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Apple inc. Strategic Case Analysis Presentation

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Full strategic case analysis for Apple incorporation including industry , competitor's and firm's self analysis. It covers all the strategic issues facing the industry and Apple inc. as well as the recommended solutions for these issues on business and corporate levels.
The study shows the development on the Apple Inc. mission& vision and the strategic objectives over time.

Publicada em: Negócios
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Apple inc. Strategic Case Analysis Presentation

  1. 1. Apple Inc. Case Analysis Presented by: Mariham Helal & Esraa Elseidy
  2. 2. Case Analysis Content:  Situation Analysis  Financial Analysis  Key Success Factors  SWOT Analysis  Recommendations  Implementation and Expected Outcomes  Evaluation and Control
  3. 3. Company Overview  Apple was founded by Steve Jobs, Steve Wozniak, and Ronald Wayne on April 1, 1976 to develop and sell personal computers.  It was incorporated as Apple Computer, Inc. on January 3, 1977, and was renamed as Apple Inc. on January 9, 2007 to reflect its shifted focus towards consumer electronics.  Apple Inc. headquarter in California.  Apple Inc. has 9 products , 7 services and 378 retail stores world wide
  4. 4. NAME HISTORY According to Steve Jobs, Apple was so named because Jobs was coming back from an apple farm, and he was on a fruitarian diet. He thought the name was "fun, spirited and not intimidating"
  5. 5.  Apple Inc. is an American multinational corporation headquartered in California, that designs, develops, and sells consumer electronics, computer software and personal computers.  Its best-known hardware products are the Mac line of computers, the iPod media player, the iPhone smartphone, and the iPad tablet computer.  Its consumer software includes the OS X and iOS operating systems, the iTunes media browser and the Safari web browser
  7. 7. Situation Analysis: Industry Overview : The Consumer Electronics industry includes electronic appliances that are used everyday, mostly for communication, entertainment, and office purposes.
  8. 8. Mission Statement "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."
  9. 9. iPod 42% iPhone 23% iPad 10% Others <1% Macintosh Computer s 25% From Where Apple is Making Money
  10. 10. iMac iPod iPod Nano iPad Mac Book Air iPhone 4s iPhone 5s iPhone 5C
  11. 11. Apple Inc. Competitors Apple has many competitors in the personal computers industry
  12. 12. Apple Inc. Competitors In smart phones industry
  13. 13. Apple Inc. Competitors In iPads industry
  14. 14. Strategic Group Map APPLE HTC SAMSUNG 0 2 4 6 8 10 12 0 0.5 1 1.5 2 2.5 3 3.5 Price Quality Smartphones SGM
  15. 15. Strategic Group Map for Software
  16. 16. Financial Analysis Ratio 2010 2009 2008 Comment Profitability Ratios Gross Profit Margin 39.30% 40.10% 35.20% Gross profit margin increased in 2009 compared to 2008,slightly decreased in 2010. It indicates the margin available to cover operation expenses and generate profits Operating Profit Margin 28.20% 27.30% 22.20% OPM improved throughout the years indicating profitability from operations regardless og interest Net Profit Margin 21.50% 19.20% 16.30% NPM improved throughout the years indicating good profitability and pricing strategies Return on Total Assets ( ROA) 18.60% 17.33% 15.40% ROA improved through the year reflecting good return on investment or the ability of assets to generate return Return on Equity (ROE) 29.30% 26% 29% ROE slightly declined in 2009 compared to 2008, but again it increased in 2010 reflecting the improved return on stockholders investments in the co. Earnings per share 15.15% 9.08% 6.78% EPS improved in 2009 compared to 2010 and improved dramatically in 2010 thus owners are well paid off
  17. 17. Liquidity Ratios Current Ratio 2.01 2.74 2.46 Decreased liquidity ratio but still good in 2010, it indicates that every 1$ of current liabilities is covered by 2.01$ of current assets Quick Ratio 1.96 2.7 2.42 Decreased quick ratio but still good in 2010, it indicates that every 1$ of current liabilities is covered by 1.96 $ of current assets, without the need to sell inventory Inventory to net working capital 5.01% 2.27% 2.47% Inventory increased drastically in 2010 compared to 2009 & 2008, yet still represents 5.01% from the working capital
  18. 18. Leverage Ratios Debt-to-Asset ratio 36.40% 33.40% 46.80% Improved debt ratio in 2009 compared to 2008 , and slight increase in 2010. yet the ratio indicates that the co. tends to lower financing its assets through debt Debt-to-Equity ratio 57.30% 50% 88.20% Improved debt to equity ratio in 2009 compared to 2008 , and slight increase in 2010. yet the ratio indicates that the co. tends to increase self or equity finance and decrease external debts Long term debt to Equity ratio 13.90% 13.70% 21% Improved long term debt ratio in 2009 compared to 2008 , and slight increase in 2010. yet the ratio indicates that the co. tends to lower depts financing its long term capital structure
  19. 19. Activity Ratios Inventory turn Over 62 94 73.6 Inventory turn over increased in 2009 compared tp 2008 then decreased in 2010 to 62 times, this might indicate accumulation of finished goods inventory , or mmay be the company metigates the risk of supply through increasing stock of raw materials Fixed Assts Turn Over ( FATO) 2.08 3.08 12.7 FATO is decreasing through the years of comparison, indicating mis management of fixed assets to generate sales, or that the company maintains too much fixed assets that are not much productive Total Assets Turn Over ( TATO) 0.87 0.9 0.94 TATO decreased slightly throughout the years of comparison, the decrease might indicate inefficiency of total assets o generate sales , but it should be compared to industry average to determine clear analysis
  20. 20. Issues  1. Product differentiation In today’s age there is a thirst for hot new products, and keeping a high end product on the shelves can be a challenge.  2. Product Diversification Apple has continuously expanded its product depth to extract all of its value. The question is how long can they keep doing this until consumers lose interest?
  21. 21. Issues  3. Maintaining Customer Loyalty ❏ Apple needs to maintain their high level of customer service to maintain their customer loyalty. This a big differentiating factor for their business.  4. Market Saturation ❏ A saturated market leads to less profits and decreased demand.
