CLCC INSTITUTE OF COMPUTER, ARTS AND TECHNOLOGY

J.P. Rizal St., Lalud, Calapan City, Oriental Mindoro

College of Business Administration

Case Study
Of
Apple Inc.
www.apple.com

Presented to
Ms. Jane Marasigan

In Partial Fulfillment of the

Course Requirements in the subject
Risk Management

By:

Bryan D. Villarez
Nina V. Catapang

February 26, 2020

 Apple's motto, "Think Differently," is a concept that the company does very well by
creating innovative products that continue to define the world of computer design. Other
computer manufacturers have attempted for decades to replicate the iconoclastic appeal of the
Apple design. None have succeeded in the manner of Apple. When Steve Jobs assumed the post
of CEO in 1998, he re-revolutionized the entire company. Apple introduced the iMac and iBook
product lines for the more basic computer buyer’s and the PowerBook and G series computers
for the advanced purchasers. Apple continues to forge ahead in design with the introduction of
the iPod digital music player and the iTunes Web site for the sale and download of music.
Among giant rival firms, such as IBM, Apple is on the forefront of a revolution of technology,
integrating music, images, and animation.

INTRODUCTION

Apple Inc. is the most famous name in the technology sector, it is an innovative
electronics manufacturer, which is giving benefits to the consumers and to the suppliers, and the
company is using successful strategies in the market so the best results could be achieved. The
company is successful because it efficiently establishes the target market, with the help of
marketing mix and giving value to its customer’s company has become successful in the market.

From years Apple is maintaining its standard as it has the ability to recognize the need of
the dynamic strategies, with the changing of the technology and environment, a company is able
to maintain its standards and trying to reach the customer demands, through doing innovation in
the products Apple is meeting the customer demands. Apple is offering cutting-edge products,
which are best in the market and better than the competitors are. The products are at the top
because a company is continuing towards growth and enhancing the customers’ life by
expanding their product line. With the help of the strategies, Apple is fulfilling the demands of
the customers, which are cohesive. Apple Inc. has loyal customers because the company is bale
to satisfy their needs through using various sets of the strategies.

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 I. EXECUTIVE SUMMARY / OVERVIEW

Steve Jobs is a founder of Apple and incorporated the company 1976. The name of the
company was Apple computer but in 2007, a company was renamed as Apple INC. Apple is an
innovative computer with the communication solutions; Tim Cook is the present CEO of the
company, as in 2011, Steve Jobs died. Steven Wozniak and Steve jobs produced the Apple I, the
first Apple computer in 1967. Apple Inc. has strategically made it’s headquartered in California,
Cupertino, the part of the infamous valley, which is known for the high technology based
companies, moreover, they gave the skilled resource output. Apple has made its segment on the
regional basis as soon as it realizes that it can provide value to the customers across the world.
The company products are according to the demands of the customers; Apple has a wide range of
application and products (Mittan, 2010). The company is meeting the consumer needs in
multiple ways, as the company did researchers on the demands, make the products, so the
customer should be brand loyal, and gain confidence. Apple products are designed so they can
meet all communication needs, the products of Apple are Laptop, on-the-go tablets, operating
system, personal computer, online store, and accessories etc.

II. OBJECTIVES AND RESEARCH METHODOLOGY

The Purpose of the paper is to study the impact of corporate strategy, governance and
ethics on the achievement of Apple’s Goals. With a view to conduct the research for the paper,
research methodology is the most important aspect. For the purpose of the study, data was
collected from secondary sources. This study heavily banked on secondary data and Secondary
data were collected using various published and unpublished sources, different case studies on
Apple. For achieving the objectives, we analyses the external as well as internal environment of
Apple Inc. with the help of SWOT analysis, PESTEL analysis and Porter’s five forces analysis.

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 III. RISK RESOURCES

Resources: Tangible resources are tangible assets that can be observed and quantified.
Intangible resources include assets that are rooted deeply in the firm’s history.

Capabilities: Combination of tangible or intangible resources.

