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APPLE INC.

STRATEGIC ANALYSIS

Students:

Balan Liviu

Cotet Emilia-Andreea

Orisor Gilda


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APPLE INC.

STRATEGIC ANALYSIS

"The ones who are crazy enough to think that they can change the world, are the ones

who do"- Steve Jobs

Apple Inc. has incorporated numerous features that are unique and well known in the

market today. The iMac, iPod, iPhone and iPad represent a revolutionary era for thedevelopment of Apple through highly advanced technology, simplicity and design, the

sense of luxury and moreover the comfort and convenience that these products provide.

Apple designs Macs, the est personal computers in the world, along with !" #, i$ife,

i%ork and professional software. Apple leads the digital music revolution with its iPods

and iTunes online store. Apple has reinvented the moile phone with its revolutionary

iPhone and App"tore, and is defining the future of moile media and computing devices

with iPad. &Investor 'elation( Apple.com)

APPLE INC. !e" #a$ts:

An American Multinational *orporation founded on + April +- y "teve /os,

"teve %o0niak and 'onald %ayne.

Apple Inc. is a technology company, which designs, produces and sells goods in

the *omputer, Music and Moile1phone Industries.

The firm which started as 2Apple *omputer3 is est known for its Macintosh line

of computers ut also for products with appealing features such as( iMac, iPod,

iPhone and iPad.

The giant American conglomerate was estalished in *upertino, *alifornia in the

middle of the "ilicon 4alley.

Is among the 5ortune 677 companies &8oung9"imon :776).


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Apple had huge earnings at the end of :7+;(


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4**3 1 opens its App "tore as un update to iTunes features small applications

from games to social and usiness tools

1 release Mac=ook Air

4**0release iPhone ;@" &sold more than ::7 mil iPods)

4*/*egin selling the iPad 1touchscreen talet1has EF share of the talet market

y the end of the year

4*//4eri0on wireless starts selling the iPhone in stores

1 launches the suscription service for maga0ines, newspapers, videos and

music

1 launches the iPad : 1 a sleeker, lighter version, dual1core processor, two

cameras on : colors white and lack

E6TERNAL ANALYSIS

Dxternal environment determines the present situation of Apple Inc., and also helps find

out the possile influences of the political, economical, and social and the technological

factors on the organi0ation

/. 'a$ro-environment anal"sis

PESTEL

Political Factors

Issues regarding copyrights, monitoring of content distriution, environmental wa

ste, and the possiility of gloal trade monopolies.

%ar, terrorism, geopolitical uncertainties, pulic health issues, and other usiness

interruptions have caused and could cause damage or disruption to international

commerce and the gloal economy, and thus could have a material adverse effect

on the *ompany, its suppliers, logistics providers, manufacturing vendors and

customers, including channel partners.

The *ompany?s usiness operations are suGect to interruption y natural

disasters, fire, power shortages, nuclear power plant accidents, terrorist attacks,


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and other hostile acts, laor disputes, pulic health issues, and other events

eyond its control.

Apple Inc. manufactures a numer of its parts and products from outside the H",

like *0ech 'epulic, Ireland, *hina, orea and *ork and can e affected y the

ad political relations etween H" and the other world have

Economic Factors

The gloal economic crisis which had huge impact on Apple creating high

inflation and unemployment rate, thus customers started spending less on

companyJs products.

5luctuation of the H" dollar resolved y purchasing foreign currencies.

Apple products are priced higher than its competitors.

Social Factors

@loali0ation which plays a very important role in Apple?s products.

Increase in the purchasing of luxury products & iPhone, iPods and the latest

technology iPad) considered as status symols in many societies

The rapid growth of the music industry. The main virtual music store is the

iTunes.

"ocially Apple has made many social gatherings to attract its customer as it made

an extensive advertisement at the =eiGing !lympics @ames, :77 and they set up

many kiosks where they allowed customers to experience the Apple products.

Technological Factors

Apple Inc. has invested largely in its product research and development field and

thus, Apple products at the top of the new innovative products ranking due to

large investments in its product research and development

The product life cycle has een shortened drastically, which gives the advantage

of introducing newer products in the market

iPod has een reinvented several times with latest players to make it consumer

friendly

Environmental Factors


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In /une :77- Apple upgraded the Mac=ook Pro, replacing cold cathode lamps

with mercury1free $DKs and arsenic1free $*K glass, and has since done this for

all noteooks.

Apple has also phased out =5's and P4*s from various internal components.

Apple also offers detailed information aout the emissions, materials, and

electrical usage of each product.

Advertise environmentally friendly their new laptops are including television

"pots and maga0ine ads, in addition to touting these facts on their wesite.

