Oral Presentation - Apple Case

The case: Apple
Group members
Annette Cherry
Keisha Hinds
Annette Boney
Immogene Marshall-Weeks
Glendon Henry
Dakarai Louis
Objectives
● Summary of case
● Identify The external/competitive 5 forces acting within the environment
that Apple. Inc operates
● Identify The internal environment of Apple. Inc
● Evaluate the Vision, mission and business model of Apple. Inc
● Discuss the Apple. Inc SWOT analysis
● Give an analysis of Apple. Inc Finances and its Value chain
● Assess the existing competitive and corporate strategies
● Give Recommendations and Justification for Apple. Inc.
● Note; some of the information presented will be based on assumptions.
Apple: Background
Apple was founded in 1976 by then named CEO Steve Jobs and
college partner Steve Wozniak. In 1978, Apple became one of the
most rapid-growing companies in the U.S.A. by mid 1980s into
2000’s, Apple developed and produced a wide range of products.
Though, Apple suffers from several challenges and has a vision and
mission statement which is not concise , its marketing strategies
along with the development of over 300 retail stores distributed
locally and across the international seen has allowed the company to
make millions of dollars. Apple has managed to sustain its
competitive advantage over rival companies such as HP, XERON,
and IBM by a substantial margin.
Apple: Vision and Mission
Apple:Vision and Mission Analysis
According to (David & David , 2017) book of Strategic Management

concepts and cases, although the vision and mission is not narrowed down to a
single sentence it still comprise of the key elements:
● Customers
● Technology
● Philosophy
● Public image
● Employees
Apple: Business Model
● Apple’s Business Model is based on the

development and sale of its products.
● It offers a wide range of technological

products from PCs to portable digital
music players. They also sell a range of
related software.
● Type of model applied is a brick and

click
Apple: Business Model
VALUE PROPOSITION
● Apple offers an exclusive product

range .
● Offer niche products. These products

are unique and unlike any other.
● They can control costs through the

ownership of retail and wholesale
stores thereby adding value to the
customer.
Apple: P.E.S.T.L.E Analysis
POLITICAL/LEGAL ECONOMIC
● Import/Export Regulations
(New Markets) ● High propensity of people to spend
● Flexible Foreign Trade
● Change in consumption patterns
Policies (Operating in various
Markets) ● Exchange rates
● Environmental Laws (Health
& Safety practices) ● High profitability
SOCIO/CULTURAL
● Catered to businesses, youth, educational markets
● Protected the environment
● Global Change in taste and preference for new products
● Positive attitudes towards product quality
● Impact on how we communicate eg laptops -- portables

TECHNOLOGICAL
● Technological advances by rival firms
● Rapid rate of technological change

Apple: P.E.S.T.L.E ANALYSIS
ENVIRONMENTAL
● Integrated sound environmental, health and safety management

practices
● Incorporation of environmental, health and safety management systems
● Environmentally friendly products and services
Porter’s Five Forces Model
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Apple: External Environment (5 Forces)
THREAT OF SUBSTITUTES (High)
Threats of Substitute Products are those products which meets the customer’s
needs from different businesses or industries (Hill et al, 2004). Various players in
the market that offer similar or alternative products to Apple.
Products from Dell, HP and Microsoft

BARGAINING POWER OF SUPPLIER (Low)
Is dependent on the availability of suppliers ( Hannagan, 2002)
Apple has options to go to more than one supplier in the music industry e. Warner. EMI,
Sony and Universal
BARGAINING POWER OF CONSUMER (High)
Ability to bargain down prices ( Hill, 2004)
Apple is an exclusive brand - have control over the market
Apple sells their products at high prices and are still able to maintain market share
THREAT OF NEW ENTRANTS - (Low)
“Refers to companies who are not currently competing but have the ability to if
they choose to” (Hill et al 2004:40)
The case does not speak of any
RIVALRY AMONG COMPETING BRANDS (High)
Rival firms across the globe are getting better and better at quickly duplicating
Apple products and offering those newly enhanced products at lower prices.
Apple’s rivals are HP, Dell, Xerox, NCR and IBM
Apple: SWOT Analysis (Internal)
STRENGTHS WEAKNESSES
● Brand Name ● Not having a definitive mission and

● Company Image vision
● Profitability ● Excess liquidity
● Innovation/Creativity ● Vulnerability to obsolete products
● Unique Products and displacement by rival firms
● Dependence of sales on high-end
market segments
Apple: SWOT Analysis (External)
OPPORTUNITIES THREATS
● Increase in market share ● Aggressive Competition
● Further Market Development ● Risk of changing Foreign