Core Competencies: Serve as a source of competitive advantage for a firm over its rival

Central Problem / Key Issues

The case study analysis is based on Apple Inc.’s products and its marketing abilities to
satisfy loyal consumers. It discusses how Apple has been able to keep producing competitive and
innovative products, in keeping with the changing demand and tastes of consumers. Apple Inc. is
a leading innovator producing designs with no substitutes in the market. Some of these “product
innovations include the iPod, iMac, iPhone, and iPad” (Kotler & Keller, 2012). However, the
company has to play hard to remain competitive through the manufacture and the marketing of
revolutionary products.

IV. RISK MANAGEMENT BUSINESS ENVIRONMENT

CORPORATE STRATEGY, GOVERNANCE, AND ETHICS AND THEIR IMPACT ON

THE ACHIEVEMENT OF APPLE’S GOALS

Environmental Analysis

Apple’s key internal strengths and weaknesses were examined in the context of its
industry. External factors are those that are beyond the control of company. SWOT, PEST, and
Porter’s Five Forces Analysis were used in order to identify the strengths and weaknesses of
Apple and the available threats and opportunities in the competitive market, while taking into
consideration various political, economic, social, and technological factors.

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SWOT Analysis - Internal Environment

A SWOT analysis summarizes the key issues from the business environment and the
strategic capability of an organization that are most likely to impact on strategy development
(Johnson, Scholes, and Whittington 2008).Thus, strengths and weaknesses are part of business
internal environment while opportunities and threats are from external business environment
(Fred R. David).

 Strengths

Since diversifying beyond personal computers, Apple has enjoyed terrific sales growth
and has wisely managed its cash flow which resulted as No. 1 brand at Forbes with a total capital
of $416.62 billion.

Strength analysis showed that Apple is endorsed by a large brand; company has a strong
recognition because of its aggressive nature of founder towards creativity and innovation
(Schmeiser 2008). As the existence of innovative culture it had increased investment in R&D i.e.
$4.5 billion in 2013, $3.4 billion in 2012 and $2.4 billion in 2011(Apple’s 10K).It also
had elevated sales as of practiced and skilled sales personals(Apple’s 10K).It had
positioned its direct sales branches at high traffic locations which contributes towards
strengthen company’s revenues(Apple’s 10K).It had significantly controlled its supply chain and
publishes its supplier codes of conduct report annually which further enhances brand recognition.
Further strength of Apple is implausible trade name trustworthiness; Customer can stand whole
freezing night (Guenette, 2012) to be the first one to get new Iphone. Philosophy of ease to use is
also plus point for company. Every product that they produced is user friendly and easy to
understand.

 Weaknesses

To be world’s biggest information technology company brings higher responsibilities as

well. Apple like other entities is also facing problems in some of its areas.

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 Based on internal analysis of Apple, it was found that it had a strong strategy for
promotion of direct sales channels but unfortunately they are still lacking behind. As they only
had direct sales locations in just 13 countries (Apple 10-K). In addition, one of the weak area is
the Apple’s dependency on iPhone and iPod, as their contribution towards overall sales is
dominant (Biddle 2014).As well, it’s hardware products are only supported with iOS,
which makes it difficult to use, whereas competitors’ products are android which doesn’t
have such issues. It is also researched that its products are luxury products as carries a premium
price. Ordinary man would prefer to spend dollars on more productive places rather than to buy
(Nair 2014). Since Apple had a well-recognized manager, Steve Jobs whose death is a big loss
for company. More important there is a change of philosophy for Iphone between Cooks and
Jobs. Another weakness in Apple is the declining sales growth causing diminishing market share
(Apple 10-K).

V. STRATEGIC ANALYSIS

PEST is a widely used tool to analyze the Political, Economic, Socio- Cultural and
Technological changes in business environment.

PEST analysis is used not only to understand the external environment, but also to
adapt business strategies for achieving business goals.

PESTLE Analysis To make the analysis more comprehensive, legal and

environment factors have been added which makes PEST, PEST + L (Legal) E
(Environment) =PESTLE Analysis.

It adds two more different aspects to see the whole environment and keep a track
while achieving certain goals.

