WELCOME

TO

Current Performance
September 27, 2014:

Total revenue was $182,795,000

Cost of revenue was $112,258,000
Gross Profit was $70, 537,000
Operating income was $52,503,000
Net income was $39,510,000

Continued..
Apples vision

is Man is the creator of

change in this world. As such he should be
above systems and structures,
and not
subordinate to them.

Apples mission is Apple is committed to

bringing the best personal computing
experience to students, educators, creative
professionals and consumers around the
world through its innovative hardware,
software and internet offerings.

Corporate Governance
Board of Directors:

Tim Cook
CEO,
Apple Inc.

Paul Deneve
Vice
President
Special
Projects

Bruce
Sewell
Senior Vice
President and
General Counsel

Top Management

Tim Cook
CEO, Apple
Inc.

Craig
Federighi
Senior Vice

Dan Riccio
Senior Vice President

President
Software
Engineering

Hardware
Engineering

External environment
Political Factors:

It is reported that more than a half of sales of their

products come from countries other than America.
Apple Inc manufactures a number of its parts and
products from outside the US, like Czech Republic,
Ireland, China, Korea and Cork.
The bad political relations between US and the other
world have bad outcomes for the company.

External environment
continued
Economic Factors :

Inflation, recession and currency are three important

economic factors that Apple noticed.
Since Apple Inc products were viewed as luxury
products, therefore customers started pending less on
them.
US dollar value keeps fluctuating, however the
company has purchased itself foreign currencies and
thus, the economic effects on the company are
minimized.

External environment continued

Social Factors:

As the world cannot be imagined without the gadgets,

thus Apple products have marked their presence on
the international market.
As the purchasing power of the common has risen in
various markets across the world the purchasing of
luxury products have gone up.
Possessing these items are considered as status
symbols in many societies which have also increased
the sales of Apple Inc products.

External environment
continued
Technological Factors:

Technology has a short lifetime. That is why Apple

needs to upgrade their product more often so they
will outdo their competitors easily.
Apple Inc has invested largely in its product research
and development field and thus its products are at
the top of the new innovative products ranking.
One of the most innovative and technologically
advanced products is the iPod which marked the
demise of walkman.

Industry Environment
Porters Five Forces:
Threat of New Entrants
Bargaining Power of Suppliers
Bargaining Power of Customers
Threats of Substitutes
Competitive Rivalry between
Existing Firms

Threat of New Entrants: Depends

on products

In Personal Computers (PCs) market, threat of new

entrants is low. Because Apple, Dell, HP Compaq,
Lenovo, Sony and Toshiba are well established and
highly competitive.

But in music player industry, there are high chances

of new arrivals for example Google is planning to
introduce new iplayer against iPod which have many
new features.

Bargaining Power of Suppliers:

High

Apple is providing very complex devices in the market

and it is not manufacturing everything by own.

The supplier has some power due to they have the

ability to supply the unique materials to apple in the
way for apple to produce the unique products.

Bargaining Power of Customers:

Low

Not a threat to apple

Apple has millions of buyers (Individuals and large

corporation)

The have the ability to increase its prices of some

products due to unique and well differentiated.

The popularity of Apple's products contains very low

bargaining power of buyer due to its popularity
especially iPod and iphone.

Threats of Substitutes:
Medium

Examples of Substitutes :

Ipod samsung mp3 player / Sony MP3 player

Ipad samsung tab

Iphonesamsung galaxy note / sony ericcson / nokia

Apple achieves economies of scales, enabling it to produce in lower cost

Apple market better than the competitor

Apple brand is well known and recognized brand

Competitive Rivalry between

Existing Firms: High

The threat of existing rivals is very high for Apple in

current market.

Apple is operating in two big market segments like

personal computers and portable music players.

There are big names competing in the market like

Dell, HP Compaq, Gateway and Toshiba.

Every Rival is providing different products and

services with different strategies which make difficult
for Apple to gain maximum share of the market.

Internal Environment
Corporate Structure
Matrix structure of management.
The current structure is consistent
with current corporate objective and
strategies.
Corporate Culture
Global mindset.
Cost Efficiency.
Strong project management practices.

Internal Environment
Continued.
Sales and Marketing
Reasonable Pricing : Introduce their product with reasonable price
Brand Loyalty : Always make it as a different products compared to others
Retail Outlets : Allow the customer easy to obtain the products.

Continued.
Finance

Apple announced financial results for its third fiscal

quarter of 2014 which ran from March 30, 2014 until
June 30.

Apple posted revenue of $37.4 billion and net

quarterly profit of $7.7 billion, or $1.28 per diluted
share (adjusted for stock split).

These results compare to revenue of $35.3 billion and

net profit of $6.9 billion, or $1.07 per diluted share, in
the year-ago quarter.

Gross margin was 39.4 percent compared to 36.9

percent in the year-ago quarter. International sales
accounted for 59 percent of the quarters revenue.

Continued
Research and Development
27/09/2014:
28/09/2013:
29/09/2012:
$6,041,000
$3,381,000

$4,475,000

Continued
Operations

Products are designed highly recyclable aluminum enclosure.

Apple have also qualified thousands of components to be free of elemental

bromine and chlorine.

Logistics

Apple used variety of direct and indirect distribution channel, such as retail
stores, online stores, 3rd party cellular network carriers, whole sellers,
retailers and value added resellers.

