cannot be
imagined without technological devices as Computers, mobile phones to be up to date with
information or isolated from “The Social Network”. Apple is the globally seen as the King of
technology, because of quality and design. Another big social influence is the music industry,
Apple having developed the biggest virtual media store, iTunes. All in all, Apple’s image also
portrays the modern individual’s lifestyle, combining functionality with design, leading to
brand identification and loyalty. Lifestyle and need of consumers are continuously changing.
Customers’ needs in the entertainment segment are better graphics and better sound, so this
segment needs computer to have faster processing power, graphical purchasing power and
good sound system devices. Customers need smaller, lighter computer as well as longer
time of battery life for to be mobile.
Technological Influences:
The technology market for computers and mobile phones has become huge, adding more
competition in the market. Technology innovations are almost as fast as light, the products
lifecycle is very short. Investing largely in Research and Product Development makes 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. The Wintel (Windows Intel) family created a large number
of competitors as threat of new entrant. The platform is not produced by single firm. The
competitors offer similar product to Apple with only little different in features, brand and
design. Several Apple competitors are IBM, HP, Dell, Lenovo, Acer, Toshiba, Dell, Samsung,
HTC, Sony and Microsoft. The computer industry is characterized by low threats of substitute
product, because Wintel PCs are the same kind of product with Apple PCs.
There are no pure substitutions for Apple PCs, so it is considered as rivalry instead of
substitution. But there’s the market for online music, which rises in an exorbitant manner for
last years.
18) (http://financial-alchemist.blogspot.de/2009/11/apple-inc-aapl-weaker-dollar-will.html)

15 June 2012
- 16 -
The portable music market, Apple's iPod, which is based on hard-disk, is facing a massive
competition. Still there is the traditional music industry with selling CDs, music DVDs. From
July to October 2003 7.7M digital tracks were recorded as sold, compared to only 4M
physical units of CD singles.19
From 2006 to 2010 in all major markets of Europe the sales of
CDs declined up to 35%. Much better was the digital market, including downloads of singles
as well as bundles.20
So history has shown, consumer preferences changes in high tech
markets frequently. (Figure 11 and 12, p. 18) The music cassette has been replaced by the
CD, nowadays the music CD is preferred by some consumers than digital music tracks,
because product’s solid state and classic style, behave to collect.
4. Business Analysis of Apple Inc.
Today Apple’s operations are as diversified as they were never before. From less than
10,000 employees in 2002 to more than 47,000 today, and it created 7800 U.S. jobs in
2011.21
Nowadays, Apple have 63,300 employees. With worldwide annual sales of US
$108.60B22
Apple is the largest technology firm in the world. It announced to plan holding its
US$100B cash reserves for March 19, 2012.23
4.1 Portfolio overview
Because Apple is an international aligned company, with a strong diversified business
segments, a portfolio analysis could be useful. Such business analysis allows an evaluation
of every single business segment according to their strategic cash flow position.
19) (http://www.internetnews.com/ec-news/print.php/3286881)
20) (http://www.stringworks.ch/specials/musikalben-der-sargnagel-fuer-die-musikindustrie/)
21) (http://www.apple.com/about/job-creation/)
22) (http://www.marketwatch.com/investing/stock/aapl/profile)
23) (http://www.engadget.com/2012/03/18/apple-cash-reserves-conference-call/)

15 June 2012
- 17 -
Based on a market-share growth matrix, which is also known as BCG-matrix, product
segments could be shown as follows.
Question Marks means products or business segments with a low to moderate relative
market share and moderate to high market growth, which leads to high negative cash flow.
By these products, you should be sure, if you invest long-term or withdraw.
Products and business segments with low to moderate relative market share, but with a low
to middle market growth referred as Poor Dogs. They have less a positive, but often a
negative cash flow, this indicates its better you disinvest on these products or business
segments.
To Cash Cows be counted products and business segments with moderate to high relative
market share and low to moderate market growth. Thanks to their high positive cash flow,
they provide to siphon off by the company.
Eventually the fourth cash flow position is the so-called Stars. They are characterized by
moderate to high relative market share and middle to high market growth. Because of their
positive cash flow, it is worth to invest in these products and business segments.
Following products could be evaluated (figure 13, appendix p. 24):
 Mac Desktops (iMac, Mac mini and Mac Pro)
 Mac Portables (MacBook, MacBook Air and MacBook Pro)
 iPod
 Other Music related products and services (iTunes store, App store and iBookstore in
addition iPod services and Apple-branded and third-party iPod accessories)
 iPhone and related products and services (in addition iPhone services, and Apple-
branded and third-party iPhone accessories)
 iPad (in addition iPad services, and Apple-branded and third-party iPad accessories)
 Peripherals and other hardware (displays, networking product and other hardware)
 Software, Services and other sales (Apple-branded and third-party Mac software and
services)
(source: http://www.appsapps.net/wp-content/uploads/2012/03/MarketerNews3.jpeg)