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Political Factors Economical Factors

 Political pressure on the company  Impact of recession

 Limitations on import  Exchange Rates

 Political insurgence in different  Cost of Labour

countries
 Recent trends in stock market
 Stability of Government
 Rates of growth
 Company’s approach on recent issues
 Rate of Inflation

 Job Opportunities

Socio-Cultural Factors Technological Factors

 High-Status lifestyle  Entry to Chinese Market

 Buying Habits  Product life cycle

 Brands Acquisition  Screen Size

 Age Distribution  Tough competition

 Standard of Education  Cyber Crimes

 Consumer mind-set  Restricted Customer Base

 Attention to research and

Development

Legal Factors Environmental Factors

 Increasing privacy regulations  Air and Water

(telecommunications regulations)
 Pollution Population
 Intellectual property Law
 Greenhouse Effect
 Employment Law
 Global Warming
 Breach of Law
 Increased electricity cost
 Consumer Law
 Transoceanic shipping

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Political factors

Apple faced an awkward situation when suicide cases were registered against its supplier.
This company was held responsible for making its employees work for longer hours.

Owing to the political insurgency in China, Apple has faced increased labour and
manufacturing cost.

There is always a risk of terror in its base country, America and the countries that it
serves.

Economical Factors

Apple’s economic growth touched a new low due to the global recession in 2013.changes
implemented in Europe’s economy have affected apple directly. It led the company to 16% less
growth in third quarter of 2012.

The company had to suffer when the inflation rate was increased because it possessed a large
amount of cash.

Social Factors

Apple has become simply a symbol of social status due to its extremely high prices.

Owing to the growth in consumer spending in third world countries. Apple sees a big
potential of business.

Apple chooses China for manufacturing instead its home country due to the low labour cost.
It could, however, limit the product appeal.

Technological Factors

Apple got entry to Chinese market the agreement that Apple products would be made
available in both China Mobile and Apple retail stores.

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 Apple had invested 3% of the net sales (which is more or less 8.09 billion USD on Research
and Development.

As consumers started preferring larger screen, Apple is now forced to increase its screen size.

Legal Factors

US government imposed a legal ban on the import of some of Iphone parts, which are
brought back later.

Apple could engage in litigation as it started offering financial services through Apple Pay.

The company is exposed to the threats like piracy and litigation as a large number of people
use its products.

Environmental Factors

Apple has been forced to spend money on discarding used and non-used electronic junk as it
can cause environmental hazards.

Environmental issues caused by manufacturing facilities in China has become a growing

concern for Apple.

China’s attempt to minimize the environmental side effects could lead Apple to increased
manufacturing costs.

After evaluating all the factors in PESTLE analysis, it can be predicted that apple will
continue to hold its top position in information technology industry. The reason being it boasts of
adaptive qualities to perform well even in a challenging environment.

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PEST Analysis - External Environment

 Political Analysis

Apple Inc. is exposed to many political problems, as company had a decent number of
contract suppliers in world especially in Asia (CNET 2012). Also major sales contribution for
Apple is from outside US (Apple 10-K). Any political insurgence for sure leaves Apple to
danger. Furthermore, Apple recently was in political pressure and its supplier worker issues,
suicides cases were registered against one of its biggest supplier, Foxconn, long working hours
brings stress to workers and in May 2010 two of workers lost their life and sixteen were injured
during an explosive in one of Apple’s supplier facility (Torres et al 2012). Survey conducted by
SOMO shows, Delta Electronics a facility of Apple Inc. had about 5000 workers registered in
union although they aren’t having any significance clashes with management but still
Apple is espoused to political risk (Green Beagle 2011).

Apple’s political problems are not just confined to abroad infect. Apple is facing legal
stress domestically also. Previous year, it restored imports of some of its parts used in Iphone
which ever earlier banned by US government. America’s toughing labor and environmental laws
are also making it difficult to compete in highly competitive environment (Apple 10-k).