Continue

to expand and improve its distribution capacities by

expanding the number of its own retail stores worldwide in order to
ensure a high quality buying experience for its product

SWOT Analysis
IFAS: Internal Factor Analysis Summary

Internal Factors

Weight

Ratting

Weighte

Comments

d Score
S1.Marketing

and

advertising

15

75

Marketing and advertising

capabilities

extensive

15

60

Strong

capabilities
S2.

Strong

and

Brand

awareness

extensive

distribution

channels

distribution channels in the U.S.

and

10

30

W1. Lack of product breadth and

15

75

S3.

and

reputation

offerings at different price points

W2.

Weak

direct

distribution

offerings at different price

15

60

channels in China and India

W3. Dependence on iPhone and

points
weak

direct

distribution

channels in China and India

10

40

iPad sales
Total Score

Lack of product breadth and

100

340

EFAS: External Factor

Analysis Summary
External Factors

Weight

Ratting

Weighted

Comments

Score

O1. Acquisitions of valuable companies

15

75

Acquisitions of valuable
companies

O2. Mobile payments

15

60

Mobile payments

O3. Wearable gadgets

10

40

T1. Competition

15

75

Competition

T2. Strong U.S. dollar

15

60

Strong U.S. dollar

T3. Lawsuits over patent infringements

10

40

Total Score

100

350

SFAS: Strategic Factor Analysis Summary

Strategic Factors

Weight

Ratting

15

Weighted
Score
75

O2. Mobile payments

15

60

T1. Competition

15

75

T2. Strong U.S. dollar

15

60

Strong U.S.
dollar

S1.Marketing and
advertising capabilities

15

75

Marketing and
advertising
capabilities

S2. Strong and extensive

distribution channels in
the U.S.
W1. Lack of product breadth
and offerings at different
price points

15

60

Strong and extensive

distribution channels

15

75

W2. Weak direct distribution

channels in China and India

15

60

O1.

Acquisitions

of

Short

Intermediar
y

Long
X

Acquisitions of
valuable
companies

Mobile payments

valuable companies

Comments

Competition

Lack of product
breadth and
offerings at
different price
points
Weak direct
distribution
channels in China
and India

TOWS Matrix

IFAS Strengths

Weaknesses

1. Marketing and
advertising
capabilities
2. Strong and
extensive
distribution
channels in the U.S.
3. Brand awareness
and reputation

1. Lack of product
breadth and
offerings at
different price
points
2. Weak direct
distribution
channels in China
and India
3. Dependence on
iPhone and iPad
sales

Opportunities

SO Strategies

WO Strategies

1. Acquisitions of
valuable companies
2. Mobile payments
3. Wearable gadgets

Apple should be more

strong using its
opportunities.

Apple should use its

opportunities to
overcome its
weaknesses.

Threats

ST Strategies

WT Strategies

1. Competition
2. Strong U.S. dollar
3. Lawsuits over patent
infringements

Apple should use its

strengths to compete
its threats.

Apple should reduce its

weaknesses to compete
its threats.

EFAS

Strategic Alternatives
Alternative-01: A cost leadership
strategy
Pros:
Attract price sensitive customers
Continuous efficiency improvements
serve as a barrier of entry to potential
entrants
they may also enjoy the advantages of
the bargaining power of supplier as the
costs of the margins are higher than its
competitors.

Alternative Strategies
Cons:
Competitors imitate cost leaders strategy
requiring cost leader to increase value by
reducing price and/or adding valued features
at same price. It would not be sustainable in
Short-term.
Alternative-02: Geographical Horizontal
Growth
Pros:
For Apple, it is an opportunity to enter the
immature China Market and India for
increasing its product sales in the short term.

Alternative Strategies
According to its philosophy,
Where product sell, where
production place, Apple should
plant a new base in China for
long term production.
Cons:
investing a wrong city in China
will seriously waste huge
resources as well as the time
spends.

Alternative Strategies
Alternative-03: Production Horizontal
Growth
Pros:
For Apple, it is also an opportunity to
increase its competition advantages in
order to increase the market share in
short term.
Cons:
Higher the risk of providing or producing
unprofitable products/services.

Alternative Strategies
Alternative-04: Push Strategy
Pros:
Increase awareness and goodwill.
Increase total sales and profit.
Build a good relationship between suppliers
and retailers
Cons:
Set up a high-quality sales network need a lot
of resource and time that increase the cost
and the workload of staff.
Too many promotion audience may feel
clutter.

Alternative Strategies
Alternative-05: Pull Strategy
Pros:
Build up a good relationship between buyers
and customers.
Increase total sales and profit.
Enhance brand awareness.
Cons:
Too many premiums might depreciate Apple
brand image. So, premium may use for the old
brand.
Production cost will increase when too many
advertising and premium.

Recommendation
For

the corporate level of Apple

we are recommending:
Geographical Horizontal Growth
Product Horizontal Growth

Recommendation
For

the functional level of Apple

we are recommending:
Marketing Strategies
Product Development
Push Strategy
Pull Strategy

Evaluation and Control

It

is concluded from strategic management

analysis at Apple Inc. that technological
industries are never easy to compete with.
Apple Inc. must locate new and untouched
markets in order to sustain their plan for
expansion; this has the opportunity to
increase profits on a great level.
They have a lot invest at R & D and have to
be proactive in order to compete with their
competitors in the industry.

Thanks To All

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