Name: Asia Gulmarjang

Roll no: 913D

Title: Assignments # Apple Inc
Subject: Strategic Management
 Think Different

ACKNOWLEDGEMENTS

The report being submitted today is a result of collective effort. There are innumerous
helping hands behind who have guided us on our way. Writing this report appeared to be a
great experience to us. It added a lot to our knowledge. This report is one of our memorable
experiences in student life.

Though words are inadequate in offering thanks to our teacher but we owe our profound
gratitude to Mr. John C. Sullivan for stimulating our creative abilities by assigning this project
to us and for her able guidance and useful suggestions, which helped us in completing the project
in time. Whatever we have learnt from her and this project report has put indelible impression on
our minds and it is our conviction that this learning experience will always be a source of help in
our practical life and professional career.

Finally, yet importantly, we would like to express our heartfelt thanks to our beloved parents, for
cooperation, help, kindness and blessings, our family and friends for their help and wishes for the
successful completion of the work.
 Think Different

Table of Contents

1. Executive summary…………………………………………………….. 1

2. Introduction…………………………………………………………….. 2

3. APPLE Inc………………………………………………………………3

4. Vision Statement………………………………………………………... 4

5. Mission Statement……………………………………………………… 4

6. Values………………………………………………………………….. 5

7. External Audit…………………………………………………………. 6

8. SWOT analysis for APPLE Inc.……………………………………….. 7

9. Porter’s Five Forces Model…………………………………………… 9

10. External Audit………………………………………………………… 10

11. Competitive Profile Matrix………………………………………….... 11

12. Internal Audit…………………………………………………………. 12

13. Internal Factors Evaluation Matrix…………………………………… 13

14. SWOT Matrix………………………………………………………… 15

15. The Strategic Position and Action Evaluation (SPACE) Matrix…….. 16

16. BCG Matrix………………………………………………………….. 17

17. Internal External Matrix……………………………………………... 18

18. Grand Matrix………………………………………………………… 18

19. The Quantitative Strategic Planning Matrix (QSPM)………………. 19

20. Finance/ Accounting………………………………………………… 20

21. Conclusion…………………………………………………………… 23

22. References………………………………………………………….... 25
 Think Different

List of Tables and Figures

1. Model 1: Showing Porter’s Five Forces Model at APPLE Inc.…………… 9

2. Model 2: Showing EFE matrix for APPLE Inc.…………………………… 10

3. Model 3: Showing CPM for APPLE Inc.………………………………….. 11

4. Model 4: Showing VRIO for APPLE Inc.……………………………….... 12

5. Model 5: Showing IFE for APPLE Inc.…………………………………... 14

6. Model 6: Showing SPACE Matrix for APPLE Inc.………………………. 16

7. Model 7: Showing BCG Matrix for APPLE Inc.…………………………. 17

8. Model 8: Showing IE Matrix for APPLE Inc.……………………………. 18

9. Model 9: Showing QSPM for APPLE Inc.………………………………. 20

10. Model 10: Showing sales ratio for APPLE Inc.………………………….. 21

11. Model 11: Showing Asset Turnover ratio for APPLE Inc.………………. 21

12. Model 12: Showing Inventory Turnover ratio for APPLE Inc.………….. 22

13. Model 13: Showing Gross Profit Margin ratio for APPLE Inc.…………. 23
 Think Different

1. Executive summary

Apple Inc. is a technology company, which designs, produces and sells goods of the Computer,
Music and Mobile-phone Industries. It is differentiated by its brand-perception and
identification. Over the last couple of years, Apple has become a cult-brand, iTunes, and
QuickTime and iMac lines. Apple Inc.’s short-term goals is currently increasing the sales of the
just launched iPad (the most innovative web=browser in market). In the long-run, Apple aims for
the top of the market, becoming the number one leader.

Apple Inc. has incorporated numerous features that are unique and well known in the market
today. We consider that there are several Apple products with several appealing features such
as: iMac, iPod, iPhone and iPad. These products represent a revolutionary era for the
development of Apple. By placing such products in the market, Apple Inc. has attracted a lot of
customers in one way or another. Highly advanced technology, simplicity and design, and the
sense of luxury are the main features integrated in these products. Moreover the comfort and
convenience that these products provide are very crucial.

“Think Different”

One of the main reasons which inspired me to choose Apple Inc. is its unique, simple and
luxurious image that Apple has created in the market over the years. “Think differently” which
is an inspiring motto, made us believe that simplicity and creativity combined with luxury can
lead to a successful and profitable company, such as Apple. Another component that we found
to be challenging for us was to understand Apple’s goals, objectives and their secret of being
successful. A very important fact about Apple products today is that these products are globally
spread. This has created among us the idea that Apple products are no longer luxuries but real
necessities due to the technological developments. Moreover, what has motivated us most to
select Apple Inc., is the way we relate ourselves with its products. Each of us being an Apple
consumer has built trustworthiness relationship with the products that this company offers.
Owning an iPod or iPhone today definitely will make your life easy and simple.

As mentioned above, 2020 came with the launching of the iPad, which is a totally differentiated
product in the market. It is a web-browser, which also can be used as laptop, and can be useful in
every aspect of educational is an incentive for more buyers to purchase. This is the main goal of
Apple in the current day when iPhone 12, iPhone 12 Pro, and iPad Air are available Friday,
October 23, customers can get their all-new products directly from Apple through tailored
purchase experiences offered online, by phone, or in store. From a chat session with a Specialist
that starts online and finishes with contactless delivery, to visiting select Apple Store locations
for a one-on-one session with an Apple Specialist, customers can find the best way to get the
products they’re looking for. And unprecedented offers from AT&T, T-Mobile/Sprint, and
Verizon give customers more choice and flexibility than ever, with offers starting as low as $0
per month for iPhone 12.1
“There’s never been a better time to get a new iPhone, and there’s never been a better destination
than Apple Retail,” said Deirdre O’Brien, Apple’s senior vice president of Retail + People.
“We’re offering new ways for our customers to get to know all of our products before they buy,
so they can be sure to get the product that’s right for them. Whether our customers choose to
connect with us in person, by phone, or online, our entire retail team is ready to deliver the
world-class personalized service they’ve come to expect from Apple
 Think Different

2. Introduction

Apple is all about Innovation. The main reason why I have chosen Apple
Company for the strategic management Assignment is that I love Apple
products & Apple Company does great things for people not only in terms of
technology but in terms of connecting with people. Now they are moving
forward to save the planet by designing the world's most innovative products
from recycled materials. Soon they will make them all with clean energy and no
carbon footprint. Some say it's impossible. But at Apple, they think differently. Apple
Inc. is an American global innovation organization settled in Cupertino, California,
that plans, creates and sells customer hardware, PC programming, and online
administrations. It is viewed as one of the Big Tech innovation organizations, close
by Amazon, Google, Microsoft, and Facebook

I will analyzing and creating a strategic plan for Apple located at U.S, Cupertino
California

Apple Inc. is one of the Big Four tech companies with its headquarters in California. The
company is known globally for its innovative solutions for computer software, electronics,
and online services. Since its inception in 1976, the company has been a global leader in the
technology industry.