 Economic Analysis

Apple felt the heat, as the world advanced economies i.e. America, Japan and Europe
were and are but recovering from global recession (IMF 2013). Further, the growth of world’s
economy was also very slow in 2012 and was expected to be same in 2013-14 as obvious. Apple
has been affected by crisis .i.e. the change in American region sales for current year was 9% in
2012-13 compared to 50% of 2011-12, in Europe 4% in comparison to 31% and in greater China
13% in comparison to 78% (Apple10-K). Unemployment rate in US was 7.9 during 2012-13, 4.1
in China and 4.6 in Japan, was one of the significant causes of downturn in sales growth
(Trading Economics). Euro crisis, US fiscal problems and hard landing of large developing
countries will likely to continue in coming couple of years leading Apple to more

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toughen economic situations (IMF 2013). Moreover, stringing dollars had also source of
problem for Apple product prices, transportation cost and profit margins (Apple 10-K).

 Social Analysis

Throughout its history, Apple has been making a series of changes in its products to
satisfy and fulfill what its customers expect. In order to do so, it has been making many
acquisitions – such as Embark, Prime Sense, and Topsy – and many alliances – e.g., Sony,
Motorola, Phillips, and AT&T (Business Insider). Sales of Apple products increased by a good
percentage in India in 2013, which forced the firm to open franchises and make investments in
India, which is clear evidence of Apple showing a rationale as her growth strategy.

 Technological Analysis

Information technology is highest earner for past a decade but only those companies have
earned well who had innovated. Apple is a trend setter in consumer electronics business and had
aggressive philosophy on innovation. It by offering unique and advanced technology retained
49% of its customers and convert 20% to iOS in year 2012-13 (Frobes 2013). The cracked deal
with China Mobile had also brought 760 China Mobile subscribers into their circle, giving Apple
and immense competitive advantage in world largest growing market (Frobes 2013). Along with
above mentioned positive technology industry related points for Apple Inc. there are some risk
factors also present.

Apple needs to invest more and more in R&D as of competitive and short product life
cycle nature of industry (Apple 10-K). Apple designs are unique but consumers are also giving
preferences to screen size. Moreover, it is famous for its one floor software application offering
which is third party software, bringing risk to its continuation of contract with the Apple (Apple
10-K).

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PORTER’S FIVE FORCES ANALYSIS

The analysis of Porters five forces enables more effective strategic decision making
(Porter 2008; Johnson, Scholes, and Whittington 2008).

 Rivalry among competing sellers: (High)

Apple Inc. had a well-diversified portfolio of tech based products; it sells hardware and
software which makes a tough situation for Apple to compete globally (Apple 10-K). The impact
of highly competitive market can be seen in lesser sales growth 50% to 9% in America, 31% to
4% in Europe, 94% to 27% in Japan. Apple is also losing it smart phone market share, 14%
decline in recent company’s quarterly report, Apple iPad growth also slowed to just 13% as
compared to competitors 79%. Positive point of Apple is, its product line is less, simple and user
friendly, so they manage to make sales out of it as compared to competitor’s one where enough
choice is present to confuse consumers (Apple Form 10-K). Apple products had high
differentiation with competitor’s products. Moreover, Apple distribution channel i.e. via Amazon
and direct outlets is very strong, helps Apple to strategically position their products. Looking
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into the intense competitive environment it should increase its investment more in mobile,
computer and software.

 Potential entry of new competitors: (Low)

Apples threat of new entrant’s competitors is low. As Apple is world’s dominant IT

having focus on niche market i.e. high income consumers, makes it difficult for new entrants to
grasp market share specially when just alone iPhone need $100million investment. Apple also
use contract manufacturing strategy saving unnecessary cost and expense, as no need to spend
money directly on social responsibilities helping them to be the world’s most profitable and
capitalized corporation. Other reasons for low threat is copyrights, patents and high switching
cost. But Apple is also in risk if the suppliers refuse to renew the contracts.

 Competitive pressure from substitute products: (High-Moderate)

Apple’s substitute product pressure is high-moderate. For almost every product of Apple
there is a substitute present.

Ipod -> Samsung mp3 player & Sony mp3 player

Ipad -> Samsung tab

Iphone -> Samsung galaxy, Samsung note, HTC, Nokia, Sony Erickson

But Apples OS still proves to be a strong area of Apple which is not having any near
substitute. Another positive area is the Apple own app store, iTunes and Iclouds.

