3.

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3.1 Analysis of Apple’s Vision

Apple’s vision:

“We believe that we are on the face of the earth to make great products and that’s not
changing. We are constantly focusing on innovating. We believe in the simple not the
complex. We believe that we need to own and control the primary technologies behind the
products that we make and participate only in markets where we can make a significant
contribution. We believe in saying no to thousands of projects, so that we can really focus on
the few that are truly important and meaningful to us. We believe in deep collaboration and
cross-pollination of our groups, which allow us to innovate in a way that others cannot. And
frankly, we don’t settle for anything less than excellence in every group in the company, and
we have the self-honesty to admit when we’re wrong and the courage to change. And I think
regardless of who is in what job those values are so embedded in this company that Apple
will do extremely well.”

Characteristics of Effective Vision Analysis

Statement
1. Involve all members of the The words “we” in every sentence proven
organization that all Apple’s worker has been involved
within the company’s operation from the
beginning until to end user.
2. Help them feel they are part of the The phrase “we” emphasized that Apple
organization ensure that every member is contributing
equally as excellence as they acquired for
the company successful.
3. The organization’s capabilities The phrase “simplicity in place of
and image of itself. complexity”, “make great products”, “where
we can make a significant contribution” and
“constantly focusing on innovating” proved
that Apple emphasized on its capabilities
and image of the company to bring out to the
market. The company always ensure its
high-quality standard on top level amongst
the competitors.
 4. Company guide and powerful The phrase “We believe that we are on the
motivator face of the earth to make great products and
that’s not changing”, we have the self-
honesty to admit when we’re wrong and the
courage to change” and “I think regardless of
who is in what job those values are so
embedded in this company that Apple will do
extremely well” indicates that Apple planted
all these deep terms to show that the
company is being guided and have powerful
motivator so it can grow further.
5. Aligned with core values of both The phrase “I think regardless of who is in
the individual and company what job those values are so embedded in
this company that Apple will do extremely
well.” explained that Apple’s vision aligned
with core values of both the individual and
company since Apple will valued all the hard
works by their workers to use in achieving its
goals and mission.
6. Specific vision with clear and The Apple’s vision is clearly well-made
powerful agenda because it captured the company’s
aspiration and strategic direction which is
very important so that the company is on the
right track.
7. Simple, understandable and Apple’s vision is quite long but easy to
shared by everyone in the understand and shared by everyone in the
organization organization, be sufficiently clear and
concise that everyone in the organization
understands it.

In conclusion, all seven criteria have been fulfilled from Apple. Therefore, we can conclude
that this is a good vision statement.
3.2 Analysis of Apple’s Mission Using 9 Components.

Apple’s Mission:

“Apple designs Macs, the best personal computers in the world, along with OS X, iLife,
iWork and professional software. Apple the best personal computers with its iPods and
iTunes online store. Apple has reinvented the mobile phone with its revolutionary iPhone and
App store, and is defining the future of mobile media and computing devices with iPad.”

Below are the table of analysation on nine components in Apple’s Mission:

No Mission Components Analysis

1. Customers Not stated
o Who are the firm’s
customer?
2. Products or Services o “Apple designs Macs, the best personal
o What are the firm’s computers in the world, along with OS X, iLife,
major products and iWork and professional software”
services? o “leads the digital music revolution with its iPods
and iTunes online store.”
o “has reinvented the mobile phone with its
revolutionary iPhone and App store.”
o “defining the future of mobile media and
computing devices with iPad.”
: Apple has mentioned that the company is focusing on
innovating product along with providing the best
services for the user.

3. Markets o “in the world”

o Geographically, : Apple has successfully managed to cater the market
where does the around the globe.
firm compete?
4. Technology o designs Macs, the best personal computers in
o Is the firm using the world, along with OS X, iLife, iWork and
the latest professional software.
technology? o leads the digital music revolution.
o has reinvented the mobile phone with its
revolutionary iPhone.
 o defining the future of mobile media and
computing devices.
: Apple use all the latest technology to produce their
product.
5. Concern for survival, o defining the future of mobile media
growth and profitability : Apple is committed to growth when they mentioned
o Is the firm “defining future of mobile media” as they want to be the
committed to leader
growth and
financial
soundness?
6. Philosophy Not stated
o What is the basic
belief, values,
aspirations and
ethical priorities of
the firm?
7. Self-concept o has reinvented the mobile phone with its
o What is the firm’s revolutionary iPhone
distinctive o Apple designs Macs, the best personal
competence or computers in the world, along with OS X, iLife,
major competitive iWork and professional software
advantage? : The distinctive competence and major competitive
advantage on Apple is that the company develop its
own system to work on their product like iOS, iTunes,
App Store and more.