  22. 22. Key Success Factors  1-Technology  Apple is an expert in the computer technology and the electronics industry becoming a global leader in the computer industry and its R&D. ❏ They have expanded computer technology into phones, laptops, tablets, music players, and recently into watches.  2. Manufacturing  Apple has achieved both internal and external economies of scale by becoming the number one firm in their industry which lowered their production costs given extremely high demand
  23. 23. Key Success Factors  3. Distribution Strong Direct Sales Capabilities ❏ Apple’s brick and mortar stores has provided them with strong direct sales capabilities by dealing directly with the customers themselves ❏ This allows them to personally up sale their products, handle customer complaints, and gauge the overall demand for their goods  4. Marketing A well-known and well-respected brand name ❏ Currently Apple’s brand name is ranked number one in the world according to Interbrand's study of worlds most popular brands. ❏ This title increases their brand awareness and also proves they are at the top of their game in the electronics industry
  24. 24. Key Success Factors  5. Skills and Capability Design expertise ❏ Apple has prided itself on its design teams efforts in crafting unique designs that grab consumers and command their attention ❏ They are lightweight, colorful, and ever changing with different cases
  25. 25. SWOT Analysis
  26. 26. Strengths  ❏ #1 Globally recognized brand  ❏ Research and Development  ❏ Innovation  ❏ Healthy Financial Performance  Loyal Consumers  ❏ Economies of Scale
  27. 27. Weaknesses  High retail prices:  ❖ Apple has a differentiation strategy and charges higher prices for their unique products, but have to be careful to not charge too much.  ❏ Slowing innovation: If this happens, then Apple may lose a competitive edge.  ❏ Competition from major firms: Competition could intensify.
  28. 28. Opportunities  ❏ Sales growth in emerging economies  ❏ iWatch and Mac Pro  ❖ Demonstrating continued Apple innovation.
  29. 29. Threats  ❏ Stiff competition:  ❖ Competition is high and intense in the technology sector.  ❏ Product Imitations:  ❖ These product imitations could serve as a low cost substitute.  ❏ Potential saturation of mobile market:  ❖ If markets become saturated profits decrease for the industry and Apple.
  30. 30. Recommendations  Options for a leading company  Focus on differentiated lifestyle branding: Apple has successfully developed a differentiated lifestyle brand and must continue to build on this foundation while resisting pressure to move to the middle to directly compete with Dell and HP. 
  31. 31. Recommendations  Options for competing in international markets  Continue the expansion of Apple stores: The stores represent an important source of revenue for Apple and serve as an interactive advertisement for the Apple brand. Their success has been unmatched by any other industry player.  Emphasize the integrated system in advertisements: Apple's integrated system holds a significant advantage over other industry systems relying on Microsoft Windows, yet some customers have not experienced the seamless interoperability of all Apple products. This marketing angle will result in cross selling of more products to new and existing customers.  Apple should continue to support the educational and creative professional markets
  32. 32. Recommendations  Generic strategies  Design innovation: Put additional emphasis on design development with internal resource allocation to continue to lead the industry in design.  Research user interface possibilities: As a mode of setting Mac computers apart from other PCs Apple must continue to innovate in user interface focusing on easy-of- use and intuitive menu functions  Consumer electronics diversification: While the PC market has grown increasingly crowded with competitors and customers saturated other areas of consumer electronics continue to grow. Developing complementary products in other categories provides broader sources of revenue by accessing more customers in markets with less intense competition. Apple should consider all work related to its operations in the iPod, iTunes, iSync, and iChat sectors.
  33. 33. Short Menu  Option One: Franchising of stores  Option Two: Growth Strategy through new products and new market opportunities  Option Three: Vertical Integration Recommendations
  34. 34. Expected Outcomes of selected strategies
  35. 35. Strategy Implementation: Organization Structure:
  36. 36. Implementation  The recommended strategies are implemented as follows:  Build long term organizational strength by implementing a clearly thought out leadership development and selection programmer that will be able to develop the special leadership required for Apple.  Future leaders should be technically brilliant, innovative pioneers with strong team working skills and high levels of ethics.  Build specific products of high quality, but lesser prices, for the huge populations of India and China that are passionate about computers, mobile phones and music.  Continue and intensify the search for innovative, stylish and useful products in its existing area of operations.  Make productive use of strong cash reserves
  37. 37. Recommended strategy supportive policies:  Human Resources structured training programs  Rewarding plan for innovative ideas  Reward scheme for staff to increase their loyalty  Effective performance Management  Career planning and development
  38. 38. Action plans:  Producing an action plan can be beneficial not only for individual basis but also for businesses. For example, it allows project managers or any member of a group to monitor their progress and take each task step-by-step, therefore allowing them to handle the project efficiently. The advantage of doing this is, it allows you to execute a structured plan for the end goal you intend to achieve. Furthermore, it provides the team with appropriate foundations, therefore prioritising the amount of time you spend on each task.  This will then prevent any sidetracking that may occur. Lastly it creates a bond within a team, as each member is aware of their individual role, as well as providing necessary information to ensure success of the project 
  39. 39. Thank you..