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Apple.pptx
- 1. STRATEGIC ANALYSIS OF APPLE INC.
- 2. • Apple Inc. is a multinational technology company born in America and it has its headquarters in Cupertino, California. • Apple is responsible for designing, developing, and selling consumer electronics, computer software, online services and personal computers. • Apple Inc. is one of the largest organisations in the world (Heracleous and Papachroni, 2018). Introduction
- 3. Strategic Framework: VMOST Mission This Apple mission statement of states: “Apple is developing Mac, the best PCs in the world, as well as OS X, iLife, iWork and expert programming. Mac controls music from computers using iPod and the iTunes online store. Apple has re-evaluated the phone using the Advanced iPhone and the App Store recently released its mysterious iPad, which is the perfect place for wearable devices and stickers.” Vision Apple introduced another vision led by Tim Cook, stating: “We recognise that we are in the centre of the earth to produce exceptional products and that they do not develop. We constantly focus on progress. We practice the basics, not the complex ones. We recognise that behind significant innovations are the products that we manufacture and own, own and control. We participate only in those areas of activity in which we can play an important role.”
- 4. Strategic Framework: VMOST Tactics: Competitive Advantage • Apple’s most competitive position is that it has worked perfectly well to abuse its brand. • Apple is characterised by a high-quality plan and personalised management. • Apple is looking for a wide separation technology Objective 1 - Continue to produce inspirational products. Strategy: Apple must have an incredible team that integrates innovative idea and pioneering team. Objective 2: Future Development and Innovative Technology. Strategy: In order to continue to receive better products, Apple needs to research the market to timely cope with customers need.
- 5. Apple business strategy can be classified as product differentiation. Specifically, on the basis of simple, yet attractive design and advanced functionality. Apple business strategy consists of the following three elements: 1. Focus on design and functionality of products. 2. Strengthening Apple ecosystem. 3. Decreasing dependence of the business on the sales of iPhones Apple’s Generic Strategy
- 6. Both measure has improved from previous years which is showing positive inclination. Apple Inc. ROE & ROA Analysis
- 7. The primary strategies that makes Apple Inc. competitive: • Good Brand Image • Innovative Products • Strong network of Supply Chain • Premium Pricing Strategies Core Resources and Competencies
- 8. Value Chain Analysis of Apple Inc. Inbound Logistics • Apple is known for working with hundred of suppliers from all around the world and their purchasing normally cover its requirements for periods for 150 entire days. Operations • The majority of Apple’s hardware products are currently being manufactured by outsourcing Asian partners.
- 9. Value Chain Analysis of Apple Inc. Outbound Logistics • Apple attempts to minimize the volume of its inventory due to cost. Marketing and Sales • Apple’s marketing budget is spent mainly advertising, public relations, events and experiences and direct selling. Service & Procurement • Apple is famous for its customer service, there are trained sales assistant at all experience centers in major cities all around the world.