8. Concern for public image Not stated

o Is the firm
responsive to
social, community
and environmental
concerns?
9. Concern for employees Not stated
 o Are employees a
valuable assets of
the firm?

in conclusion, four out of nine components have been fulfilled. Thus, this is an above average
mission statement. The top management need to be advised to reformulate the mission all
over again in order to get a better mission in future use.
Competitive Advantage/ Major Str engths of the company (SWOT MATRIX)

STRENGTHS WEAKNESSESS
S1 Strong brand equity W1 Selling product with
higher prices
S2 High R & D W2 Short products life

TOWS MATRIX
S3 High profit Margins W3 Weak relationship with
Intel and Microsoft

S4 Great Marketing W4 Lack of employees

concern on conflicts occurs
S5 Have the most valuable W5 Open to hackers and
and strongest brand and software pirates
customer loyalty

OPPORTUNITIES SO STRATEGIES WO STRATEGIES

O1 Distribution network S1, O1 Increase brand equity W2, O5 Advertise older
expansion by expanding distribution remaining products to less
network into cheaper product developed countries at a
cheaper cost to reduce
inventory
O2 Rising demand for tablets S2, O2 Use R&D to develop W6, O4 Promote the business
and smartphones new products lines to meet the safety of having a worm
rising demand and virus free computer by
using Mac

O3 Formation of strategics S5, O6 Continue to W3, O7 Growth opportunities

line in terms of goals, vision, aggressively develop mobile in growing mobile system in
mission. apps market market
O4 Accessory potential

O5 Demand for mobile

communication

O6 Protect iP’s value

THREATS ST STRATEGIES WTS STRATEGIES

T1 Aggresive competition S2, T3 Use strong R&D to W4, T4, S2 Recycle old
deveop new technology and outdate products parts for use
rising labour costs in new products
T2 Imitation of Apple S4, T5 Use marketing skills to W3, T2, S3 Concenrate on
products promote an environmentally software protection to combat
friendly practise hackers and pirates to increase
competitiveness
T3 Rising labor costs S5, T6 Use marketing skills W7, T6 Train employees on
and customer loyalty to how to immediately respond
combat scandal to legal issue and scandals to
prevent customer loss.

T4 Loss of innovation
T5 New environmental
regulations

T6 Tax scandals
3.6 Strategic Issues of the company
Functional level strategies
a) Human resource

https://www.channelnews.com.au/apple-admits-to-using-child-labour-to-build-iphone-x/

According to David Richards, Apple has finally come clean and admitted that its biggest
manufacturing partner is employing school kids for up to 11 hours a day to make their ultra-
expensive iPhone X. Almost 1,200 units iPhone X was made by one students. The richest tech
company in the world was exposed after it was discovered that school kids on so called ‘work
experience’ were being forced to work overtime in its Chinese factory run by Foxconn. Foxcom
factory has brought on 3,000 high school student to assemble the red hot smartphones as it
works to make up ground following severe production. The students, who range in age from
17 to 19 were being force by their school to work at least three months. The reason they hired
student because the company want to give a chance and gain work experience as graduation
requirement. In a statement issued by Apple last night the Company said “We discovered
instances of student interns working overtime at a supplier facility in China. We’ve confirmed
the students worked voluntarily, were compensated and provided benefits, but they should not
have been allowed to work overtime,” Apple said in a statement. Initially the Children said that
they were not paid.

Apple and Foxcom have been accused of poor labour practice in the past. Meanwhile labour
rights groups have previously critized Apple and Foxcom for excessive overtime, hiring
underage workers and failing to provide health insurance. Since 2012 Apple says it has reduced
the number of underage workers in its extended supply chain, which includes locations where
rare earth minerals are mined for use in the smartphones.

b) Marketing https://www.ukessays.com/essays/marketing/apple-inc-strategic-challenges-
and-changes-marketing-essay.php
Founded in 1976, APPLE built its early reputation on innovative personal computers that were
particularly easy for customer to use and as a result were priced higher than those of
competitors. Apple remained a full line computer manufacturer from that time, supplying both
the hardware and software. Apple was continued to develop various innovative computer and
related products. Basically, APPLE is high price policy for its products like iBook had trouble
competing in the personal computer market place. In the year 2000, APPLE identified a new
corporate strategy to exploit the growing worldwide market in personal electronic devices such
as CD players, MP3 players, digital camera and etc. It would launch its own APPLE version
of these products to add high value, user friendly software. Resulting products included iMovie
for digital cameras iDVD for DVD players.