Apple is perhaps the ultimate definition of a company that has positioned itself as a metric of
quality within the niche it operates in, and this prominence associated with Apple narrows
down to its mission and vision statements. In fact, Apple has grown as the driving force of
innovation for over 20 years now ever since it was founded by Steve Jobs, Steve Wozniak and
Ronald Wayne in 1976.

Today, it is seen as the single source of revolution in designs of personal computers among
other software transformations. Ideally, the vision statement of a company details what it is all
about with a focus on specified range of products and quality for its customers.

Apple’s mission and vision, as well as its core values, highlight the company’s purpose and its
driving force. Here is an in-depth look at the mission, vision, and core values of this tech
giant.
Additionally, its vision statement reflects where the company sees itself in the future –
a technological invention leader. In relation to this, a company’s mission statement outlines
the tactics the company looks to implement to propel it towards its future state. In this case,
Apple mission statement describes the areas it majors in, and the intended goals of driving it
towards its vision. Apple is particularly a dynamic company that looks to readjust itself to the
changing world as evidenced by the changes in its mission and vision statement over the
years.

One element, however, remains rigid within these adaptations – quality products and services
for its customers. Despite these frequent changes in the mission and vision statements, the
core values adopted by Apple go a long way in maintaining its consistent growth. Some of
these comprise inclusion and diversity, education, accessibility, environment, supplier
responsibility and privacy.

These are the guiding principles that continue to spur employee motivation and commitment
to the mission and vision of the company at all times. In fact, the interlinkages in all these
components together with the mission and vision statements all point towards the success of
Apple.
 3. APPLE Inc.

According to (Scribed Inc., 2013) Apple has to be one of the greatest success stories of all time.
The beginnings of Apple started with Wozniak assembling a simple built computer machine. It
was in the summer of 1971 Wozniak 21 and Jobs 16 were introduced to each other by a mutual
friend Bill Fernandez. Wozniak had shown Jobs his simple built computer machine and this
impressed Jobs to the point Jobs believed he could sell it for a profit. It was here they would
form a strong friendship because they not only shared a passion for computers, but because they
were both known as outcasts and for the first time they had a great understanding, admiration
and respect for each other’s abilities, personality and intellect. They would begin the Apple
project by selling some of their possessions: Wozniak's HP scientific calculator and Jobs'
Volkswagen, they raised $1300 and assembled their first prototypes in Jobs bedroom. When the
project became too big for the bedroom they moved the project into Jobs family's garage, it was
on a huge wooden work bench that served as their first manufacturing base. The computers were
hand built by Wozniak and first shown to the public at the Home brew Computer club. After
selling a number of the machines Apple was established on April 1, 1976 and went public on
December 12, 1980.

Apple has maintained its great success with its ability to understand what the consumer wants
before the consumer even knows what they want; Apple effectively creates wants by their
constant creative innovation and unique design which is stylish, user friendly and affordable.
They have also been able to create a brand in the high technology world just as Chanel has in the
fashion world. People can easily recognize an apple whether it's the I-Pod, the I-Phone, the Mac
Air or the I-Pad. It has become a product that defines one's identity in how they desire to be seen
by society that is a person who is highly innovative, intelligent, stylish and apart of the in crowd.
This is pure marketing genius. This marketing genius of Apple has seen this company
outperform beyond the business world's expectations. While so many companies are struggling
to break even in the current recession Apple is getting stronger by the day.

Apple’s Most Successful Products and Services

iPhone 4, iPad iPad 2, iPhone, iTunes, PowerBook G4, iPod, OS X, iMac, Quick time, Mac,
Apple II.

PRODUCTS and SERVICES

Apple Store, Mac, iPod, iPhone, iPad, iTunes.

Other Products and Services

Desktops, Xserve, Notebooks.

4. Vision Statement

It is especially important for managers and executives in any organization to agree on the basic
vision that the firm strives to achieve in the long term. A vision statement should answer the
basic question, “What do we want to become?” A clear vision provides the foundation for
developing a comprehensive mission statement (David, 2011)

a. Vision Statement of APPLE

Apple vision statement is “We believe that we are on the face of the earth to make great
products and that’s not changing. “Through this statement, the company highlights that they
are always determined to deliver quality products for its client

i. Explanation of APPLE’s vision

Through this statement, the company highlights that they are always determined to deliver
quality products for its clients. The statement also points out that they intend to do so for quite
some time. It gives a detailed account of how the company approaches its operations to position
itself as the dominant player in the sector it operates in. Some of the components associated with
this statement include:

1. Innovations
2. Integration of partners and excellence
3. Market specialization

Apple has not limited itself to a specific geographical location. Instead, the company wishes to
come up with products that will be used all over the world. In this element, Apple had opened
506 stores in 25 countries as of February 2019. From their vision, it is clear that the company
intends to cut across all continents and achieve a global presence.

The first component shows that Apple is all about technological innovations. The second
component shows that Apple intends to keep coming up with great products for quite some time.
The company has always been at the forefront of innovative technological solutions and plans to
remain ahead of the game.
It does this by stimulating its employees with the best innovative resources that are also client-
focused. To achieve this, Apple believes in the power of collaboration in such a competitive era
to stay ahead of the rest. It also promotes this by specially targeting its resources in areas where
it can have maximum quality impacts.

5. Mission Statement
Apple mission statement is “To bringing the best user experience to its customers through its
innovative hardware, software, and services

Tim Cook, Apple’s current CEO, stated this as the company’s mission statement and included it
in the 2018 annual report. Through their mission statement, Apple highlights that it exists to
offer its clients the best service that it can. The statement also describes how the company
intends to achieve this.

In this current mission statement, the company highlights the scope of its operations and how it
exploits these to satisfy the needs of its client base. While focusing on the dynamic technological
changes over time, Apple stays clear that impacting positive change through innovation is its
central objective. The following components arise from this mission statement.