 Bargaining power of suppliers: (Low-Moderate)

Suppliers bargaining power is moderate because of their unique capability to manufacture

product for Apple. But, Apple had a very well diversified supplier numbers; they aren’t

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manufacturing everything from one supplier and one place. Because Apple buys in large
quantity, giving them higher buying power (Green Beagle 2012).

 Bargaining power of customers: (Low)

Apple enjoys its bold image of being innovator, quality continuer and big investor in
R&D helps it retains its current customers. Along with retention, Apple is also successful in
switching competitor’s customers towards itself many times (Tech Crunch 2014).

SWOT Analysis - External Environment

 Opportunities

Apples iPhone has plentiful result since its invention; recent statistics shows that iPhone
still is Hercules (Apple 10-k). IPhone 6 introduction will rewrap market for Apple. Further
contract signed last year with China Mobile has and will open up abnormal opportunities in
growing market. Rumors of Apples wearable made up of bending glass material if offered in
early 2015 would be an asset for company, as it would be closest substitute to Samsung’s
wearable and with unique material. Apples goodwill worth $1577 million, one of key cause
is talented personals; competitor’s attractive offering may pull them which Apple can’t
afford i.e. to lose human resource (Apple 10-k). Opportunity for Apple is if management
retained talented human resource which in return connects company to creativity and innovation.

 Threats

The competitive nature of business sector in which Apple Inc. operates brings many potential
threats for them. Majority of the competitor’s ample resource brings a threat that they go for low
profit margins, break even or even negative pricing (Apple 10-K).One of the reasons of intensive
order to be cost effective also don’t have
their own software. Moreover, Apple’s majority suppliers are from Asian countries. Any
economic or political problem may cause shortage of supplies or increase in production cost
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(Apple 10-K).Apple would be consistently losing market share if they wasn’t able to
innovate continuously or rather reduce price.

Boston Consulting Group Matrix

Boston Consulting Group (BCG) matrix is among the widely used model that helps making
timely and efficient strategic decisions (Fred R. David).

TABLE 1. Apple’s BCG Matrix

Brands Revenues % of Corp. Largest Your Relative Market

Revenues competitor’s brand’s market Growth
market share market share Rate
share

Iphone 91, 279 53% 26% 32% 1.2 44%

Ipad 31, 980 18.70% 18.80% 38.80% 2.11 51.80%

Ipod 4, 411 2.60% 20% 32.60% 1.68 3%

ITunes 16, 051 9% 22% 63% 2.86 5%

Mac. 21, 483 13% 26.50% 13.70% 0.52 -5.60%

Figure 1: Apple Inc. BCG Matrix

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 Only five of products were analyzed based on the data availability in Apples 10-K form.
Iphone pretty obviously positioned itself in stars, as iPhone remains the core revenue generator
for company. Along with high market share, it had high market growth potential which Apples is
planning to exploit via introduction of Iphone 6. Ipad had a huge potential but unfortunately due
to high availability of its substitutes, Ipad is not performing to its capacity, differentiated features
with increased application software support and direct selling strategy can help reach its
capacity. IPod and iTunes being at dogs shows the maturity of the technology.

Apple had a defendable strategy of not investment more in iPods but just bring modified
versions like increasing the memory size etc. to cope with sales. Apple’s hope from Mac is still
high despite of at cash cows because around to Apple 10-K form, Apple’s philosophy toward
future is Smartphone’s and computers.

Critical Analysis of Apples Corporate Governance and Corporate Social

Responsibility

Increasing conflicts between management and shareholders, more corporate scandals

and increasing outsider’s stakes in company had emphasized on growing importance of
literature over corporate policies and procedures over its organization’s ownership structure.
Aim of corporate governance is to overcome the competition in organization rising from inside
structure (Mitchell, 1997). Apple Inc. had decent number of corporate governance guidelines
present, covering almost majority sections of International Corporate Governance Network
principles (ICGN). Despite of being literature rich Apple’s real time implement of
principles are poor. Calpers, a US largest public pension fund in 2010 filed a resolution against
IT giant on its one electing of directors, Calpers also emphasized on incumbent of majority
voting system as criteria for board election (Apple Insider 2014).Moreover, Apple had
been criticized on its diversity i.e. inclusion of more female director which is in response of
questions on its other International Journal of Economics, Commerce and Management, United
Kingdom Licensed under Creative Common Page 963 competitors male dominant board for

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the purpose of bringing people from different backgrounds and color to contribute positively to
the global company (Satariano 2014).