15 June 2012
- 18 -
(source: http://www.schonleben.de/2012/05/mobile-market-share-apples-schneller-weg-zur-
hegemonie/)
4.2 Corporate identity
Corporate culture defines the specific set of values and norms shared by people.24
As a
shared understanding of assumptions and expectations among an organization's members it
reflects in the policies, vision, and goals of that organization.25
After Schein (1985) exist three
level of corporate culture, the visible ones (artifacts). Stated values of the company, what is
important for the company (goals, philosophies or strategies) and the determined basic
assumptions.26
In fact, the company’s culture saw personal creativity and self-expression as
the source of competitive advantage.27
Today Apple’s culture can be described as a culture
which focuses on innovation and creativity, and has definitely become an adaptive culture.28
Jobs also gave up a secret of what makes Apple successful. The essence of what causes
Apple to win is the same thing that causes startups to innovate. The smart collaboration that
underlies the creative acts of innovation throughout Apple and that exemplifies the
company's culture.29
4.3 Corporate Social Responsibility
Apple reports environmental impact comprehensively. And it has used a comprehensive life
cycle analysis to determine where greenhouse gas emissions come from. The products have
the least amount of impact on the environment. About 98% of Apple’s carbon footprint is
directly related to products. The manufacturing accounts for 61% of Apple’s total greenhouse
gas emissions. 5% are a result of transporting products from assembly locations to
distribution hubs in regions where products are sold. From 2007 to 2011, the packaging of
iPhone reduced by 42%. The use of products generates 30% of Apple’s total greenhouse
gas emissions. Every single Apple product exceeds the United States Environmental
Protection Agency’s strict ENERGY STAR guidelines for efficiency.
24) (Hill C. W. and Jones G. R. – 2004, p. 417)
25) (David Caldwell, professor of management at Santa Clara University)
26) (Nerdinger – 2003, quoted in Case Study – Corporate Culture by Katrin Weislowski – 2009, p. 6)
27) (Morden T. – 1993, p. 243) 28) (Hill C. W. and Jones G. R. – 2004 , p. 418)
29) (http://www.businessweek.com/innovate/content/jun2010/id20100610_525759.htm)

15 June 2012
- 19 -
In fiscal 2011, more than 10,000 employees participated in Commute Alternatives program.
The using of transit options that reduces traffic, smog, and CO2 emissions associated with
the use of single-occupancy vehicles. This includes more than 1100 Cupertino-based Apple
employees.
Apple is committed to the highest standards of social responsibility across our worldwide
supply chain. By Fair Labor Association (FLA) as the first technology company accepted, it
opens its supply chain to the FLA’s independent auditing team to measure performance
against FLA’s own Workplace Code of Conduct. It represents a level of transparency that is
unmatched in the industry. Expanding audits to 28 suppliers in Malaysia and Singapore,
countries known to be destinations for migrant workers. In 2011, as a result suppliers
reimbursed US $3.3M in excess foreign contract worker fees, bringing to US $6.7M the total
that has been repaid to workers since 2008. In 2011, audits discovered instances of ethical
breaches including:
 Falsifying work-hour records and employee profiles
 Providing falsified payroll records and misleading answers in interviews with Apple’s
auditing team
 Obstructing the auditing team’s effort to obtain payroll records
 Coaching workers with intimidating language on how to answer questions
Apple addressed the issues by requiring further audits and investigations, repayment of
underpaid workers, adjustment of worker benefits, adjustment of management processes,
remediation of health and safety violations, and retraining of management. In some cases,
Apple terminated their business relationship with the supplier.
5. Conclusion
We are able to understand how a strong company works and has different strategies. Also
we discovered that a crucial factor for a company to stay alive is to stay up to date with
ongoing and upcoming trends. In the past decades, the PC/multimedia industry has evolved
greatly. The interaction of political, economical, social and technological factors creates a
turbulent and complex environment. The interaction between the Porter Five creates, for
Apple, an environment of full competition, in which is hard to survive. Since Apple Inc. is a

15 June 2012
- 20 -
global corporation, it is important to have a department, specialized in trend monitoring and
scenario plan and analysis. If the intra-corporate relations between employees, managers
and the board of directors are based on friendship, trust, loyalty and creativity, they will
achieve maximum success.
List of references
Books
Hill C. W. and Jones G. R. (2004).Strategic Management - An Integrated Approach. 5th
edn.
Boston and New York: Houghton Mifflin Company
- Morden T. (1993). Business Strategy and Planning - Text and Cases. London:McGraw-Hill
- Nerdinger – 2003, quoted in Case Study – Corporate Culture by Katrin Weislowski – 2009
Magazines and other publications
- Quittner J. and Winters R. (2002, January 14) Apple’s New Core. Time Magazine.
- Ganesan S. (2003). Apple Computer: Evolution of product line. Global CEO, March 2003
- David Caldwell, professor of management at Santa Clara University
Internet
investor.apple.com
www.squidoo.com
www.forbes.com
www.macmothership.com
video.google.com
www.mac-history.de
www.apple.com
www.marketingminds.com.au
www.finanzen.net
www.oup.com
www.foxnews.com
lowendmac.com
financial-alchemist.blogspot.de
www.internetnews.com
www.stringworks.ch
www.marketwatch.com
www.engadget.com
www.businessweek.com
www.theofficialboard.de

15 June 2012
- 21 -
Appendix
Figure: Organigram of Apple Inc.
Executive Managers of
Apple Inc.
Board of Directors
Source: http://www.theofficialboard.de/org-chart/apple
Source: http://www.apple.com/de/pr/bios/

15 June 2012
- 22 -
Source: http://www.theofficialboard.de/org-chart/apple
The Apply, Inc. - Industry movement

15 June 2012
- 23 -
The PEST (EL) analysis

15 June 2012
- 24 -
Some products of Apple Inc.

15 June 2012
- 25 -

Analysis of the strategy of the Apple Inc..pdf

Recommended

Recommended

More Related Content

Similar to Analysis of the strategy of the Apple Inc..pdf

Similar to Analysis of the strategy of the Apple Inc..pdf (20)

More from Alicia Edwards

More from Alicia Edwards (20)

Recently uploaded

Recently uploaded (20)

Analysis of the strategy of the Apple Inc..pdf