 Best user experience the component of ‘best user experience’ shows that Apple’s
priority is ensuring its client base has an easy time while using their products. Rather than
be a source of entertainment, Apple designs its products to be user-friendly. The security
features added to each product also help to enhance user experience. It is no surprise,
therefore, that Apple products are well-crafted and masterfully designed to the last detail.
 Improving the lives of people In the first component of its mission statement,
Apple reiterates the duty of the company to stimulate ease in the lives of its users through
simplified and user-friendly technology. The recognition of the vulnerabilities in the
online space has particularly pushed the company to link this component with the
demand for security features that improve the user’s experience. While doing so, the
company has broadened the services its customers can enjoy as shown in its education,
business and healthcare reach.
 Empowerment of the public Innovation is another crucial component for the
company. Apple is dedicated to helping close any gaps when it comes to the technology
space. Given that technology is ever-evolving, Apple is continually coming up with new
designs that meet its clients’ evolving needs as well. The approach adopted by Apple in
meeting this element of its mission statement shows that the company considers its
products to be more than mere tools of entertainment. They are instead a source of
empowerment, and this explains the extensive presence of apple at work. In fact, this
emerges as a major source of innovation motivation for the company.
 Top-quality products the popularity associated with Apple products is evidence of
how far the company goes to fulfil the third component of its mission statement. Most
importantly, one rule remains unbent in this company, and that is providing the customers
with the best quality products. The company aims to deliver high-quality on all aspects of
 its products. The integration of quality hardware, software, and services gives the
company leverage over its competitors in the market.

Value statement
The value statement is “We think Different “

CORE VALUES

Apple core values include “inclusion and diversity, education, accessibility, environment,
supplier responsibility and privacy.” Values reveal the aspects that Apple considers integral to its
overall success as a technological and innovation leader. Apple is critical about the principles
that have seen it model itself as a quality-oriented company in over two decades. To stay true to
these standards, the company ensures that all its operations are in line with each of these values
as highlighted in its statement of core values.

Apple core values include:

 Accessibility
 Education
 Environment
 Inclusion and diversity
 Privacy
 Supplier Responsibility

1. Accessibility

These values give us a sense of what Apple holds dear and considers vital for their success as a
technology trailblazer. The company ensures that it aligns all its operations with its core values
so that it holds on to its position as a global technology giant.

2. Education

Since 2014, Apple has been at the forefront of providing educational solutions to schools across
the United States. Through a partnership with Connected, the company has donated its products
to students and teachers 114 underserved schools. They also pledged $100 million worth of
teaching and learning solutions. The company continues to work with the students and teachers,
teaching them how to use the products to enhance the learning experience, as well as for life.

3. Environment
Apple focuses on taking care of the environment just as much as they are determined to come up
with quality products. The company aims to build products that are safe for both the users and
the environment. They use recycled products for both the inside and the outside. Through Apple
Trade-In, users can exchange their old devices for either credit or recycling, reducing the
negative impact on the earth.

4. Inclusion and diversity

The company draws its greatest strength from the fact that people from all walks of life work
there. Because it aims to provide products for people across different regions, ethnicity,
religions, genders, and cultures, Apple believes in bringing on board a diverse team. Apple has
made consistent progress by bringing people who are different in the way they think, what they
have experienced, and in who they are.

5. Privacy

Apple products hold a lot of sensitive user information, and the company believes that privacy is
a fundamental human right. As such, all products are designed to offer the utmost security for the
user. The security features also allow them to choose what information to share and with whom.
Enhanced security features such as face and touch ID ensure that only the user has access to the
device and makes it difficult for anyone to gain unauthorized access.

6. Supplier Responsibility

Apple holds its suppliers and partners responsible for creating quality products for its users, who
always come first. The company ensures that the suppliers meet all the requirements while
building opportunities for them. It also holds its suppliers accountable to ensuring that their
employees work in safe and conducive environments, do not have their rights infringed, and do
not face discrimination in their workplaces.

7. External Audit

The purpose of an external audit is to develop a finite list of opportunities that could benefit
a firm and threats that should be avoided.

a. External Analysis for APPLE Inc.

External environment determines the present situation of Apple Inc., and also helps find out the
possible influences of the political, economic, and social and the technological factors on the
organization.
SWOT analysis of Apple
Here’s a detailed analysis of Apple’s strengths, weaknesses, opportunities, and threats

Apple’s Strengths

1. Most valuable brand 

Apple is ranked # 1 for the 7th consecutive year by Inter brand – with a brand value of $234
billion.

2. Globally Iconic

Apple is one of the most reliable company when it comes to personalized advanced computers
and smart technology devices. It has millions of loyal customers with steady increment.

3. Top Technology

Apple was the first to introduce some of the most innovative products that have changed the
world (iPhones, iPads). Apple is still determined to build and craft better, more proficient
technology devices.

4. Brand Of Choice 

It isn’t big news that Apple is a demanded brand in corporate offices. Apple has a specific
business page that offers top quality technology solutions for every corporation’s needs.

5. Proficient Research

Apple puts dedication into its product designs. Careful study is initiated and further research is
performed to help understand customer needs and requirements.

6. Sustainability made Possible through Liam

Liam is an iPhone recycling robot that breaks down and dissects an iPhone. It strips them all the
way down to a single bolt. Most parts of an iPhone can be reused.

Liam is designed to yield as many reusable parts as possible. These reusable parts are then
categorized and safely stored so they can be used for new manufacturing.
7. Expansion in services 

Apple has been expanding its services portfolio for many years. For example, about 16% of
Apple’s annual revenue ($46 B out of $260 B in FY 19) comes from its services, which is
the second biggest contributor to its revenue after the iPhone (54% of its revenue).

Apple’s services include digital content stores, streaming services, iCloud, AppleCare etc. In
addition, Apple has introduced many new services in 2019, such as Apple TV+ (launched in Nov
2019), Apple news+ and Apple Card (credit card services), Apple Arcade (game subscription
 Apple’s Weaknesses
1. High Priced Products

Apple’s products can be considered a luxury due to their premium prices. The products are
priced for middle and high-income consumers. Low-Income consumers can’t simply afford
Apple products.

Due to their premium pricing, only middle or high-class individuals can afford their products.

2. Limited advertisement & promotions

Apple has solidified their grounds by establishing loyal customers, even with limited advertising
resources. Apple marketing relies heavily on its iconic and flagship retail stores.

Because of their success, Apple does not feel the need to have excessive spending towards
advertisement in comparison to other big brands such as P&G, Coca Cola and Samsung
technology.  

3. Entering into area of non-competency

Apple is rapidly expanding into new services such as video content streaming, game streaming,
credit card – competing with the dominant players such
as Netflix, Disney, Citi, Chase, PayPal, etc. 