Trading Policies
● Further Market Penetration
● Further Product Development

Internal Factor
Evaluation Matrix (IFE)
STRENGTH
Key Internal Factor Weight Rating Weighted Score
1.
Brand Name 0.10 3 0.30
2.
Company Image 0.10 3 0.30
3.
Profitability 0.15 4 0.60
4.
Innovations/Creativity 0.15 4 0.60
5
Products 0.10 3 0.30
WEAKNESSES Weight Rating Weighted
Key Internal Factor Score
1 No HR Manager 0.15 2 0.30
2. Excess Liquidity 0.05 2 0.10
3 Vulnerability to obsolete products 0.05 2 0.10

and displacement by rival firms
4 Dependence of sales 0.15 1 0.15

on high-end market segments
TOTALS 1.00 2.75

External Factor
Evaluation Matrix (EFE)
OPPORTUNITIES
Critical Success Factors Weight Rating Weighted

Score
1. Hire HR Specialist 0.20 4 0.80
2. Increase Market Share 0.20 4 0.80
3. Further Market Penetration & 0.10 3 0.30

Development
4. Further Product Development 0.15 3 0.45

THREATS Weight Rating Weighted
Critical Success Factors Score
1. Aggressive competition 0.25 1 0.25
2. Changing Foreign Trading Policies 0.05 2 0.10
TOTALS 1.00 2.70

Competitive Profile Matrix
Apple Dell HP
CFS Wts Rates Wtd. Rates Wtd Score Rates Wtd Score
Score
Financial Position 0.22 4 0.88 3 0.66 3 0.66
Product Quality 0.18 4 0.72 3 0.54 3 0.54
Customer Loyalty 0.10 4 0.40 3 0.30 3 0.30
Market Share 0.25 3 0.75 4 1.00 3 0.75
Global Expansion 0.25 4 1.00 2 0.50 4 1.00
TOTAL 1 3.75 3.00 3.25

Apple: Financial Analysis
● High level of profitability

● High level of liquidity
● Net Sales increased by over 30% in 2010 which we
can assume was due to the introduction of the new
Apple Ipad.
● Zero Long-Term Debt on its balance sheet.
Apple Inc: Ratio Analysis
Kommentare
Profitability Ratio
2010 2009
Gross Profit 0.61 0.60
Operating Profit Margin 0.28 0.27
Return on Assets 0.19 0.17
Return on Equity 0.29 0.26

Liquidity Ratios
2010 2009
Current Ratio 1.52 2.74
Quick Ratio 1.96 2.70

Long Term Solvency
2010 2009
Debt to Asset 2.74 2.99
Debt to Equity 0.57 0.50

Apple: Value Chain Analysis
PRIMARY ACTIVITIES
INBOUND LOGISTICS
● Cloud Music from EMI Music and Warner Music Group

● Manufacturers of their own products.
● Create their own designs (intellectual property)
● We make the assumption that they source their raw materials.
PRIMARY ACTIVITIES
OUTBOUND LOGISTICS
Products are sold globally, through its retail stores, online stores, direct sales force and
third party cellular network carriers, wholesalers, and value-added resellers.
PRIMARY ACTIVITIES
OPERATIONS
The Manufacturing of the Environmentally friendly products
Trained and Talented persons involved in the manufacturing of products and services
Operates a total of 317 retail stores - 233 in the US and 84 Internationally

PRIMARY ACTIVITIES
SALES AND MARKETING
Knowledge-based employees providing direct contact with its targeted customers
Markets products through its retail and online stores
Promotional campaigns using Direct Mail, Print Media, TV commercials.
Internet advertising, Product Placement etc.

PRIMARY ACTIVITIES
SERVICE
Experienced, Knowledge-based employees who provide product advice and service

through direct contact with customers.
Offer of a wide selection of third-party hardware, software and various other

accessories and peripherals.
PRIMARY ACTIVITIES
PROFIT MARGIN
SUPPORT ACTIVITIES
General Administration
● Strong Cash Position - used to invest in Training and Development
● No Presidents of Divisions
● No Small Business Units (SBUs)

SUPPORT ACTIVITIES
Product Research and Development, Technology, Systems Development
● Constant innovation of core desktop and laptop computers (Operating Systems)

● Technology has allowed Apple to create an exclusive niche market thus
maintaining its competitive advantage over its rivals. (innovative and unique
technologically advanced products and software over Windows)
● Provide a portfolio of consumer and professional software applications
● A 35 year history of being the first company of its kind to introduce blockbuster,
successful new products.
SUPPORT ACTIVITIES
Human Resources Management
● Attract, Recruit and Retain experienced and talented workforce

