Mission Statement

Apple is committed to bringing the best

personal computing experience to students,
educators, creative professionals and
consumers globally through innovative
hardware, software and Internet offerings.

Source: Apple
 Apple Inc.

Frontrunner in the PC revolution

Transformed PC industry with 1st Mac
Expansion in consumer technology
Continued innovation in tech industry
 Key Dates

1976: Steve Jobs and Steve Wozniak

founded Apple Computer, Inc.

1980: Apple converts to public ownership.

1982: Apple becomes first personal
computer company to reach $1 billion in
annual sales.

Source: Apple
 Key Dates

1985: John Sculley assumes CEO role

1997: Steve Jobs is named interim CEO
1998: The all-in-one iMac is released
2000: Jobs as CEO, more tightly focused
Apple, Inc.

Source: Apple
 Today

Apple has 36,800 employees as of 2009

Net profit increased from 14.6% in 2007 to
15.6% in 2009
EPS doubled since 2007 to $6.29
Positive future financial expectations
Apple Stock 1 Year
 Opportunity Statement

Apple Inc. currently operates in highly

competitive and highly technological
driven consumer electronics / computer
industries. There exists opportunities to
further leverage the intellectual capital and
brand image along with new digital
business strategies to create new sources
of sustainable competitive advantage
within Apple Inc.
 Significance to Leadership

Discovery of untapped resources

- More dedicated and loyal customer
base
- Higher profit margins
- New sources of Sustainable Competitive
Advantage
 Expected Outcomes

Greater customer share

Increase in profit margins
Sustainable competitive advantage
 Research Methodology

Secondary Research
Quality Research
- Environmental Scanning & Monitoring
- Peer Reviewed Journal Articles
 Situational Analysis
Internal Factors

Leadership | Corporate Culture

Operations | Marketing | Finance | HRM
Situational Analysis
Internal Factors

Leadership
 Leadership

Steve Jobs
Co-Founder/CEO/Director
o1976-1985/1996-Present
College dropout
Perfectionist
Founded company with
Steve Wozniak
Source: Reuters
 Leadership

Peter Oppenheimer
CFO/Senior VP
o1996 - Present
Former CFO of
Automatic Data
Processing, Inc. (ADP)

IT Consulting firm
Source: Reuters
 Leadership

Timothy Cook
COO
o1998 - Present
Previously VP
Corporate Materials for
Compaq Computer
Corp.
COO for Intelligent
Electronics
Source: Reuters
Situational Analysis
Internal Factors

Corporate Culture
 Corporate Culture

Work hard, play hard mentality

Worlds Most Admired Company

Source: CNN: Money; ICMRIndia; Apple Insider

Situational Analysis
Internal Factors

Operations
 Organizational Structure

Non-traditional
- Team and department divisions
- Very informal and non-hierarchical
Jobs still very much in control

Source: The Wall Street Journal; ICMRIndia; Apple Insider

 Operations

Corporate headquarters in Cupertino, CA

Most manufacturing in China
Supplier code of conduct
More than 200 stores
worldwide

Source: Apple
 Operations

Source: Apple
 Sales Breakdown

2009 Sales
$ Million % of Total
U.S. 19,870 54
Other Countries 16,667 46
Total 36,537 100

Source: Apple
 Sales Breakdown
2009 Sales by Operating Segment
$ Million % of Total
Americas 16,142 44
Europe 9,365 26
Retail 6,574 18
Japan 1,831 5
Other 2,625 7
Total 36,537 100

Source: Apple
Situational Analysis
Internal Factors

Marketing
 Marketing

Four Ps
1. Product
2. Price
3. Place
4. Promotion
 Marketing - Product

Apple Incs product strategy is:

Supply superior ease-to-use
Seamless integration
Innovative industrial design

Source: Apple
 Marketing - Product

Two main types of products:

Hardware
oPersonal computers
oPortable devices
Software
oiTunes
oFinal Cut Pro
oLogic Studio
Source: Apple
 Marketing - Price

Value based pricing model

Variable pricing for iTunes
Fixed pricing over all
We dont know how to make a $500
computer thats not a piece of
junk
- Steve Jobs
Source: Apple
 Marketing - Place

Distribution:
Sales Force
Third party wholesale

Source: Apple
 Marketing - Place

Distribution Channels:
Resellers
Large distribution
On line stores
No Franchises

Source: Apple
 Marketing - Promotion

Promotional techniques
Test drive a Mac 1983
iPod as contemporary art
Celebrity involvement

Source: Apple
Situational Analysis
Internal Factors

Financial Analysis
 Financial News

April 20, 2010: Apple announced fiscal 2010 Q2

results:
- Revenue of $13.5 billion
- Quarterly profits of $3.07 billion
Stock price $252.36/share
Holds over $40 billion of cash reserves

Source: World of Apple; BusinessWeek; Hoovers

 Short-Term Solvency Ratio
3
Apple
2.5 Microsoft
2 Dell

1.5

0.5

0
2006 2007 2008 2009
Current Assets
Current Ratio =
Current Liabilities
Source: Hoovers
 Short-Term Solvency Ratio
3
Apple
2.5 Microsoft
Dell
2

1.5

0.5

0
2006 2007 2008 2009

Quick Ratio = Current Assets - Inventories

Current Liabilities
Source: Hoovers
 Long-Term Solvency Ratio
7 Apple
Microsoft
6
Dell
5
4
3
2
1
0
2006 2007 2008 2009

Total Liabilities
Debt to Equity Ratio =
Shareholders Equity
Source: Hoovers
 Efficiency Ratio
4.5
Apple
4
Microsoft
3.5
Dell
3
2.5
2
1.5
1
0.5
0
2006 2007 2008 2009
Net Credit Sales
Receivables Turnover =
Avg. Accounts
Source: Hoovers
Receivable
 Profitability vs. Revenue

