NCRD Sterling Institute of Management studies

Strategic Management report on

APPLE INC.

A

Presentation

on

Presented to:

Prof. Seema Laddha

Deepak R Gorad

Girish Suvarna

Sachin Thete

Ganesh Shirsat

Sandeep Ramraje

THREAT OF

SUBSTITUTE

PRODUCTS &

SERVICES

BARGAINING

POWER OF

SUPPLIERS

BARGAINING

POWER OF BUYERS

Porter’s Five Force Model

THREAT OF NEW

ENTRANTS

Medium• PCs are available in multiple

configurations, performances and

price ranges

• PCs represent about 90% of the

market

• Huge network externalities for PCs

• No Mac clone available No

competing product in the Mac

market

Low• Suppliers compete among

themselves to obtain exclusive

contracts with Apple and therefore

have no bargaining power.

Medium• End-users are mostly loyal.

• Cost of switching to PC is high.

• PCs have dominance in the

marketplace, and huge network

externalities.

• Threat of switching to Wintel

platform always present.

Low• High capital investmentCommoditized

market makes it difficult to differentiate

• Substantial dominance of low-cost large-

scale players (Dell, HP, IBM)

Value Chain

FIRM INFRASTRUCTURE

HUMAN RESOURCE MANAGEMENT

PROCUREMENT

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RV

ICEPRIMARY

ACTIVITIES

SUPPORT

ACTIVITIES

MA

RK

ET

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& S

ALE

S

TECHNOLOGY DEVELOPMENT

COMPETITIVE

ADVANTAGE

PRIMARY ACTIVITIES

INBOUND LOGISTICS• Procurement of raw materials is supervised by apple but

carried out by Chinese manufacturers.

OPERATIONS• Production is Completely outsourced to various chinese

manufacturers.

• Apple supervises production to ensure it adheres to their

strict quality control policy

OUTBOUND LOGISTICS• Finished goods are delivered directly to apple retail stores

around the world.

MARKETING & SALES• Apple advertises online, on TV and through print ads.

• Apple stores have various programmes to promote their

products.

• Apple is also endorsed by their fiercely loyal customers.

• Products are sold by Apple resellers, through the Apple

website and at 194 retail stores around the world.

SERVICE• Applecare provides extensive customer support around

the world

• Updates of software are regularly released.

FIRM INFRASTRUCTURE• Apple infrastructure consists of a single campus in

California, USA.

• Apple has 194 Retail Stores around the World.

• Manufacturing is completely outsourced.

HUMAN RESOURCE MANAGEMENT• Apple employs approximately 20,000 employees around

the world.

TECHNOLOGY DEVELOPMENT• Apple spent 712 million in research and development in

2006.

• Apple has one of the most admired design and

engineering departments in the world.

PROCUREMENT•Apple chooses its suppliers based on its stringent

standards of technology and quality.

SUPPORT ACTIVITIES

GLOBAL SMARTPHONE SALES Sales growth in mln

04. COMPANY

MAJOR PLAYERS WITH THEIR STRATEGIC OPTION

PORTER’S FIVE FORCES OF APPLE ( VALUE RATING)

COMPANY 8

WHAT OUR COMPANY DOES

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COMPANY 9

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Liquidity RatiosCurrent Ratio

0

0.5

1

1.5

2

2.5

3

2009 2010 2011 2012

Current Ratio for Apple

Current Ratio for HP

Current Ratio for Dell

0

0.5

1

1.5

2

2.5

3

2009 2010 2011 2012

Quick Ratio for Apple

Quick Ratio for HP

Quick Ratio for Dell

Liquidity RatiosQuick Ratio

0

5

10

15

20

25

30

35

2009 2010 2011 2012

Fixed Assets Turnover for Apple

Fixed Assets Turnover for HP

Fixed Assets Turnover for Dell

Activity RatiosFixed Assets Turnover

0

0.5

1

1.5

2

2.5

2009 2010 2011 2012

Total assets turnover for Apple

Total assets Turnover for HP

Total Assets Turnover for Dell

Activity RatiosTotal Assets Turnover

-15

-10

-5

0

5

10

15

20

25

30

2009 2010 2011 2012

Net Profit Margin for Apple

Net Profit Margin for HP

Net Profit Margin for Dell

Profitability RatiosNet Profit Margin

-15

-10

-5

0

5

10

15

20

25

30

35

2009 2010 2011 2012

Return on Total Assets for Apple

Return on Total Assets for HP

Return on Total Assets for Dell

Profitability RatiosReturn on Total Assets

THANK YOU FOR YOUR ATTENTION

Questions?