According to a National Centre for Public Policy Research published in 2012 conflict of
interest raised against Gore Ex-Apples board member when Apple signed contract of hydrogen
power plant with Bloom Energy, Gore was accused of using his influence as Gore had
ownership stake in Bloom Energy (Almasi, 2012).Further the company had also been criticized
on its excessive compensation to executives, with a proposed solution of tying pay with Apples
performance (Satariano 2014).In Early 2014, Apple’s CEO was criticized by its shareholder on
green goals of the company (Winston 2014), shareholder emphasized focus on short term goals
rather than long term goal which clearly predicts that company never neglects the importance of
long term goal but should also focus on shorter returns for shareholders, too.

Not only Apple’s corporate governance had room to be criticized, there is a strong
contradiction between CSR policy and actions of company. Report also objects the limited CSR
legal environment and its management by Apple critically. Apple is world’s largest information
technology and most profitable business on earth. It is also responsible for the society in which
they do business i.e. Apple’s corporate social responsibility. CSR is not a legal standard rather an
ethical standard. Increased competition in sector requires Apple to be more innovative than
before and more ethical in business transactions.

Corporate social responsibility is defined as a company’s obligation to exert a positive

impact and minimize its negative impact on society. Despite of showing high commitment and
insistence on suppliers to provide state of art save working conditions, avoidance of child labor,
optimum labor working hours with fair wages. Still Apple has been under the ink of scholars and
reporters because of series on conflicts i.e. The Foxconn suicides, Foxconn factory blasts,
Foxconn long working hours and Foxconn’s underage workers (Cristina et al. 2012).
Survey conducted by SOMO 2007 reported, PIMES, Hitachi Global Storage, volex Cable, CKL
Delta Electronics who are some of the suppliers of Apple were found in volitions of working
hours more than 60 hours. Working hours forced overtime. Nonpayment of overtime wages,
Occupational safety, Occupational illness and industrial hygiene standards of EICC.

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Critical Analysis of Strategies Used by Apple

Apple Inc. had small number of strategies to follow like premium pricing, low cost,
product segregated strategy, less or but integrated products, low focus on market share,
low shareholder return policy and global cheaper marketing. Apple Inc., being among the most
successful brands of world and marked performance of implemented strategies, although, had
faced lots of critics on its strategies.

Apple’s widely criticized strategy as always and obvious is the strategy of premium
pricing (Nair 2014), the product market segment of Apple is higher, medium and upper class of
economy making it difficult for the average people to purchase. Moreover, major
competitors are consistently working of price minimization strategy, like Google plans to
introduce less than $100 smartphone in India and free android software availability to
Samsung intensified competition (Dutton 2014).Apple not really an inventory but a trend setter,
following up their differentiation strategy they try to bring something which is complete and if
it’s not they retain it rather to market, exposing Apple to giving up short term but critical market
opportunities helping Apple to maintain their share until new product offering (Farber 2013).
Apple’s integrative strategy of full package of hardware mobile and software iOS is the most
appreciated facilities with million applications from third party but is not cost effective, in 2013
out of every four smart phone sales Iphone purchased is one (Meyer 2013). Alex Wilhelm in his
article published in 2014 criticized the lower cash return policy of Apple Inc. to its
shareholders while company has above $100 billion as there cash reserves. Weaker inorganic
growth strategy as compared to competitors also could be hazardous for company as ‘Apple
had one acquisition per year for past 25years compared to Microsoft’s 45, Google 40 and
CISCO 30 (Cheney 2010). Apple also believed to be trend setter in cheapest strategy of
marketing via patents wars. In normal business they would have to spend millions and even
billions to spend on high profile shows and timing, but thanks to this strategy, they are
everywhere every time every channel for free. Although, now they won the law suites but not all
of them, which costs at Apples image (Galasoo2014).