Source: Hoovers; Argus Research Company

 Financial Summary

Strong Ratios

Positive predictions for financial growth

Profit margins leveling out

Situational Analysis
Internal Factors

Human Resource
Management
Human Resource Management

1. Recruiting
2. Hiring
3. Training
4. Retaining
 HRM
Recruiting

Online
Universities
Internships
Apple Store Leader Program

Source: Apple
 HRM
Hiring

Online application
Interview Process
Equal Employment Opportunity
Affirmative Action

Source: Apple
 HRM
Training

New Technology
Career Advancement
Customers arent the only ones who get to discover new
things at the Apple Retail Store. Every location provides
regular training, which counts as work time, to keep you up
to date on the latest Apple and third-party products. You
can also get training to help you move ahead as a Genius,
Creative, or Manager or to transition to one of those
tracks from your current position. - Apple
Source: Apple
 HRM
Retaining

Fun, innovative work environment

Possibility for career advancement
Great Benefits
oHealth and Life Insurance

Source: Apple
 HRM
Retaining

Tuition Assistance
Product Discounts
Commuter Programs
Working at Apple is a whole different thing.
Because whatever you do here, you play a part in
creating some of the best-loved technology on the
planet. And in helping people discover all the
amazing things they can do with it. You could call it
work, or you could call it a mission. We call it a
blast. - Apple
Source: Apple
 Situational Analysis
External Factors

Competition | Technology | Customers

Macro-economic Factors
Situational Analysis
External Factors

Competition
 Direct Competition

A product or brand that competes in

the same industry or product category
Hewlett Packard
Dell
IBM

Source: Hewlett-Packard; Dell; IBM

 Direct Competition

Microsoft
The employee empowerment
At Microsoft, we believe that diversity
enriches our performance and products
anddifferences become increasingly
important.

Source: Microsoft
 Indirect Competition

Product that provides an alternative

activity that one might choose over using
Apple
Video Games
Television
Digital Video Disc (DVD)
Situational Analysis
External Factors

Technology
 Technology

Industry Trends
Tablet PC
Internet capabilities
Battery life
Compatibility
Situational Analysis
External Factors

Customers
 Customers

Volatile
Lack of perceived differentiation
FUD (Fear, Uncertainty, and Doubt)
Discrepancy with early & late adopters
Situational Analysis
External Factors

Macroeconomic
Factors
 Macroeconomic Factors

Moores Law
Current economic climate
Natural disasters

Source: Intel; Businessweek

SWOT Analysis
 Strengths

Strong cash base

Intellectual capital
Technology leader
Brand image
Charismatic leadership
iTunes Store
 Weaknesses

Lower profit margins

Dividends rarely paid
Lack of succession planning
Presence in business arena
Underdeveloped customer relationships
 Opportunities

Digital business strategies

Customized user experience
Strengthen brand
Expand strategic alliance
Global expansion
 Threats

Technology
Volatile customers
Competition
Google
Sources of Competitive
Advantage
Sustainable Competitive Advantage

Advantage the corporation has over their

competition that is unique and valuable
and not easily duplicated.
Sustainable Competitive Advantage

Digital business strategy

Strategic alliance
Intellectual Capital
Leadership Recommendations

Viable Alternatives | Minor Recommendation

Major Recommendation | Future Study
Spiritual Implications
Leadership Recommendations

Viable Alternatives
 Viable Alternatives

Customer reward program

Innovation focus
Sales promotion / discounts
Leadership Recommendations

Minor
Recommendations
 Minor Recommendations

Global expansion
Open more stores
Succession planning
Operational efficiency
Leadership Recommendations

Major
Recommendations
 Recommendation

iApple
-Creates database
for customers
-Personal
homepage on
apple.com
 Recommendation

iApple
Tracks purchases
oiTunes
oApp store
oApple store
oAuthorized re-sellers
Product recommendations
 Recommendation

iApple
- Social networking
oInteract with other customers
oCustomer service portal
iPhone / iPod / iPad App
Recommendation
 Recommendation

iPhone Initiative
Open phones to every carrier
oApple experience for all
Connected to iApple
- Every user now in database
oCustomer profile
 Recommendation

iPhone Initiative
Growing knowledge of each customer
oIncreased customer share
- Paying for apps/music
- Automatic sync with only Mac
- Offer iPhone for free
oLifetime value
 Recommendation

AppleU
Rebranding of one-to-one program
Product training with Mac Specialist
Utilize intellectual capital
Educate customers about any Apple
product
Increased customer share
Leadership Recommendations

Future Study
 Future Study

Pursuing stronger strategic alliances with

software companies
Taking Apple into the business world
Greater shareholder focus
Social media integration
Leadership Recommendations

Spiritual Implications
 Spiritual Implications

1. Socially Ethical Practices

2. Diversity and Equal Employment
3. Environmentally Conscience
 Spiritual Implications

Socially ethical practices

Titus 2:7-8
oShow yourself in all respects to be a
model of good works, and in your
teaching show integrity, dignity, and
sound speech that cannot be
condemned, so that an opponent may
be put to shame, having nothing evil
to say about us. (ESV)
 Spiritual Implications

Diversity & Equal Employment

Acts 10:34
oSo Peter opened his mouth and said:
truly I understand that God shows no
partiality (ESV)
 Spiritual Implications

Environmentally Conscience
Psalm 115:15-16
oMay you be blessed by the Lord, who
made heaven and earth! The heavens
are the Lords heavens, but the earth
he has given to the children of man
(ESV)
 Final Questions

Would we work for this company?

Would we invest in this company?

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Argus Research., www.argusresearchcompany.com/appleinc

Business week., www.businessweek.com

Question Answer