APPLE

By: Group 4

Case Facts
Apple was founded by Steve Jobs, Steve Wozniak, and Ronald
Wayne on April 1, 1976
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.

Largest publicly traded corporation in the world by market

capitalization
Apple became the first U.S. company to be valued at over $700
billion

 437 retail stores in fifteen countries

iTunes Store is the world's largest
music retailer.
Annual revenue in 2014 totaled
US$182 billion

STORY
From Blue Boxes to Apple
The Roller Coaster Begins
The Gap Years
Getting Apple Back on Track
The Bottom Line

Problem/ Key challenges

Competition and the pace of
technological change
Balancing stakeholders demands

 New competitors, low-priced rivals,

and potential substitute products all
threaten to reduce the perceived
value of Apple products and the
success of its strategy.
Apple manages a broader range of
products to a diverse customer base
and navigates more markets.

 Suite of products is not based on

internally developed hardware and
software, but depends upon the
ability to secure media content.

SWOT Analysis
Strength
iPod- the profit machine(largest market share
(70%) of the digital music market )
Strategic alliances through marketing partnerships.
Marketing competence
Products for range of applications.
Responsiveness to customer feedback.
Strong financial performance.
Strong brand image.

Weaknesses
Incompatible software
Low Profit per song is low
1% share of mobile phone market.
Unpopular Apple TV features.
Supplier Relationships.

Opportunities
International growth and expansion
Improve compatibility
Consumer demand for "custom"
features
Web technology and marketing
Licensing brand name with accessory
manufacturers

 Threats
Very large competitors with good reputations
and extensive resources.
Inability to please more diverse customer
base.
Technology and entertainment industries are
rapidly changing.
GotVoices Visual Voicemail and is not limited
to cell phone devices.
New entrants from cross-industry integration.

Porters 5 forces

Competitive Rivalry: high

New Entrants: high
Substitutes: high
Buyers: Medium
Suppliers: Low

Competitive Rivalry
Price-cut to gain market share by
competitors.
Key competitive factors- product
features, relative price/performance,
product quality, design innovation,
marketing and distribution capability,
service and support.

New Entrants
Highly attractive market and usually low barrier
to entry
Main barrier to entry- capital.
Large established consumer electronics
companies or on-line are enriched with
resources.
With speed of information about new
technologies- start-ups also aggressively try to
enter.
service provider entering potentially harmful
agreements with Apple's competitors

Substitutes
New categories are constantly
evolving

Buyers
Enjoys price premium because of
perceived value and marketing
genius.
Created a niche.

Suppliers
Enough control kept by Apple to provide
the quality.
Not dependent on few suppliers, maintain
a heathy network of suppliers.
Samsung
Philips
Texas Instruments
Linear Technology
Others

Competitive Analysis: Business

Model

Cost
Differentiation
Leadership
Integrat
ed
Focused
Focused Cost
Differentiation
Leadership

Recommendation
Continually invest in R&D to stay
ahead and lead product and
technology discoveries.
Maintain and upgrade design appeal
Pay attention to the needs and
objectives of strategic allies.
Continue the expansion of Apple
stores

 Focus on supplier relationships.

Emphasize the integrated system in
advertisements.
Use its 70% share in digital music
industry as a cash cow

Apple Now
Apples iPhone revenue was more
than three times Googles total
revenue in the third quarter of 2014,
$16.5 billion.
Apple has $178 billion in cash, more
than enough to buy IBM at its current
market cap of $152.3 billion.
In fact, Apple could buy Ford, GM,
and Tesla and still have $41.3 billion
left over.