They might be entering into areas in which they lack competencies; remember the failure of
Apple maps.

4. Incompatibility with Other Software

When a customer buys an apple product, they enter the Apple universe. Apple’s products do not
support other software or technologies making them incompatible with other devices.

Customers have to exclusively purchase Apple apps or accessories to continue using their Apple
products.

5. Allegations of Tracking

Tracking users undermines trust. Apple has been accused of using tracking apps in its phones,
which revealed the precise location of users.

Even though the latest version of Apple’s phones gives users the right to decline the tracking,
trust is difficult to regain once it is lost.  

6. Unfair business practices

Apple is under investigation for unfair business practices after receiving payments to make
Google’s search engine as the default search engine for its Safari web browser. Collusion
between the two giants makes it difficult for rivals to enter and expand into the search engine
market.

Apple’s Opportunities

1. Consistent Customer Growth

Apple has been dominating the technology sector for years now. They provide top quality and
cutting-edge technology that offers a breakthrough in customer experience.

Their customer retention rate of 92% is phenomenal. Apple can always rely on the power of the
internet for future opportunities to gain new customers and form new alliances.

2. Qualified Professionals

Apple’s researchers, developers, and product specialists are a team of highly qualified
professionals that have years of experience in branding consumer products. With the expansion
of their team, Apple can continuously build new opportunities.

3. Expansive Distribution Network

Apple Inc. has the opportunity to expand its distribution network. Currently, the distribution
network that Apple has is very limited and leaves room for minimal growth.

Apple can generate higher revenue and sales if it focused on creating an expansive distribution
network. Furthermore, the company can benefit from diligent marketing and promotions.

4. Lack of Green Technology

Apple is yet to launch products that are created using green technology. The company has not yet
implemented or participated in creating sustainable technology that is eco-friendly.

5. Smart Wearable Technology

Smart wearable technology will soon dominate the world. According to Forbes, smart wearable
technology device sales will double by 2022. It will become a $27 billion+ market with 233
million unit sales.
Apple has the opportunity to continue to grow beyond just Apple watch and AirPods into
other wearable categories. 

6. Utilize Artificial intelligence

To increase its profit margins and have a strong market position, Apple should utilize artificial
intelligence. Recently, the company has extended its AI portfolio.

In the year 2017, Apple acquired Regained, a French AI startup and Desk Connect, an AI tool.
The former acquisition helps Apple to integrate intelligent search to the photos app on the
iPhone, while the latter acquisition automates tasks by helping the consumers to arrange apps
and features with a string of commands.

The company should focus on extending its AI portfolio to have a strong foothold in the future.

7. Expand Music Streaming Services

The youthful population and rapid economic growth in emerging economies offer immense
opportunities for expansion. Apple is already planning to expand its music streaming services to
52 emerging markets in Africa and the Middle East.

8. Deliver Self-Driving Software Technology

The demand for autonomous is increasing rapidly. Apple has the expertise needed to deliver self-
driving car technology rather than fully-functional autonomous or electric cars.

Apple has the opportunity to focus on delivering self-driving software technology instead of

building an actual car like Tesla does.

On a Bloomberg interview, Apple CEO Tim Cook says:

” We are focusing on autonomous systems. And clearly, one purpose of autonomous systems is
self-driving cars. There are others. And we start to see it as a mother of all A.I. projects. It’s
probably one of the most difficult A.I. projects actually to work on.”

Apple’s Threat

 Coronavirus Outbreak

Apple is highly dependent on China for its manufacturing and supply chain. In addition, about 17
% of its $260 billion in revenue come from China (a big market for Apple). The outbreak has
significantly affected and may continue to disrupt about 32% of Apple’s annual revenue in the
fiscal year 2020. 
2. Supply Chain Disruption

The recent events have significantly affected and disrupted its operations. It reported flat revenue
in Q2 of 2020 and declined to offer annual revenue estimates for FY2020 due to supply chain
uncertainties.

3. Apple Bullied By Counterfeits

Apple has become vulnerable to third world countries illegally utilizing the brand image to sell
counterfeit products. The illegal dealers sell Apple counterfeit products at the same value as an
original Apple product.

Counterfeit products can make potential customers believe that it is a product made by Apple
with low quality. big news can result in negative reviews and bad publicity for the company.

4. Increasing Competition

Although Apple as a brand has solidified itself, it still faces threats from competitors. With the
advancement in technology, brands like Samsung, Google, and Dell are giving Apple tough
competition.

As the competition is getting stronger, Apple either has to introduce new technologies or revise
its pricing policy to stay ahead of its competition. 

5. Market Penetration

There has been a significant change in market penetration by other brands in the smartphone
market. Companies like Samsung, HTC, and Lenovo are using Android software to create new
smartphones.

Currently, Android has captured 72.23% of the market share, while Apple has only 24.55% of
the market share globally.

6. China Tariffs

US government has imposed a higher tariff on imports from China, increasing the overall cost of
the products. Consequently, it adversely affects the gross margin on the products and may make
the product more expensive for customers.

7. Lawsuits

60 class-action lawsuits have been filed against Apple. Consumers were upset and baffled when
Apple announced that it deliberately throttles CPU performance on iPhone models with older
and degraded batteries.
The tech giant said that it did so to prevent unexpected shutdowns. Despite the clarification,
consumers felt betrayed because they that Apple does not believe in transparency. This led to a
number of people filing lawsuits against the company. 

The first class-action lawsuit was filed on December 21st, 2017 and alleged that Apple’s actions
not only negatively affect the resale value of their products but also forces its users to upgrade to
newer versions prematurely.

8. Backdoor Mechanism

Apple has been under constant pressure by government agencies to unlock the iPhone via a
backdoor, which means unlocking the encryption of the iPhone and giving access to its data. 

In several instances, Apple has denied providing the backdoor mechanism because it can be

exploited by the bad guys, which eventually exposes the security of millions of iPhone users.

9. Mark Zuckerberg criticized monopoly of iPhone’s app store

In a recent webcast, Mark Zuckerberg, Facebook’s CEO, criticized Apple for its monopoly on

App Store and hefty charges.

Mark Zuckerberg states that:

iPhone App Store ” blocks innovation, blocks competition,” and “allows Apple to charge
monopoly rents.”

Apple charges a 30% cut for in-app purchases through its app-store. The company is often
criticized because a 30% cut is a significant commission for small businesses or app developers.