● Provide training for employees
Apple: CORPORATE STRATEGIES
DEFENSIVE STRATEGY
Strategic Alliances with major record companies with the cloud music
portfolio
DIVERSIFICATION STRATEGIES
● Related Strategy - PCs, laptops, IPads, IPods

● Unrelated - Cloud Music - Not Technology, it is Entertainment
INTEGRATIVE STRATEGY
● Forward Integration - have a wide variety of retail and wholesale

stores including online /internet sales
INTENSIVE STRATEGIES
● Market Penetration - 233 retail stores in USA

● Market Development - 84 retail stores internationally
● Product Development - constant improving and developing their
products
Apple: COMPETITIVE STRATEGIES
Differentiation
Apple practices the Differentiation competitive strategy as it offers

unique products and services through the various designs, brand image,
technology features, and customer service.
Recommendations for Apple
● Implementation of a formal mission and vision statement

● Entry into other global markets to increase market share
● Make products difficult to duplicate as rival companies seek to produce
similar products.
● Further investments in Research and Development
● Seek to target newer markets with a less expensive product
● Hire Sr VP in HR to ensure Apple strategically utilize the HR functions
which includes HR and Succession Planning.
JUSTIFICATION
● To influence strategy formulation and implementation

● To increase market share
● Competitors were rapidly imitating Apple’s products
● Company is very liquid and can invest in new research and
development of more innovative and cost effective products.
References
● Hannagan T., (2002) Mastering Strategic Management Hampshire Palgrave

● Hill C. and Jones G., 2004 Strategic Management An Integrated Approach 6th ed.
Boston Houghton Mifflin Company
● Rabin et al (2000) Handbook of Strategic Management 2nd ed. New York Marcel
Decker Inc.
● Salamon M., (2000 ) Industrial Relations Theory and Practice 4th ed. Essex: Prentice
Hall
● David F, and David F., (2017) Strategic Management A Competitive Advantage
Approach Concepts and Cases 16th ed. Vivar Pearson
And That’s All Folks

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The case: Apple

According to (David & David , 2017) book of Strategic Management

● Apple’s Business Model is based on the

● It offers a wide range of technological

● Type of model applied is a brick and

● Apple offers an exclusive product

● Offer niche products. These products

● They can control costs through the

● Catered to businesses, youth, educational markets

● Protected the environment

● Global Change in taste and preference for new products

● Positive attitudes towards product quality

● Impact on how we communicate eg laptops -- portables

● Technological advances by rival firms

● Rapid rate of technological change

● Integrated sound environmental, health and safety management

THREAT OF SUBSTITUTES (High)

Products from Dell, HP and Microsoft

BARGAINING POWER OF SUPPLIER (Low)

Is dependent on the availability of suppliers ( Hannagan, 2002)

BARGAINING POWER OF CONSUMER (High)

Ability to bargain down prices ( Hill, 2004)

Apple is an exclusive brand - have control over the market

THREAT OF NEW ENTRANTS - (Low)

The case does not speak of any

RIVALRY AMONG COMPETING BRANDS (High)

● Brand Name ● Not having a definitive mission and

● Increase in market share ● Aggressive Competition

● Further Market Development ● Risk of changing Foreign

● Further Product Development

Key Internal Factor Weight Rating Weighted Score

1 No HR Manager 0.15 2 0.30

2. Excess Liquidity 0.05 2 0.10

3 Vulnerability to obsolete products 0.05 2 0.10

4 Dependence of sales 0.15 1 0.15

TOTALS 1.00 2.75

Critical Success Factors Weight Rating Weighted

1. Hire HR Specialist 0.20 4 0.80

2. Increase Market Share 0.20 4 0.80

3. Further Market Penetration & 0.10 3 0.30

4. Further Product Development 0.15 3 0.45

1. Aggressive competition 0.25 1 0.25

2. Changing Foreign Trading Policies 0.05 2 0.10

TOTALS 1.00 2.70

Financial Position 0.22 4 0.88 3 0.66 3 0.66

Product Quality 0.18 4 0.72 3 0.54 3 0.54

Customer Loyalty 0.10 4 0.40 3 0.30 3 0.30

Market Share 0.25 3 0.75 4 1.00 3 0.75

Global Expansion 0.25 4 1.00 2 0.50 4 1.00

TOTAL 1 3.75 3.00 3.25

● High level of profitability

Gross Profit 0.61 0.60

Operating Profit Margin 0.28 0.27

Return on Assets 0.19 0.17

Return on Equity 0.29 0.26

Current Ratio 1.52 2.74

Quick Ratio 1.96 2.70

Long Term Solvency

Debt to Asset 2.74 2.99

Debt to Equity 0.57 0.50

● Cloud Music from EMI Music and Warner Music Group

The Manufacturing of the Environmentally friendly products