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CONTINGENCY PLAN

Apple Inc. is one of the most successful organizations in the world. The heighten anticipation
from consumers when they launch new products proves they are one of the most visible brand
names in the world. Apple Inc. success is attributed to the visionary leadership of former chief
executive Steve Job and the Strategic plan of emphasizing on developing new products.

Difficulties and Risks

 High Competition and rapid technological changes keeps Apple under pressure.
 Consistently stimulating customer demand. Successfully managing frequent product and
technology development.

Worst- Case Risks

 Future operation depends on the Apple’s ability to obtain sufficient quantities of the rare
metals and other components used in production. Growth of Apple’s own retail store
could discourage third- parties from selling and promoting the company’s product.

VI. ALTERNATIVE COURSES OF ACTIONS

Alternative strategy applicable in ensuring that Apple remains on top of producing innovative
products includes increased research and development. This can only be achieved through the
allocation of finances to programs to increase innovations. This would increase its market share
by keeping loyal customers. The drawback is that Apple requires financial investments in these
programs. Another strategy to increase customers and market share. Its drawback is to invest
more financially.

Apple should continue investing more in research and development to design more
innovative products that would satisfy its loyal consumers. This would sustain the organization’s
goals although it would have an impact on its budget as more finances would be required. It is
recommended that the company adopts the alternative strategies discussed.
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 To achieve this, Apple Inc. has to increase its financing, carry out market research to
determine consumer satisfaction and how the company is fairing in the market. Apple also needs
to undertake an evaluation of the actual and standard progress of its innovative products as a way
of checking market and product performance..

The risk response to the rapid technology change risk is to treat it. the risk brought by rapid
technology change is that Apple may fail to bring innovative products or higher product price
with lower product differentiation as compared to its competitors, consequently, it will suffer
from customer loss and profit shrink, and these impacts are severe Additionally, the likelihood of
the technology change risk is high since we are in a technology updating age. Though the
amount of risk is highly over its risk appetite. Apple can do little to prevent the risk from
happening, additionally, this risk id hard to be transferred into the insurance market, so in
response to it, Apple should take actions to reduce the likelihood of this risk. One of the main
methods to reduce this risk is to invest its research and development department to keep pace
with the instant technology update and bringing out the innovative products continuously to
attract customers, besides, Apple can cooperate with a professional law firm to protect its
intellectual products from infringing, thus, competitors will be discouraged to emulate its product
feature.

VII. CONCLUSION AND RECOMMENDATION

Apple had this technique of wait and to bring full package for targeting niche market
while giving focus to profit margins. They are successful in selling their products and had
highest customer satisfaction ratio. Problem with Apple is that major consumers are unable to
buy due to higher prices, Apple’s don’t had more than paper work for supplier codes,
indirect reachability to maximum markets, app store is based on third party contractor. It is
confronted with possible human resource turnover, criticism on its governance and issues
such as not socially responsible corporation.

It is recommended that Apple along with cost minimization should work on price
minimization. Looking forward for Blues Ocean strategy would be in favor as it is in lined with
profit maximization goal of company. Apple can decrease its future threat via increase

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investments, currently which is a billion dollar on yearly which is basically not sufficient.
Company should pay more focus to emerging markets like China and India which already been
occupied by competitors.

Apple must broaden their board of directors to improve corporate governance; they must
be committed toward social responsibilities more than words, further there is lack of
communication and valuing similarities between management and investors’ company by which
they had lost enormous portion of its market capitalization, therefore it must improve
communications with its investors.

References:

Almasi, D. (2014). Apple's Fuel Cell Project Likely to Financially Benefit Al Gore: The Patriots.
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Apple Inc., (2014). Supplier Responsibility 2014 Progress Report. Supplier Responsibility
Progress Reports. Cupertino, CA, USA: Apple Inc.

Apple Inc., (2013). Form 10-K. Cupertino, CA, United States of America: Apple Inc.

Apple Inc., (2014). Business Conduct: The way we do business worldwide. Cupertino, CA,
United States of America: Apple Inc.

Appleinsider.com, (2014). Pension giant challenging Apple over corporate governance. [online]
Available at:

http://appleinsider.com/articles/10/12/22/pension_giant_challenging_apple_over_corporate_gove
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