Legal Factors

Bokia has filed various lawsuits against Apple Inc., claiming the violation of +;

additional patents y iPhone, iPad and iPod touch

Also, in *hina Apple Inc. has een fighting the attle for its right to the iPad

trademark.

Apple Inc does all its operations under the H" Trade $egislation guidelines.

4. Industries and se$tor anal"sis

In order to otain a description of the competitive market forces, the est technique to use

is Porter 6 force framework.

Porter7s 8ive 8or$es 'odel

Treat o# ne9 entrants

>igh capital investments in

technology and production Dstalished rand presence

>igh product differentiation

>igh switch costs

Kynamic international usiness

environment


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5. 'ar+et Anal"sis

S%OT anal"sis #or APPLE In$.

"%!T analysis respectively "trength, %eakness, !pportunity and Threat, help in

analy0ing the market for Apple and to estalish a strategy for the usiness y looking into

its internal environment &"trengths 9 %eakness) and external environment

&!pportunities 9 Threats).

Strengths

Technological edge over competitors. &%harton, :7+:)

"trong rand name

5or every software, there is a hardware with it too, which leads to its expertise in

oth the industries.

The design of the Apple products, which are also simple to use.

=rand loyalty of its product

'esearch and development department

aggressive marketing efforts

$ack of det

Cometitive rivalr"

$arge numer of competitorsIntense competition>igh product differentiationPositive reputation for high quality andperceived uniqueness in the eyes ofconsumersKynamic environment making innovationinevitale

Treat o# su(stitutes

>igh numer of sustitutes

products Product positioning and

innovation crucial forsurvival

"trong rand name and loyal

customers results in a lowerrisk

Barainin o9er o# Bu"ers >igh numer of

sustitutes >igh numer of

product suppliers $ow switch cost for

consumers Innovation helps the

company to maintaincompetitive advantag

Barainin o9er o# suliers

>ighly saturated industry in

hardware components Kependence on Intel for chips

required for Macintosh. Independence in non1pc devices

Kependency of Microsoft for

mac1compatile !" $ow argaining power of

Microsoft, Apple eing the ;rdlargest seller


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Innovation

'etail presence and strategy

%ide distriution

>ori0ontal and 4ertical integrationWeaknesses

Poor relationship with the market than Microsoft

Products have very short life cycle, which concludes that the research and

development department has to e constantly maintained, which requires huge

capital

4ery low presence in the advertisements, and also it has very small market

occupation as compared to its main rival Microsoft. Thus, all this leads to the fact

that Apple Inc. gets very less usiness from its home country H", and maGor of its

usiness is from outside the H".

>igh price of products

There strategy went wrong in Indian market with there iphone as there marketing

communication to the sales and distriution model went wrong and most

importantly pricing of the product was too high for the Indian masses.

&$ance9%oll, :77)

Asence of "teve /os

Opportunities

The introduction of more and more P* viruses, on which Apple Inc. can capitali0e

on.

The population of the world is growing at a rapid pace and thus opening the front

for many new markets,

The purchasing power of a common man has increased drastically, who can e

pursued or impressed to uy the luxury Apple products.

Paradigm shifts to P* to moile era

'oust outlook for Moile advertising

Threats


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Increased numer of competitors especially in the field of laptops, like Kell, "ony,

>P, and Toshia.

Many of the customers have started downloading the music for free instead of

purchasing at iTunes.

The product expensiveness is itself a threat to the product, as sustitutes at a

lower price are always availale.

$ong lasting recession

The technological advances that have een taking place.

'isk of International operations.

'isk of piracy and imitation

CO'PETITORS ANALYSIS

Criti$al Su$$ess 8a$tors:

Product strength and Innovation

*onsistency

Attractiveness

Dnsuring consumer loyalty through the Apple "tores

"olution provider

Media presence

Product range

INTERNAL ANALYSIS

'ission and ;ision

There are some authors who have compiled a mission statement for apple like 2Apple is

committed to ringing the est personal computing experience to students, educators,

creative professionals and consumers around the world through its innovative hardware,

software and Internet offerings &5reierger9"waine, :777)

2Apple designs Macs, the est personal computers in the world, along with !" #, i$ife,

i%ork, and professional software. Apple leads the digital music revolution with its iPods


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and iTunes online store. Apple reinvented the moile phone with its revolutionary iPhone

and App "tore, and has recently introduced its magical iPad which is defining the future

of moile media and computing devices.3

;alues

Apple 4alues are the qualities, customs, standards, and principles that the company

elieves will help it and its employees succeed. They are the asis for what they do and

how they do it.

Taken together, they identify Apple as a unique company.