- 10. Apple Stakeholders : Apple has many stakeholder groups, such as governments, local networks, community, organisations, Investors, employees and many other customers and competitors. Main Apple Shareholders are: 1. Steve Jobs, Co-founder of Apple Inc. 2. Chairman of the Board, Arthur Levinson. 3. Chief Executive Officer, Tim Crook. 4. Senior VP of Software Engineering , Craig Federighi. Apple’s Shareholders and Stakeholders
- 11. Apple’s Strengths • Most important brand • brand valuation of $ 234 billion. • Maximum technology SWOTAnalysis Apple’s Weaknesses • Expensive Products • Advertising and limited preview • Mismatch with other software
- 12. Apple Opportunity • Reliable customer growth • Qualified professionals • Large distribution network SWOTAnalysis Apple Threats • Corono virus outbreak • Apple is intimidated by counterfeiting • Increased competition • Market penetration
- 13. Apple Inc. Competitive Position
- 14. • Limited distribution network • High selling prices • Dependence of sales on high-end market segments • Aggressive competition • Imitation • Rising labour cost in various countries Apple Inc. Key Global Issues
- 15. • Innovative Designs: • Put additional emphasis on design development with internal resource allocation to continue to lead the industry in design. • Research user interface possibilities: • As a mode of setting Mac computers apart from other PCs Apple must continue to innovate in user interface focusing on ease of use and intuitive menu functions • Consumer electronics diversification: • While the PC market has grown increasingly crowded with competitors and customers saturated other areas of consumer electronics continue to grow. Developing complementary products in other categories provides broader sources of revenue by accessing more customers in markets with less intense competition. Apple should consider all work related to its operations in the iPod, iTunes, iSync, and iChat sectors. Recommended Generic strategies
- 16. Option One: Franchising of stores Option Two: Growth Strategy through new products and new market opportunities. Option Three: Vertical Integration Strategic Options
- 18. There are three drivers behind Apple’s growth and positive revenue growth: IPhone: The Average Selling Price of iPhone has increased up to $100 year- over-year. Wearables: The Apple's wearables platform have gradually increased sales momentum with the AirPods and Apple Watch going mainstream. Services: The App Store, AppleCare and licensing have resulted to strong revenue growth. Apple's Growth Drivers
- 19. Suitability: • Growth Strategy will be most suitable strategy in Apple’s situation as other competitors are imitating its icon products like iPhone. Apple should explore new products and markets. Feasibility: • Growth strategy is feasible to Apple. As it has most innovative HR, Strong network of supply chain and its vision and mission also support growth and innovation. Acceptability: • Stakeholders will be kept informed what the strategic plan is and where it fits. Stakeholders will be actively involved in the process. Apple’s SFAAnalysis
- 20. • The recommended strategies are implemented as follows: • Apple should build long term organizational strength by implementing a clear road map for its growth strategy. • Apple should hire technically brilliant, innovative pioneers with strong team working skills and high levels of ethics. • Build specific products of high quality, for the huge populations of Asian countries that are passionate about computers, mobile phones and applications. • prices should be according to the budget of underdeveloped countries economy. • Continue and intensify the search for innovative, stylish and useful products in its existing area of operations. • Make productive use of strong cash reserves. Recommended Implementation Strategy
- 22. Recommendations: • Apple Inc. should develop new- product line • Apple need to decrease the price to attract low income segment • Apple Inc needs to look its strategies to compete Samsung Conclusion: • This report has attempted to analyse in detail the Apple’s action plan and its bold methods. • Apple is focused on developing products that become the business standard that all other competitors are trying to emulate. • Apple can lower the cost of its products and remain serious by becoming the first pacemaker to succeed in some time (Heracleous and Klaering, 2014). Strategic Recommendation & Conclusion
- 23. • Aljafari, A. (2016) ‘Apple Inc. Industry Analysis - Business Policy and Strategy’, International Journal of Scientific & Engineering Research. • Apple Inc. (2020) Augmented Reality - Apple Developer, Apple Inc. • Ashcroft, J. (2012) ‘Apple from the iPod to the iPad. A Case Study in Corporate Strategy’, Corporate Strategy Ninth Edition. • Description, B. (2013) ‘Apple Inc. SWOT Analysis.’, Apple, Inc. SWOT Analysis. • Dimitrios, N. K., Sakas, D. P. and Vlachos, D. S. (2013) ‘Analysis of Strategic Leadership Simulation Models in Non- profit Organizations’, Procedia - Social and Behavioral Sciences. doi: 10.1016/j.sbspro.2013.02.053. • Finkle, T. A. and Mallin, M. L. (2010) ‘Steve Jobs and Apple, Inc’, Journal of the International Academy for Case Studies. • Lombardo, J. (2015) ‘Apple Inc. PESTEL/PESTLE Analysis & Recommendations’, Panmore Institute. References
Editor's Notes
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- Company History. Apple Computers, Inc. was founded on April 1, 1976, by Steve Jobs and Steve Wozniak. Jobs and Wozniak wanted to make computers small enough for people to have them in their homes or offices. Introduction Apple has created a respected brand that offers customers excellent quality. Apple believes that strategic management promotes the gadgets, creativity and customer attitude (Heracleous and Papachroni, 2018). The company has a wide range of products, ranging from iMac, Mac Mini, iPod, iTunes and, in addition to the iPhone, in many commercial areas. Apple’s iPhone 4G has taken first place in the global smartphone fair.