Apples main strategy is there appeal to their customers. What you find in general with many
of their products more better looking than the competitions. One thing we can see is Apple
building on the popularity of the iPod. It appeals to the Mass market. Now appeal less as a
computer company and more of a electronics company and seem more user-friendly.

Apple have a differentiation strategy. Apple products are known to have a unique appeal, with
its sleek designs a usability. Due to this it gets a lot of attention from consumers and the media.
Without much advertising or marketing on their part. They give something new and unique to
talk about which everybody gets pulled in to.

With the iPod there not only selling a mp3 player, there selling a social chic. Everybody has
one and everybody wants one. The iPod appeals to the mass market, everyone is a potential
customer. Young or old. They have music, literature and podcasts all available for the iPod
owners. The simplicity and sleek design are what attracts people. Although the latest ones (the
touch) are expensive and may be aimed at higher and older earners.

c) Finance https://businessays.net/apple-inc-strategic-issues/
https://elpais.com/elpais/2013/04/19/inenglish/1366396093_838664.html
The problem of Apple stemmed in the period 1985-1997 when Steve Jobs was not a part of
company. Apple had a small market share of Pcs its means gross profit were decreasing and
the company CEO high turnover. Its share price was low around USD 3. It was making losses
and was on the verge of bankruptcy. Moreover its work environment had become increasingly
relaxed and it was losing its value of creativity and innovation. Mainly they lack of leadership
and innovative culture. Moreover some decisions taken by the management were not in the
best interest of the company. For example during the tenure of one CEO, APPLE tried to movie
into the low priced market and during the time of a later on, the same policy was reversed.

According to El Pais, Apple have lower prices mean lower profits. Situation in India, there are
selling iPhone 4 for 275 euros. Entering into some sort of coupon competition (Samsung has
struck back with a similar scheme) would have been simply unthinkable back in Jobs’ time.
Apple’s slogan “think different” implied paying a premium for an exclusive product. The
firm’s financial health was based on this premise. There is no other company that earns so
much with so little: upgrading from a 16-gigabyte iPad to a 32-gigabyte one, which costs Apple
17 dollars more, sets consumers back an additional 100 dollars. For every iPhone it sells,
Apple’s profit margin is as much as 53 percent, while an iPad Mini “only” brings in a 40 percent
margin, a figure that remains unrivalled in the market. Given these numbers, there is a logical
resistance to joining any kind of price war. But right now there is no choice. Everything seems
to indicate (Apple never talks about its projects) that the company will launch a cheap iPhone
for Asia. The consulting firm Piper Jaffray holds that 75 million units will be sold in 2014...as
long as the price remains below 300 dollars.

3.3 ANALYSIS OF STAKEHOLDERS – WHO ARE THE PRIMARY AND

SECONDARY STAKEHOLDERS
 Apple’s Incorporated has various stakeholder groups that help the organization grow

and develop. The primary stakeholders for the company include the company’s employees, the

consumers, investors, suppliers, and distributors. Each of these stakeholders has an influence

on the organization's financial performance. The primary stakeholders have a direct influence

on the company’s financial performance as they carry out the company’s activities in the

process of production. Thus, their motivation can determine the company’s financial

performance. Investors have an influence too on the financial performance of a company as

they provide financial resources to the company for investment purposes and, also, for running

the business efficiently. Secondary stakeholders have an indirect influence on the financial

performance of the company. Secondary stakeholders include the media and pressure groups,

competitors, the law regulator, banks, clients, competitor and local government. Therefore,

these various stakeholders influence the performance of the company through improving the

brand image and value, for example, the consumer's perception of the brand influences the

sales of the product.

Additionally, stakeholders help in the reduction of potential liabilities for the company

through the outsourcing of duties to suppliers and distributors. Moreover, stakeholders like the

employees in human resource and procurement department assist in resource management,

which helps in the financial performance of the company by the management of employees

and the raw materials from the suppliers. The stakeholders such as the law regulators have an

influence on the company’s financial performance. For instance, the laws can be changed and

affect the business negatively to a point of closing the premises, for example, when the

company’s product has been prohibited or the taxation on its raw material increased

augmenting the cost of production. Also, the stakeholders assist in increasing the profitability

of the company through the increase in sales levels and cheaper supply of raw materials which

reduces the cost of production. The stakeholders also increase the market for the company
through referrals, loyalty to company products and also marketing, which improves the

financial performance of the company.