Conclusion

Through this Apple SWOT Analysis report, one can learn the exclusive details of Apple. This
SWOT report is ideal for case studies. This report closely examines Apple’s strengths,
weaknesses, opportunities, and threats
9. Apple competitor Analysis

Business competition can be found in every industry, every product category or every geographic
market in the world. It benefits the consumers and is the main reason innovation happens.
Nonetheless, businesses (including Apple Inc.) hate it and try to avoid it or beat it at all costs.

Apple competes in many highly competitive product categories, such as smartphones, tablets,
mobile payments, laptops, smartwatches, enterprise software and application software.

The rivalry in each product category is fierce. Apple knows it. That’s why the company
acknowledges that the competition is the main threat to its profit margins and growth

Apple Competitor Analysis by Product Categories

Smartphones (iPhone’s competitors)

  Samsung Electronics Co., Ltd.
 Huawei Technologies Co. Ltd.
 LG Electronics Inc.
 Google Inc.
 HTC Corporation
 OPPO Electronics Corp.
 Vivo
 Lenovo Group Ltd.
 Xiaomi Inc.
 ZTE Corporation
 Sony Corporation
 BlackBerry Limited
 Nokia Corporation
 Motorola Mobility

Apple’s main competitor in the smartphone category is Samsung with its Galaxy S smartphones.
Other direct Apple rivals are Huawei, HTC, Google and LG. The rest of the rivals are either too
small or target different consumer segments and do not pose an immediate threat to the iPhone’s
market share or its margins. More on the Apple’s smartphone competitors read our article here
Tablets (iPad competitors)

 Samsung Electronics Co., Ltd.

 Amazon.com, Inc.
 Lenovo Group Ltd.
 Huawei Technologies Co. Ltd.
 Barnes & Noble, Inc.
 Auster Computer Inc.
 Acer Inc
 Xiaomi Inc.
 LG Electronics Inc.
 Sony Corporation
 Google Inc

Even though the tablet market is declining, Apple is still an absolute leader in it with over
20% market share, according to IDC. Again, Samsung’s Galaxy Tabs are the main direct
rivals to Apple’s iPads, with over 15% market share. Amazon.com was the only of the
top 5 tablet makers, which was able to grow its market share significantly, threatening
Apple’s and other tablet vendors’ positions
Personal Computers (Mac competitors)

 Hewlett-Packard Company
 Lenovo Group Ltd.
 Dell Inc.
 AsusTek Computer Inc
 Acer Inc
 Toshiba Corporation
 Samsung Electronics Co., Ltd.
 Sony Corporation
 Fujitsu Ltd
 Yun Sen Tech

Apple’s position in the personal computer (PC) market isn’t as strong as in the
smartphones or the tablets markets. The company only captured 7.1% market share in the
second quarter of 2016. Every PC vendor has a few offerings that directly compete with
the premium quality Apple’s Mac PCs and usually offer better hardware or the lower
price
Major Apple competitors

In order to identify the major (more serious, more important) Apple competitors we have devised
a unique evaluation framework. The framework consists of weights, ratings and a score to show
us, which competitors Apple should focus on the most.

 Weights. Weights show us how important each product category is to the company when
looking at the revenue generated by each product or group of products. Each product or
group of products are assigned weights ranging from 0.0 (unimportant) to 1.0 (very
important). The sum of all the weights must equal 1.0.

According to the Apple’s financial report, the company has five reporting product
categories. iPhone generated 63% of the total sales, iPad 10%, Mac 11%, Services 11%
and Other Products 5% of the total sales. This gives each product the following weights:
iPhone 0.63, iPad 0.10, Mac 0.11, Services 0.11 and Other Products 0.05.

 Ratings. Competitors are given ratings from 1 (minor competitor) to 4 (major

competitor). The level of competition is decided by looking at the competitor’s market
share and whether it targets the same consumer segment. Ratings are assigned
subjectively.

 Score. Weights multiplied by ratings give a score. A competitor having the highest score
is the most serious threat to Apple
As expected, Samsung Electronics got the highest score of 3.24. The company is the main
Apple’s rival in the smartphones, tablets and smartwatches industries. Google follows in the
second place with 2.33 points. I gave Google a rating of 3 in the smartphones category, because
of its Android OS, which isn’t the huge money earner, but its success significantly helps every
other smartphone manufacturer to compete with Apple and its iOS. Huawei became the 3rd
highest scorer with 2.09 points mainly due to its high-end smartphones success, especially in the
U.S. market

OPPO, Vivo and LG Electronics share 4-6 places with 1.26 points each due to their considerable
market share in the smartphones’ market. Amazon (0.78 points) threatens Apple’s tablet sales
and its revenue from ‘Services’ as well as Apple TV sales. Lenovo (0.74) is a serious rival in the
tablets, personal computers and smartwatches markets
Apple competitor analysis reveals that Apple should focus on its smartphone competition first.
The smartphone market is worth hundreds of billions of U.S. dollars and is the main income
source for the company. Apple still enjoys the most loyal customer base in the industry, but
should not disregard the demand for innovations. Otherwise its proprietary OS and its ecosystem
won’t be enough to keep the customers around.

Apple Inc. PESTLE Analysis

 Apple is one of the world’s most visible and recognizable consumer electronics brands. Apple
has long been an investor favorite because of its strong revenue growth and high return on
investment.

Even though it started as a traditional computer company, Apple now designs and manufactures
a wide variety of electronic devices, including smartphones, tablets, music players and television
sets. Apple has a very unique business model in which it writes and designs proprietary software
and offers its own operating system for all of its devices , in recent years, Apple has branched out
into entertainment and information services. It is now one of the world’s largest online retailers
of music, streaming video and software solutions, including smartphone applications.

Political Factors on Apple

 Apple is one of a number of American technology companies that has accumulated a

large amount of cash. It had $34.7 billion in the bank on June 30, 2015. This is generating
calls for higher corporate taxation in the United States, where income inequality has
become a major political issue.
 Apple is heavily dependent on lower cost manufacturing in China. Social and political
unrest in China could disrupt manufacturing or increase manufacturing costs in that
country. There have been also been calls to restrict Chinese imports in the United States in
an effort to boost American manufacturing.
 The cost of finding alternatives to Chinese manufacturing could be high for Apple. This
could lead to increased prices for Apple products.
 Apple’s dependence on Chinese manufacturing and markets makes it vulnerable to
political unrest in that country.
 Apple could become the target of growing nationalism and anti-Americanism in China,
which could reduce its market share.
 Apple’s close association with China could become a political issue in countries like the
United States and Japan if China were to be perceived as a threat.
 Apple’s dominant position in fields like music could lead to antitrust concerns and
political pressure to break the company up or limit its market share.