Dmpathy for customers and users,

Achievement and aggressiveness,

Positive social contriution,

Innovation and vision,

Individual performance,

Team spirit,

Luality and excellence,

Individual reward and

@ood management. &%o0niak, "mith, :77)

Culture

The logo of a half itten apple has the following significance( the apple is for giving

respect to "ir Isaac Bewton for inventing the law of gravity and the half itten apple is

for the mathematicians Alan Turing who committed suicide y eating an apple which he

had laced it with cyanide. >e was regarded as on of the fathers of computers. The

company?s attire is very casual enaling employees to work in a fun environment.

Their culture is to e unique and to e innovative with sleek, stylish design and very

functional.

STRATEGIES

Business Level Strateies

Product differentiation


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>igh customer service

Maintaining the interest of the media

'apid innovation

!utsourcing service Hnique features

*ommand Premium Price

*reating a sense of pride to the owner

Cororate level strateies

'etail strategy

>ome '9K strategy

>ori0ontal integration through digital we strategy

4ertical integration etween P* and music market

5ocus on competitive advantage

Hniqueness

Moderate to high level of diversification

Maximi0e economies of scope with more products on same platform

They can stick to the Hedgehog concept. The >edgehog concept states that most

companiesJ usiness will lie within three circles(

%hat you are deeply passionate aout

%hat you can e the est in the world at and

%hat drives your economic engine.

The only way that a company can e great is to lie in the overlap of all three circles.


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"ource( thecoachtoolkit.com

As per "teve /os, everyone should have a great experience with technology

without any needed expertise, so Apple should continue to introduce user1friendly

products that their rivals will not match.

*ontinuing with providing innovative consumer products such as iPod, iPhone,

and iPad.

Dmphasis on products that drive their economic engine een y sustaining the

trend of introducing new versions of their flagship products on a yearly asis

continually oosting demand and generating greater revenues


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The company did not pay dividends ecause it reinvests the capital in the

operation of the usiness.

5ocus on =:= sales 9 promotion of software services 9 reviving revenues of the

iPod.

%T

$ong term agreements etween Apple Inc. and the suppliers to guarantee

production commitments.

*onstant promotion of the rand will create stronger awareness and demand for

products.

Promote laptop 9 desktop range 9 price them competitively.

Participation in local communities and charities to create positive image which

was shadowed y lawsuits.

*ontinue investment in technology in order to stay ahead of competitors and

ecome a market leader.

%!

@loal expansion through Mexico, Portugal, 5rance and Australia.

'oust outlook for moile advertising market provides growth opportunity.

*reating department responsile for recalls and product warranties to maximi0e

customer satisfaction.

Improve rand recall through television ads.

"T

Purchase voice and data network to complement the smartphone division will

help acquire stronger market position.

'oust financial performance strengthens investor?s confidence and provides

capital for future growth avenues, such as opening stores and expanding e1

commerce throughout the gloal market.


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5ocused '9K driving innovation and consolidating its market position. Apple?s

'9K expenditure was


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https(www.academia.eduE+7;7-AppleOMarketingOAnalysisO'eportOAppleOi

PhoneO*aseO"tudy

http(www.slideshare.netarunhatt7-ppt1on1apple1inctn$ast

http(pre0i.comEG6ampgui;c7copy1of1strategy1case1study1apple

"trategic Analysis of Apple Inc.

http(www.scrid.comdoc6-E+7"trategic1Analysis1of1Apple1Inc

The Apple Talet s 'ole In Dmerging Markets.

http(appfrica.com:7+77+:the1apple1talets1role1in1emerging1markets

Apple Dducation %esite,H

http(www.apple.comeducationitunes1u

Bokia, Microsoft in pact to rival Apple, @oogle

Q http(www.cc.canewstechnologystory:7++7:++nokia1microsoft1smart1

phone1apple1 google.html RSAccessed +E March :7++
http://appfrica.com/2010/01/28/the-apple-tablets-role-in-emerging-markets/http://www.apple.com/education/itunes-u/http://www.cbc.ca/news/technology/story/2011/02/11/nokia-microsoft-smart-phone-apple-google.htmlhttp://www.cbc.ca/news/technology/story/2011/02/11/nokia-microsoft-smart-phone-apple-google.htmlhttp://appfrica.com/2010/01/28/the-apple-tablets-role-in-emerging-markets/http://www.apple.com/education/itunes-u/http://www.cbc.ca/news/technology/story/2011/02/11/nokia-microsoft-smart-phone-apple-google.htmlhttp://www.cbc.ca/news/technology/story/2011/02/11/nokia-microsoft-smart-phone-apple-google.htmlhttp://www.cbc.ca/news/technology/story/2011/02/11/nokia-microsoft-smart-phone-apple-google.htmlhttp://www.cbc.ca/news/technology/story/2011/02/11/nokia-microsoft-smart-phone-apple-google.htmlhttp://www.cbc.ca/news/technology/story/2011/02/11/nokia-microsoft-smart-phone-apple-google.html

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