APPLE INC.

STRATEGIC ANALYSIS
Students:
Balan Liviu
Cotet Emilia-Andreea
Orisor Gilda
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 the
development 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).
Apple had huge earnings at the end of :7+;( <-.6= profit on <;-.6= in sales.
Apple won for the second consecutive year the >arris Interactive?s 2=rand of the
8ear3 award in three categories ahead of its rivals including @oogle, "amsung and
Ama0on. The iPhone was the top rand for moile devices, in front of >T*,
"amsung and $@.
%orld&s 'ost Admired Comanies since :77A according to 5ortune Maga0ine.
Most competitive and fastest changing market space.
Bumer one1 as per Financial Times Glo(al )**Cin u(li$l" traded
$omanies having the greatest mar+et $aitali,ation.
T-e .i. -istor":
/001 1 Acquisition of Be#T rings "teve /os ack to Apple as a special advisor.
/002 1 "teve /os is named interim chief executive officer and introduces a new
line of Macintosh computer called @; and the wesite that enales people to order
directly from Apple
/003 1 The all1in1one iMac is released.
4*** 1 /os, firmly in command as *D!, oversees a leaner, more tightly focused
Apple.
4**/ 1 Apple opens its first retail store in 4irginia and the iPod is released
4**5 1 Apple opens its first store in /apan and the iTunes "tore allows users to uy
and download music, audioooks, movies and T4 shows online
4**) 1 The release of a video iPod, the fifth generation of the device, pushes total
iPod unit sales to ;7 million
4**2 1 Apple announce the iPhone which features one utton, smooth face and
virtual keyoard
1 introduce Apple T4 that attracts few uyers
1 iPod Touch 1un iPhone without the phone with wireless capailities
and performs much like a portale computer
4**3 1 opens its App "tore as un update to iTunes features small applications
from games to social and usiness tools
1 release Mac=ook Air
4**0 release iPhone ;@" &sold more than ::7 mil iPods)
4*/* egin selling the iPad 1touchscreen talet1has AEF share of the talet market
y the end of the year
4*// 4eri0on wireless starts selling the iPhone in stores
1 launches the suscription service for maga0ines, newspapers, videos and
music
1 launches the iPad : 1 a sleeker, lighter version, dual1core processor, two
cameras on : colors white and lack
E6TERNAL ANALYSIS
Dxternal environment determines the present situation of Apple Inc., and also helps find
out the possile influences of the political, economical, and social and the technological
factors on the organi0ation
/. 'a$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,
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, Iorea 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, :77A 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
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$es 'odel
T-reat o# ne9 entrants
>igh capital investments in
technology and production
Dstalished rand presence
>igh product differentiation
>igh switch costs
Kynamic international usiness
environment
5. 'ar+et Anal"sis
S%OT anal"sis #or APPLE In$.
"%!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 competitors
Intense competition
>igh product differentiation
Positive reputation for high quality and
perceived uniqueness in the eyes of
consumers
Kynamic environment making innovation
inevitale
T-reat o# su(stitutes
>igh numer of sustitutes
products
Product positioning and
innovation crucial for
survival
"trong rand name and loyal
customers results in a lower
risk
Bar:ainin: o9er o# Bu"ers
>igh numer of
sustitutes
>igh numer of
product suppliers
$ow switch cost for
consumers
Innovation helps the
company to maintain
competitive advantage
Bar:ainin: 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 !"
$ow argaining power of
Microsoft, Apple eing the ;rd
largest seller
Innovation
'etail presence and strategy
%ide distriution
>ori0ontal and 4ertical integration
Weaknesses
Poor relationship with the market than Microsoft
Products have very short life cycle, which concludes that the research and
development department has to e constantly maintained, which requires huge
capital
4ery low presence in the advertisements, and also it has very small market
occupation as compared to its main rival Microsoft. Thus, all this leads to the fact
that Apple Inc. gets very less usiness from its home country H", and maGor of its
usiness is from outside the H".
>igh price of products
There strategy went wrong in Indian market with there iphone as there marketing
communication to the sales and distriution model went wrong and most
importantly pricing of the product was too high for the Indian masses.
&$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
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
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 Strate:ies
Product differentiation
>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 strate:ies
'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.
"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
<ire$tions #or strate:" develoment
T-e =i> TO%S:
"M!
Increase I1phone and related product sales through online advertisement. !verall
net sales increased y ..F from :7+7.
Apple?s rand recognition throughout all its markets can strengthen y the
offering less expensive version of each product to appeal to lower income market.
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.
%MT
$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.
%M!
@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.
"MT
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.
5ocused '9K driving innovation and consolidating its market position. Apple?s
'9K expenditure was <+,-A: million in :7+7, an increase of ;;F from :77,.
This provides the company with new technological innovations which can e used
in Apple products.
5orm partnership with @oogle to supplement the Apple products.
'eferences
%o0niak, "., "mith, @.:77..I%!N( *omputer geek to cult icon.
"an.5ransisco( %.%. Borton and company, Inc.
Iahney, $.:77A.Inside "teve?s rain. Bew 8ork( Portfolio Press.
Apple Marketing Analysis 'eport( Apple iPhone *ase "tudy
https(MMwww.academia.eduME+7;7-,MAppleOMarketingOAnalysisO'eportOAppleOi
PhoneO*aseO"tudy
http(MMwww.slideshare.netMarunhatt7-Mppt1on1apple1incPtn$ast
http(MMpre0i.comMEG6ampgui;c7Mcopy1of1strategy1case1study1appleM
"trategic Analysis of Apple Inc.
http(MMwww.scrid.comMdocM6-A,E+A7M"trategic1Analysis1of1Apple1Inc
The Apple Talet s 'ole In Dmerging Markets.
http(MMappfrica.comM:7+7M7+M:AMthe1apple1talets1role1in1emerging1marketsM
Apple Dducation %esite,H
http(MMwww.apple.comMeducationMitunes1uM
Bokia, Microsoft in pact to rival Apple, @oogle
Q http(MMwww.cc.caMnewsMtechnologyMstoryM:7++M7:M++Mnokia1microsoft1smart1
phone1apple1 google.html RSAccessed +E March :7++T