Economic Factors on Apple

 Increased labor costs in China could take away the cost advantage of some Apple
products.
 Stagnating middle-class incomes in some developed countries, including the United
States, could shrink the potential market for higher-end consumer goods such as those
marketed by Apple.
 A strong U.S. dollar could increase exchange rates, making it more expensive for Apple
to do business in key markets like Europe and China

Social Factors on Apple

 The biggest growth in consumer spending in coming decades will be in areas of the world
such as Africa where people are unfamiliar with Apple products.
 Consumers in those markets and younger people in Apple’s established markets, such as
the United States, lack the strong emotional attachment to Apple products that drive sales.
 There is a backlash against expensive and stylish products among some customers in the
United States and Europe.
 Ethical concerns about Apple’s manufacturing in China could limit its products’ appeal
among socially-conscious consumers.
 Apple’s close association with China could offend some potential customers in other
regions, such as North America and Europe, particularly if tensions with China rise.
 Apple’s music marketing strategy has created resentment and led to public criticism from
major recording stars that could tarnish the brand’s image.

Technological Factors on Apple

 Competitors such as Google and Samsung have demonstrated a strong ability to duplicate
Apple’s products and services. It took less than a year for Google to roll out a payment
app; Android Pay, with the same capabilities as Apple Pay. This means that many of
Apple’s signature services and products are no longer unique.
 The number of new consumer products Apple can bring out is limited. Many of its new
offerings, such as Apple TV, will have a limited market.
 Growing use of smartphones and tablets will lower demand for Apple’s popular personal
computers.
 Apple’s proprietary operating system can limit the variety of applications available to
smartphone users.
 The growing capabilities of cyber criminals make Apple’s systems less secure and take
away one of its strongest competitive advantages: its reputation for high levels of security
and safety.
 Legal Factors on Apple

 Apple has recently entered the highly regulated financial services sector via Apple Pay.
This could increase the level of regulation and government oversight it faces.
 By offering financial services, Apple could face increased levels of litigation.
 News reports indicate that Apple is planning to enter another highly-regulated sector:
automobile manufacturing. Entering the auto business could increase regulatory, insurance
and litigation costs at Apple.
 Apple depends on a variety of products covered by intellectual property laws, such as
software and music, for much of its income. This leaves the company highly vulnerable to
both piracy and litigation.

Environmental Factors on Apple

 The biggest environmental issue facing Apple is the disposal of used or nonworking
electronic devices. The expense of disposing of devices, particularly those containing
lithium batteries, could be high. Apple could be forced to assume that expense because of
concerns about such devices in landfills.
 Pollution and other environmental side effects from manufacturing facilities in China are
a growing concern. This could lead to increased regulation and higher manufacturing costs
at some point in the future.
 China’s efforts to cut greenhouse gases and limit fossil fuel use could increase electricity
rates and manufacturing costs for Apple in that country.
 Climate change created by global warming could disrupt transoceanic shipping and
Apple’s supply chain.
 Concern about energy use and other side effects from data centers could lead to increased
regulation and costs.
 Apple is highly vulnerable to increases in electricity costs because of its dependence on
data centers and other Internet infrastructure.

Conclusion

Apple should be able to thrive in spite of these challenges because it has demonstrated an
impressive ability to adapt to a changing environment. In particular, Apple’s research and design
capabilities give it an advantage that should propel its revenue growth for decades to come

10.Porter’s Five Forces Model

Porter’s Five-Forces Model of competitive analysis is a widely used approach for

developing strategies in many industries. The intensity of competition among firms varies
widely across industries (David, 2019).
 a. Porter’s Five Forces Model for APPLE Inc.

Porters Five force Model is a very powerful tool to understand the core of the power in a
business or in a company. The Porter Five Force Model for Apple Inc. is shown below:

Apple’s strategies are partly based on the need to address forces in the external business
environment. These forces can limit or reduce the firm’s market share, revenues, profitability,
and business development potential. This Five Forces analysis, based on Porter’s framework,
points to the following strengths or intensities of external factors in Apple Inc.’s industry
environment:

1. Competitive rivalry or competition: Strong force

2. Bargaining power of buyers or customers: Strong force
3. Bargaining power of suppliers: Weak force
4. Threat of substitutes or substitution: Weak force
5. Threat of new entrants or new entry: Moderate force

Considering the five forces, Apple must focus its attention on competitive rivalry and the
bargaining power of buyers. This external analysis supports the company’s current position of
continuous innovation. Through rapid and continuous innovation, Apple effectively addresses
the five forces in its external environment, although much of the company’s effort is to
strengthen its position against competitors and to keep attracting customers to Apple products.
 An applicable recommendation is to intensify research and development for innovation to
develop novel products that will complement the iPhone, the iPad, and other existing product

Competitive Rivalry or Competition with Apple (Strong Force)

Apple faces the strong force of competitive rivalry or competition. This component of Porter’s
Five Forces analysis model determines the intensity of the influence that competitors have on
each other. In Apple’s case, this influence is based on the following external factors:

1. High aggressiveness of firms (strong force)

2. Low differentiation of products (strong force)
3. Low switching cost (strong force)

Companies like Samsung and LG aggressively compete with Apple. Such aggressiveness,
observable in rapid innovation, aggressive advertising, and imitation, impose a strong force in
the industry environment. Moreover, in terms of product differentiation, available products in the
market are generally similar in fulfilling specific purposes. For example, many popular apps are
available for Android and iOS devices, and cloud storage services from different companies are
available to iOS users. In Porter’s Five Forces analysis model, this condition creates a strong
force by making it easy for customers to switch to other sellers or providers. On the other hand,
the low switching cost means that it is easy for customers to switch from Apple to other brands,
based on price, function, accessibility, network externalities, and related concerns. The
combination of these external factors in this part of the Five Forces analysis leads to tough
competitive rivalry that is among the most significant considerations in Apple’s strategic
management.

Bargaining Power of Apple’s Customers/Buyers (Strong Force)

The bargaining power of buyers is strong in affecting Apple’s business. This component of
Porter’s Five Forces analysis model determines how buyers’ purchase decisions and related
preferences and perceptions impact businesses. In Apple Inc.’s case, buyers’ strong power is
based on the following external factors:

1. Low switching cost (strong force)

2. Small size of individual buyers (weak force)
3. High buyer information (strong force)

It is easy for customers to change brands, thereby making them powerful in compelling
companies like Apple to ensure customer satisfaction. On the other hand, each buyer’s purchase
is small compared to the company’s total revenues. Porter’s Five Forces framework indicates
that this condition makes customers weak at the individual level. However, the availability of
detailed comparative information about competing products’ features empowers buyers to shift
from one provider to another. This external factor enables buyers to exert a strong force on
Apple and other brands. Thus, this part of the Five Forces analysis shows that Apple must
 include the bargaining power of buyers or customers as one of the most significant strategic
variables in the business.

