LEADING UNIVERSITYReport On

Case study of

Apple Inc. in 2008 Problem identification and Internal &

External analysis

Submitted by:1. Bishwajit chowdhury

(0901010196)2. Shamsher Ali Liton

(0901010207)3. Mahdi Iqbal Quraishi

(0901010219)4. Nazimul Islam (0901010222)5. AKM Sadiqur Rahman (0901010200)6. Mizanur Rahman (0901010188)

Section- D, 9th Semester, Dept of BuA.

Submitted to:Md. Ridwan RezaSenior Lecturer,Dept. of Bu.A

History:

• April 1976, Apple Computer, Founder Steve Jobs

• Industry: Computer Hardware and Software, Consumer Electronics

• 1984, Macintosh

• Sculley- Mac with new features

• Amelio- Return to “Premium Price”

• Jobs back-Apple Turnaround

Current Scenario - Sales

1Q Market Share08

Dell

HP

Acer

Apple

Toshiba

Others

Current Scenario – Low market share 6.6%

Opportunities

• Fast growing Industry (Customer Electronics Industry)

• Technological Innovations

• Extend new products to loyal customers

• High Potential music phone market

• Strategic Alliances

• Jan 2007- Apple Inc.

• CE Industry

Big move

Competitor Environment

• High Competition• Share of Dell and HP• Microsoft and Intel-Leaders of Software• CE Industry- Sony, Nokia, Samsung, Cisco,

Motorola

Threats

• Extensive Competition

• Substitute Products

• Low prices of Competitors

• Technical Advancements

• Economy downfall

• Branding

• Innovation

• Differentiated Product

• Ease of Use

• Superior Quality

• Retail Strategy

• Marketing and Sales

• Customer Loyalty

• Online Sales

Strengths

Five forces Model

Weakness

• High Price Proprietary System

• Niche Market, Less Penetration

• Cannibalization

• Differentiation Strategy• Value Creation

Core competencies

Differentiation Strategy

• Unique Features and characteristics

• Commands Premium Price

• High Customer Service

• Superior Quality

• Prestige

• Rapid Innovation

SustainableCompetitiveAdvantage

Apple’s Strategy

• Apple employs a Product Differentiation

• Drawbacks as a result of their strategy include:– Not appealing to Price

Conscious Consumers

– Risk of Imitation by Competitors

– Risk of Change in Customer Taste

Strategic Alternatives

Problem Strategy Alternative

Low Market-Share Price Differentiation

Extend their current product line to include some products with a lower price point. Ex. Re-launch “Mac Mini”

Financial performance• With their fiscal year ending on

September 26, 2009, Apple reported total net sales of

• $36.537 billion dollars among each of their five operating segments in 2009. This figure

• is up from $32.479 billion dollars in 2008 and $24.006 billion dollars in 2007.40

• The Americas account for most of the company’s net sales, with $16.142 billion

• dollars in 2009. Europe accounts for the second-largest operating segment net sales, with

• the Retail segment not far behind. Figure 4 illustrates how these figures are attained

• through contributions from each operating segment.

Apple’s Net Sales of Operating Segments (in millions)

Table shows that from 2007-2009, Apple experienced a 266% sales increase within the iPhone product line—the largest product sales increase between 2007 and 2009. Apple’s music-related and software products also experienced significant increases in sales during this three-year span.

Apple’s Net Sales by Product (in millions)

Problems

• Stock price down due to the absence of the CEO.

• Apple has lost the exclusive right to use its own GUI.

• The cost of Apple’s product are high.

ConclusionApple’s future operations depend largely on the company’s ability to continue developinghigh-quality components of mobile communication devices, such as: microprocessors,nonvolatile (NAND) flash memory, dynamic random access memory (DRAM), liquidcrystal displays (LCDs), and many more—all in sufficient quantities made available toconsumers at competitive prices.The company plans to continually stimulate demand for certain products byimplementing new design, operability, and user-friendly features. Apple also plans tocontinue lowering product prices, despite the fact that doing so would affect thecompany’s gross margins unfavorably. Due to their significant international operatinglocations, fluctuations with resources, exchange rates, and taxes can also affect theirfuture financial results and operational strategies.Apple’s future also depends on third-party developers and their ability to continuecreating software applications that are both powerful and useful for Apple’s products.Companies like Microsoft, Dell, Sony, Hewlett-Packard, and other manufacturers ofelectronic communication devices could pose a major threat if third-party Apple softwaredevelopment should decrease or cease in production.