Apples history can trace back to 1976, when it was first founded by Steve Job, Steve Wozniak, and

Ronald Wayne. The company designs and sells consumer electronics, computer software, and personal computers. It has grown from a garage business to the worlds largest publicly traded company by market capitalization. With a 5.2% of the worldwide market, and 13% PC market share, Apple is now growing from a quarter to quarter rate about 22% (Apple 2011). Apple leads, innovates and dominates. However, while the company is celebrating its victory, therere some critical issues and risks Apple cannot overlook and should pay close attention to. These critical issues can be broken down to changes in the landscape of the industry, rising competition, and management concerns including Apples ego, reliance on secrecy and control in operation and loose focus on CSR. The paper will analyze these issues in detail and provide recommendations and risk analysis. Apple has long relied on secrecy and control in its operation. For instance, Apple controls and only allows certain applications into its ecosystem and the company has been notoriously secretive with its future product pipeline. These practices lead to lack of customization, inflexibility and customer disappointment due to Apple products recent failure to live up to the amount of hype generated by secrecy. The recommendation to these issues would be for Apple to pursue more transparency in their product management and give their customers more choice. Specifically, Apple should disband the App Review Board, rely less on media events to promote new products and implement an alternative payment system for the iTunes store. Apple in the past has demonstrated its ability to lead and dominate in the market. Being the largest technology company in the world has certainly given Apple some competitive advantages over its rivals, such as huge sales generated by large market share. However, once a small company who fought against giants like IBM and Microsoft, Apple has transformed into the IT titan itself and its ego has considerably grown as well. Many times, Apple takes certain things for granted such as assuming consumers preferences in products. Although Apple has been successful with its market projection so far, its achievement in the past does not guarantee its continuous success in the future. To resolve the issue, Apple should be more transparent with its future concept of tech ecosystem and create an atmosphere of customer and employee inclusivity in developing new project. Apple recently has been troubled by its partner Foxconn unethical labor practices scandal. Apples loose focus on CSR issue surfaced as the scandal caught global attention. CSR has become more and more important in corporate strategy as consumers nowadays do not buy products solely for its functionality; they also buy a culture and sense of identification. Continuing to ignore CSR will lead to brand image deterioration and eventual market share loss. The recommendation to this will be creating a global foundation that provides free apple products and services to various non-profit or educational outlets in less developed regions in the world.

Some other issues are also challenging Apples current market position, such as changes in the landscape in the industry and rising competition. Taking these issues and recommendations into account, Apple will further solidify its leadership status in the industry.

Strengths: One of Apples biggest strength is its strong brand image. The company is known for inventing innovative and high-tech quality products like iPhone, iPod, and iPad. Based on the technology review published by Massachusetts Institute of Technology, Apple is named as one of the 50 most innovative companies in 2012(Technology Review). Its brand name is globally recognized as well. Currently, Apple operates more than 300 retail outlets worldwide and has online shops used for selling products overseas (Apple Retail Store - Store List). More than half of Apples revenue comes from regions outside the America(Yukari& Rohwedder 2010). Thanks to its strong brand image and global popularity, Apple has shown consistently robust financial performance in the past years. According to Apples 2011 fourth quarter report, the companys earning more than doubled a year ago. Apple sold 37million iphones and 15.4 million ipads in the fourth quarter (Apple 2011). In return, investors show confidence in the company and Apple shares recently hit the record high above $500 which made Apple the most valuable company in the world. With the amount of capital, Apple has large flexibility when it comes to expanding and investing businesses. Weaknesses: Although Apple is a very successful multinational brand, it has its weaknesses as well. One of which is its rigid operating system with limited software support that drives customer to competitors. For example, all windows applications cannot work on Mac operating system, thus it creates inconvenience for consumers who want to use software like Microsoft Office suite. In

addition, users do not have plenty of choice if they want to switch to desired hardware when using Mac operating system. Usually, the most suitable hardware for Mac OS would be apple computers. The second weakness is that Apple relies heavily on outsourcing. All of Apples manufacturing is performed by a few outsourcing partners primarily in Asia (Apple 2011). Although the arrangements substantially cut down Apples operating expenses, they also reduce the companys direct control over the operation and production and put the company in a vulnerable position to any changes made by the partners. If Apples major partners withdraw from the agreement, Apples operation will be interrupted and huge loss will be incurred. Opportunity: Tim Cook took over as Apples CEO in August, which opened the door to changes in Apple. Cook has already been making some modifications since his take over. Tim Cook is more transparent with the public about the companys plans as well. Unlike Steve Jobs who thinks he knows all the answer and unwilling to share with the general public, Cook is more candid about certain aspect of the company, for example, the expansion plan for iPhone. Tim Cook is likely to continue making changes in Apples culture and environment and bring in opportunities for this IT giant. Based on Apples 2011 annual report, the company currently has nearly $100 billion cash on reserve (Apple 2011). With this enormous amount of cash, Apple will be able to embrace all possibilities. Apple can take on a more aggressive approach with acquisition and expand the company into new markets more quickly. For instance, purchasing Salesforce. com would allow Apple to expand its business in cloud computing . Apple can also invest the money in research and development to invent new products and create new market segment.

Threat: Apple runs in a fast changing and competitive industry. Failing to keep up with technology innovation, Apple will lose its market share to competitors like Microsoft, Google, and Samsung. For instance, Apple has lost some market share to Google Android due to the operating systems ability to support more applications. The company is also facing various problems in developing countries such as: government regulation and political instability, etc. Apples recent scandal with its partner Foxconns unethical labor practice has jeopardized the companys reputation, and many consumers lost confidence in the company and threaten to boycott the companys product if the issue is not resolved properly. Apples long troubling paten issue is another threat to the company. As the company has expanded, the intellectual property claims against it have increased (Apple 2011). Technology companies frequently enter into the litigation based on allegations of patent infringement. The litigation is usually costly and time-consuming which drastically negatively affects the companys operation.

Annotated bibliogrpahy Kane, Yukari , and Cecilie Rohwedder" Apple Strives for Global Markets." Wall Street Journal. online.wsj.com/article/SB10001424052748703302604575294530119152528.html+&cd=1&hl=e n&ct=clnk&gl=us (accessed February 29, 2012). This article talks about Apple's market development overseas. The competition Apple faces in foreign market and its position in these markets.It mentioned that more than half of Apple's revenue are generated in these regions. "Apple Retail Store - Store List." Apple. http://www.apple.com/retail/storelist/ The page lists all the Apple stores operated worldwide. It shows that Apple current has more than 300 retail stores worldwide. "TR50 2012 - Technology Review." Technology Review: The Authority on the Future of Technology. http://www.technologyreview.com/tr50/2012/. (accessed February 29, 2012). This article listed the 50 most innovative companies in 2012. The article explained some of the criterias that are taken into account when ranking these companies. Apple is listed as one of the 50 most innovative companies. Apple. Annual Report. California: Apple Inc., 2011. Print. Apples annual report talks about its financial performance in the year of 2011. In the report, I was able to find the companys sales figure and cash reserves. The report also talks about some of the companys risks including its reliance on outsourcing and patent litigation.