Bargaining Power of Apple’s Suppliers (Weak Force)

Apple Inc. experiences the weak force of the bargaining power of suppliers. This component of
Porter’s Five Forces analysis model indicates the influence of suppliers in imposing their
demands on the company and its competitors. In Apple’s case, suppliers have a weak bargaining
power based on the following external factors:

1. Moderate to high number of suppliers (weak force)

2. Moderate to high overall supply (weak force)
3. High ratio of firm concentration to supplier concentration (weak force)

The global size of its supply chain allows Apple Inc. to access many suppliers around the world.
In Porter’s Five Forces analysis context, the resulting high number of suppliers is an external
factor that presents only a weak to moderate force against the company. In relation, the moderate
to high overall supply of inputs, such as semiconductors, makes individual suppliers weak in
imposing their demands on firms like Apple. Also, the ratio of firm concentration to supplier
concentration further limits suppliers’ power and influence in the industry. This external factor
reflects the presence of a small number of big companies like Apple and Samsung, in contrast to
a larger number of medium-sized and big suppliers. Thus, this part of the Five Forces analysis
shows that the bargaining power of suppliers is a minor issue in developing Apple Inc.’s
strategies for supply chain management, value chain effectiveness, innovation, and industry
leadership.

Threat of Substitutes or Substitution (Weak Force)

The competitive threat of substitution is weak in affecting Apple Inc.’s computing technology,
consumer electronics, and online services business. This component of Porter’s Five Forces
framework determines the strength of substitute products in attracting customers. In Apple’s
case, substitutes exert a weak force based on the following external factors:

1. Moderate to high availability of substitutes (moderate force)

2. Low performance of substitutes (weak force)
3. Low buyer propensity to substitute (weak force)

Some substitutes to Apple products are readily available in the market. For example, instead of
using iPhones, people can use digital cameras to take pictures, and landline telephones to make
calls. In Porter’s Five Forces analysis model, this external factor exerts a moderate force in the
industry environment. However, these substitutes have low performance because they have
limited features. Many customers would rather use Apple products based on convenience and
advanced functions. This condition makes substitution a weak force in impacting the company’s
business. Also, buyers have a low propensity to substitute. For instance, customers would rather
use smartphones than go through the hassle of buying and maintaining a digital camera, a
 cellular phone, and other devices. This part of the Five Forces analysis shows that Apple does
not need to prioritize the threat of substitution, specifically in management decisions in business
processes like marketing, market positioning, and product design and development.

Threat of New Entrants or New Entry (Moderate Force)

Apple Inc. experiences the moderate force of the threat of new entrants. This component of
Porter’s Five Forces analysis model indicates the effect and possibility of new competitors
entering the market. In Apple’s case, new entrants exert a moderate force based on the following
external factors:

1. High capital requirements (weak force)

2. High cost of brand development (weak force)
3. Capacity of potential new entrants (strong force)

Establishing a business to compete against firms like Apple Inc. requires high capitalization.
Also, it is extremely costly to develop a strong brand to compete against large companies like
Apple. These external factors make new entrants weak. However, there are large firms with the
financial capacity to enter the market. For example, Google has already done so through products
like Nexus smartphones. Samsung also used to be a new entrant. These examples show that there
are large companies that have the potential to directly compete against Apple Inc. Thus, the
overall threat of new entry is moderate. This part of the Five Forces analysis shows that Apple
must maintain its competitive advantage through innovation and marketing to remain strong
against new entrants’ moderate competitive force.

Key Factors of Success (KFS) of Apple Inc

These three factors led to this colossal milestone

1. Breaking down the barriers of customer segments.

An interesting observation of the United States and similar countries is that people on both

extremes of the social class spectrum carry the same cell phone. That phone is, of course,
the iPhone.

Looking past some of the common pressures of consumerism, much of Apple becoming a

worldwide phenomenon has to do with the way they market their products; both in the past and
today. Most prominently, Apple’s view of their target customers was never restricted by
demographic, certain characteristics or anything else that divides the market. Simply put, their
target customer is everyone. This is why the term “user-friendliness” is one of the defining traits
of each of Apple’s products.

Going further, their mainstream ads and marketing content seldom uses fancy tech jargon
about the product specs. Their messaging is meant to be understood by people of all ages and
backgrounds. They focus on features that immediately affect the average user, such as the
camera resolution, screen display, storage space, fingerprint identification, etc.

By not breaking their customers up into strictly defined segments, Apple’s marketing has been
appealing to generations of users, which has led to company’s stock rising 15,000 percent since
the turn of the millennium.

Related: Apple's Board Says Tim Cook Has to Fly Private From Now on 'in the Interests of
Security and Efficiency'

2. Creating a brand culture.

Apple has a devoted following unlike any other brand in the world. Apple has become much
more than just a brand. A long history of producing high quality products that everyone can use
has spawned a brand culture that has become so ingrained in everyday life that many faithful
Apple consumers wouldn’t deviate from the products in a million years.

This all started back in the early 1980’s, right when the concept of having a home computer was
just beginning to gain traction. Steve Jobs donated 9,000 Apple computers to California
schools -- which many people thought was crazy. In addition to the tax benefits, the marketing
strategy behind this was pure genius. Jobs’ goal was to leverage his “Kids Can’t Wait” program
to familiarize school children with Apple products’ usability before they got their own computer.
This, in many ways, was the origin of Apple's brand culture.

Fast forward to now. There are countless consumers out there who were raised using these
computers in school. They won’t use anything else, no matter what the technical aspects are.

Related: How Steve Jobs Blew Up the Rules of Branding

3. Never fighting price wars.

Many brands assume that price wars are just a part of industry competition. This was never the
case with Apple. Throughout the years, they stuck to their pricing models despite being
significantly higher than competitors’.

For example, let’s take Apple’s MacBook Pro 13 and compare it to the HP’s Spectre 13 (which
are some of the latest models of each brand, respectively). While the specs are similar and each
model has their own unique set of pros and cons, the MacBook Pro costs about $800 more.

Why is this? Apple simply does not see other brands in their market as competition.