 i. PRIMARY STAKEHOLDERS

Primary stakeholders is individual or groups which have a direct interest in organization

as well as are engaged in economic transactions with the organization as it procedures its goods
and services. For example, an employer as a primary stakeholders contributes his skills and
knowledge in exchange for wages and benefit such as health care and retirement benefits

Timothy Donald Cook Chief Executive Officer & Director

Jeffrey E. Williams Chief Operating Officer

Luca Maestri Chief Financial Officer & Senior Vice President

Kevin M. Lynch Vice President-Technology

Kate Adams Secretary, Senior Vice President & General Counsel

Customers/Consumers Apple prioritizes customers as its top stakeholders in devising

corporate social responsibility strategies. This stakeholder group
is composed of individual and organizational buyers of Apple
products.
Apple’s Employees Employees are the second-priority stakeholders in Apple’s
approach to corporate social responsibility. This stakeholder
group is composed of employees at Apple’s facilities. Employees
as a stakeholder group are important because they directly
determine Apple’s human resource capabilities to innovate and
develop profitable products.

Investors Investors are typically major stakeholders and determinants of

corporate social responsibility programs in businesses. In Apple’s
case, investors are interested in maximizing the returns on their
investments. The company effectively addresses this stakeholder
group through excellent financial performance.
Employees of Suppliers Workers in Apple’s supply chain are also significant
and Distributors considerations in the company’s corporate social responsibility
efforts. These workers are indirect stakeholders in Apple’s
business, but determine the firm’s corporate social
responsibilities. The main interest of this stakeholder group is
similar to the interests of Apple’s own employees, such as proper
compensation and job security
 BOARD OF DIRECTORS

 Timothy Donald Cook is an American business

executive and industrial engineer. Cook is the
chief executive officer of Apple Inc., and
previously served as the company's chief
operating officer under its cofounder Steve Jobs

Timothy Donald Cook  Following a 12-year career at IBM, Cook went

Chief Executive Officer & Director on to executive roles at Intelligent Electronics
and Compaq, before joining Apple in 1998. In
August 2011, Cook was named Apple's new
CEO, following the death of predecessor

 Luca Maestri is Apple’s senior vice president

and chief financial officer reporting to CEO Tim
Cook. As CFO, Luca oversees the accounting,
business support, financial planning and

Luca Maestri analysis, treasury, M&A, investor relations,

Chief Financial Officer & Senior Vice internal audit and tax functions at Apple. Luca
President
joined Apple in 2013 as vice president of
Finance and corporate controller, and has
worked closely with Apple’s senior leadership
since his arrival.
  Kevin M. Lynch is an American software
developer. He is currently the vice
president of technology at Apple Inc.,
joining in 2013 after working as the chief
technology officer of Adobe Systems.[1]
Lynch has been responsible for
developing the software of Apple's
smartwatch project, the Apple Watch, a
Kevin M. Lynch device he demonstrated at the September
Vice President
2014 Apple Launch Event.
Technology

 Katherine Adams is Apple’s general

counsel and senior vice president of
Legal and Global Security, reporting to
CEO Tim Cook. Kate serves on the
company’s executive team and oversees
all legal matters, including corporate
governance, intellectual property,
litigation and securities compliance,

Kate Adams global security and privacy. Kate joined

Secretary, Senior Vice President & General Apple from Honeywell in 2017, where

Counsel she worked for 14 years, most recently as

senior vice president and general
counsel. At Honeywell, Kate was in
charge of the organization’s global legal
strategy across more than 100 countries.
 ii. SECONDARY STAKEHOLDERS

Secondary stakeholders include individuals and group who are not engaged in a direct
economic transaction with the firm but are affected by or can affected its action. For example,
the government can affect the operations of an organization through the regulations and policies
that it implement.

Banks Barclays Standard bank, Standard bank of America, Citi Lender or

HSBC lender are the main financing businesses that can present with
desired mortgage to Finance for Apple MacBook.

A customer also known as a client, buyer, or purchaser is the

Clients recipient of a good, service, product, or idea, obtained from a seller,
vendor, or supplier for a monetary or other valuable consideration

Competitors Established in 1976, Apple has succeeded to become a dominant

competitor in the industry under the leadership of Steve Jobs.

Software: Windows, Android, Blackberry.