- 1. Focus on design and functionality of products. According to its business strategy, Apple has adapted advanced features and capabilities of its products and services as bases of its competitive advantage. The list of innovations introduced by Apple include, but not limited to the introduction of iPad, the first device of its kind that stored thousands of songs with a simple shuffle capabilities through songs, development Macintosh, the first computer to use a graphical user interface and the launch of iMac that “ripped up the computer design rule book, doing away with dull beige boxes and instead replacing them with fun, translucent machines in shades such as “Bondi Blue” that hinted at the aesthetic Apple would become so well-known for.”[1] First mover advantage is another element of Apple competitive advantage. It has to be stated that Apple competitive advantage may be challenging to be sustained for long-term perspective. Specifically, the management may fail in terms of ensuring the addition of innovative features and capabilities in new versions of its products, thus compromising its competitive advantage. 2. Strengthening Apple ecosystem. Apple business strategy can be characterised as vertical integration in a way that the company has advanced expertise in software, hardware, and services at the same time. Apple’s vertical integration is one of the major factors that set it apart from the competition. The company has been benefiting from its vertical integration immensely. Specifically, an important source of Apple competitive advantage relates to its ecosystem, which is enabled by such integration. Apple devices and software sync easily and work well with each other. Applications work on multiple Apple devices at the same time and there is no much difference in user interfaces; however the same items do not pair with products of other companies, thus creating the likes of a closed ecosystem. Apple’s ecosystem creates switching costs for its customers to the competition. The ecosystem also provides the opportunities to leverage relationships with existing customers to offer other products and services. 3. Decreasing dependence of the business on the sales of iPhones. Apple business strategy is transitioning from relying on iPhone sales to prioritizing its services business and other divisions. John Giannandrea has been promoted to a machine learning and AI role, retail chief Angela Ahrendts recently left the company and Bill Stasior has been removed as a head of Siri.[2] These high-profile changes that took place within the timeframe of less than three months are clear indication of company’s focus on services and other business divisions in order decrease dependence of the business on the sales of iPhones. It is important to note that these and other efforts are showing positive results. Specifically, Apple’s services business division generated record revenues of USD 10,9 billion in the first fiscal quarter of 2019, which is 19% increase year-on-year.[3]
- Apple Inc. is believed to have the ability to innovate. It has perfectly well exploit its brand in elite class. Apple combines diverse human resource, technology and monetary resources to carry out innovative ideas and products. Internal Analysis Generic Competitive Strategy Apple is looking for an extensive diverse technology. Apple is distinguished by its high-quality plan and personalised management. The acceptance level of its technology is widespread amongst clients, from raw users to clients with special needs (Jinjin, 2013).
- Primary stakeholders for the Apple include: customers, investors, employees, competitors and the communities. Steve Jobs is one of the most crucial shareholders as the co-founder of Apple Inc. Arthur Levinson is the largest shareholder with 1.16 million shares in the company. Tim Cook ranks the second with 901,474 shares.
- Limited distribution network Company has few distribution centres which should be expanded to increase the demand. High selling prices High selling price does not attract the low-income segment. Dependence of sales on high-end market segments High – end segment is considered as minority in business market. Too much dependency can lead towards low demand. Aggressive competition Samsung has more market share than Apple Inc which is threat and need to be addressed strategically. Imitation Due to high competition many firms imitate the Apple design and Apple product feature. Rising labour cost in various countries Contract manufacturer cost is increasing which is hurting Apple Inc profit margin.
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