Laptops: Sony, Dell, HP, Toshiba, Acer, Asus.
Smartphones: Samsung, Blackberry, Nokia
Regulatory agencies Apple design the products and services according to the principle of
privacy by default and collect only the minimum amount of data
necessary to provide our users with a product or service. Apple has
a cross-functional approach to privacy governance. Privacy
governance covers all areas of the company and includes both
customer and employee data.
Media outlets Apple News provides the best coverage of current events, curated by
expert editors. Apple News is a mobile app and news aggregator
developed by Apple Inc., for its iOS, watchOS, and macOS
operating systems.
Local government State and Local Government employees can purchase select Apple
products and third-party solutions for themselves and their
immediate family members at a special price. Note, this program is
for personal use only and not intended for purchases using agency
funds.
3.4 INDUSTRY ANALYSIS USING PORTER’S FORCES MODEL

In an industry especially a huge industry it is important for a company to know where

they stand in the industry and against their competitors. There are many tools that company use
in order to determine their standings in the industry and determine their benchmark, and one
of them are by using the Porter’s Five Forces Model this model uses 5 factor or forces that can
determine how well the company is doing which includes threat of new entrant, bargaining
power of suppliers, bargaining power of buyers, substitute products and rivalry among
competitors. All these factors will be discussed in a table form below.

Porter’s Forces Model Level Description

Determinant
1. Threat of new entrants weak The economies of scale is fairly difficult to
achieve in the industry in which Apple Inc
operates. This makes it easier for those
producing large capacitates to have a cost
advantage. It also makes production costlier for
new entrants. This makes the threats of new
entrants a weaker force. The product
differentiation is strong within the industry,
where firms in the industry sell differentiated
products rather a standardised product.
Customers also look for differentiated products.
There is a strong emphasis on advertising and
customer services as well. All of these factors
make the threat of new entrants a weak force
within this industry.
2. Bargaining Power stronger The number of suppliers in the industry in which
of Suppliers
Apple Inc operates is a lot compared to the buyers.
This means that the suppliers have less control over
prices and this makes the bargaining power of
suppliers a weak force. The product that these
suppliers provide are fairly standardised, less
differentiated and have low switching costs. This
makes it easier for buyers like Apple Inc to switch
suppliers. This makes the bargaining power of
suppliers a weaker force. The suppliers do not
contend with other products within this industry.
This means that there are no other substitutes for the
product other than the ones that the suppliers
provide.

3. Bargaining Power Weak The number of suppliers in the industry in which

of Buyers Apple Inc operates is a lot more than the number of
firms producing the products. This means that the
buyers have a few firms to choose from, and
therefore, do not have much control over prices. This
makes the bargaining power of buyers a weaker force
within the industry. The product differentiation
within the industry is high, which means that the
buyers are not able to find alternative firms
producing a particular product. This difficulty in
switching makes the bargaining power of buyers a
weaker force within the industry. The income of the
buyers within the industry is low. This means that
there is pressure to purchase at low prices, making
the buyers more price sensitive.
4. Threat from weak There are very few substitutes available for the
Substitute Products products that are produced in the industry in
which Apple Inc operates. The very few
substitutes that are available are also produced by
low profit earning industries. This means that
there is no ceiling on the maximum profit that
firms can earn in the industry in which Apple Inc
operates. All of these factors make the threat of
substitute products a weaker force within the
industry. The very few substitutes available are
of high quality but are way more expensive.
Comparatively, firms producing within the
industry in which Apple Inc operates sell at a
lower price than substitutes, with adequate
quality. This means that buyers are less likely to
switch to substitute products.

5. Rivalry Among weak The number of competitors in the industry in

Existing Firms which Apple Inc operates are very few. Most of
these are also large in size. This means that firms
in the industry will not make moves without
being unnoticed. This makes the rivalry among
existing firms a weaker force within the industry.
The very few competitors have a large market
share. This means that these will engage in
competitive actions to gain position and become
market leaders. This makes the rivalry among
existing firms a stronger force within the
industry. The industry in which Apple Inc is
growing every year and is expected to continue
to do this for a few years ahead.
CONCLUSION INDUSTRY ANALYSIS USING PORTER’S FORCES MODEL

The global smartphone and tablet markets are subject to the moderate collective
strength of competitive forces. On one hand, the intensity of competition is reduced by
factors such as high barriers to entry, strong Strategic Analysis and Valuation of Apple
Inc. 40 brand identification and customer loyalties, the domination of a small number
of large device manufacturers as well as the low concentration of suppliers and buyers.
On the other hand, the analysis of the industry 5 forces revealed that industry dynamics
are not all favourable. Decelerating market growth, emerging Chinese manufacturers
of low-cost devices and falling ASPs markedly increase competition in the analysed
markets. In addition, over the medium term, it is expected that the market saturation
will spread from the developed to emerging markets resulting in a growing demand for
low-cost devices. As a result, competitive rivalry in the markets will further intensify
and adversely affect profitability of the market players