Instead of trying to entice customers with low prices and win a “race to the bottom,” Apple
blocked out the noise of what their competitors were doing and focused on promoting their
unique value proposition -- beautiful design and a seamless customer experience right out of the
box.
 10. External Audit

An External Factor Evaluation (EFE) Matrix allows strategists to summarize and

evaluate economic, social, cultural, demographic, environmental, political,
governmental, legal, technological, and competitive information (David, 2011).

a. Factors Evaluation (EFE) for Apple:

EFE Matrix

11. Competitive Profile Matrix

The Competitive Profile Matrix (CPM) identifies a firm‟s major competitors and its
particularstrengths and weaknesses in relation to a sample firm‟s strategic position
(David, 2011).

a. CPM for APPLE Inc.

Model 3: Showing CPM for APPLE Inc.
12. Internal Audit

All organizations have strengths and weaknesses in the functional areas of business.
No enterprise is equally strong or weak in all areas (David, 2011).

a. Internal Audit for APPLE Inc.

 i. Internal Environment

VRIO framework

The VRIO framework can be stated as the value, rarity, imitablity, and organization as a
whole.

VRIO framework is extremely important for the internal analysis of Apple Inc organization.

Resources and Value Rarity Imitability Organization Competitive

Competencies Advantage
Brand Name Yes Yes Yes Yes Sustained
Simplicity Yes No No Yes Parity
Hardware Yes No Yes Yes Temporary
Software Yes No No No Parity

Model 4: Showing VRIO for APPLE Inc.

The above figure shows the VRIO framework for Apple Inc. For gaining competitive lead
over its competitors Apple Inc should explore its internal as well as the external advantages,
its internal advantages that Apple Inc paid attention to on developing iPhone, are its brand
name, advanced technology, and effortlessness of using the user interface (Applecasestudy,
2009).

Value

The value of iPhone is that there are a number of advantages, like the highest technology, the fast
and the easy usage, that the user can carry, all in one device when he/she purchases the iPhone.

Rarity

The technology that has been used in making of the iPhone is rare and unique, which is why it
has a unique design, quality, easy to use and is also a status symbol among the youngsters
however, it has been experiencing slow internet connection and call dropping problems, which
can make Apple Inc lose some customers, which was found to be a problem in the chip that
handled the call operations, meanwhile the publicity and status of owning an iPhone will keep
the customers intact.

Imitability

The iPhone is nearly not imitable, however there are some phones available in the market which
provides some of the features same as that of the iPhone, also, the companies which have seen
the flaws in the iPhone development can refrain from committing it and thus can come up with
better designs, which can be a threat to Apple Inc. For e.g. Google has released its phone T-
Mobile G1, which can be a competition to iPhone in the future

Organization

Apple has tried its best to maintain its brand name and has been successful in doing so and thus
is its biggest competitive advantage, however its flawless designs and quality are still replicable
in the future and thus Apple should take advantage of applications market, however as with
iTunes which were the best and easiest music application, same approach would not work with
iPhone.

Thus, Apple holds a huge and stable market however it constantly needs to update on its methods
and technologies to grow further.

13. Internal Factors Evaluation Matrix

A summary step in conducting an internal strategic-management audit is to construct anv

Internal Factor Evaluation (IFE) Matrix. This strategy-formulation tool summarizes and
evaluates the major strengths and weaknesses in the functional areas of a business, and it also
provides a basis for identifying and evaluating relationships among those areas.
Key Internal Factors Weight Rating Weighted Score
Strengths

iTunes Music Store is a good source of 0.15 4 0.60

revenue, especially with the iPod and
the availability on Windows platform.

Apple‟s niche audience provides the 0.10 3 0.30

company with some insulation from
the direct price competition.

Revamping desktop and notebook 0.10 3 0.30

lines.

Low debt—more maneuverable. 0.06 4 0.24

Developing own software and 0.14 3 0.42

hardware.

Good brand loyalty. 0.05 3 0.15

Web technology can be used to 0.10 4 0.40

improve product awareness and sales.

Weaknesses

Dependency on new product launches. 0.06 1 0.06

Weak presence in business arena. 0.07 1 0.07

Slow turn around on high demand 0.03 2 0.06

 products.

Weak relationship with Intel and 0.10 1 0.10

Microsoft.

Weak presence in markets other than 0.04 2 0.08

education and publishing.

Total 1.00 2.78

SWOT Matrix

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Matrix is an important matching tool

that helps managers develop four types of strategies: SO (strengths-opportunities) Strategies,
WO (weaknesses-opportunities) Strategies, ST (strengths-threats) Strategies, and WT
(weaknesses-threats) Strategies (David, 2011).

a. SWOT Matrix for APPLE

S-O Strategies

• Increase awareness through the web of the immunity of Mac products to worms and
viruses. (S5, O1)

• Advertise using individuals that will link Generation X & Y to the iTunes and other
related products. (S1, O2, O4, O5, O6)

• Using movies and music groups that are geared towards Gen X and Y to promote
computers and laptops. (S3, S5, O2, O5, O6)

S-T Strategies

• Increase and promote the compatibility to Window operating system. (S5,T1)

 • Promote the originality of Apple computers and the different style and stable system
that is slightly more but worth the price difference in style, stability and speed. (S2, S5,
T2, T4, T5)

W-O Strategies

• Increase ties with Microsoft and Intel and their products.(W1, W2, W4 O2, O3)

• Promote to business the safety of having a worm and virus free computer by using
Mac. (W2, W4, O1, O5, O6)

W-T Strategies

• Improve relationship with Microsoft and Intel so that companies will see them
as compatible. (W1, W2 T1)

• Increase productivity and turn around of high demand products to compete with Dell
and HP (W5, T2)

15. The Strategic Position and Action Evaluation (SPACE) Matrix

The Strategic Position and Action Evaluation (SPACE) Matrix is four-quadrant framework
indicates whether aggressive, conservative, defensive, or competitive strategies are most
appropriate for given organization. The axes of the SPACE Matrix represent two internal
dimensions (financial position [FP] and competitive position [CP]) and two external
dimensions(stability position [SP] and industry position [IP]). These four factors are perhaps
the most important determinants of an organization ‟s overall strategic position (David, 2011).

15.1 SPACE Matrix for APPLE

Model 6: Showing SPACE Matrix for APPLE Inc.

16. BCG Matrix

When a firm‟s divisions compete in different industries, a separate strategy often must be
developed for each business. The Boston Consulting Group (BCG) Matrix is designed
specifically to enhance a multidivisional firm‟s efforts to formulate strategies (David, 2011).

a. BCG Matrix for APPLE

Model 7: Showing BCG Matrix for APPLE Inc.

17. Internal External Matrix

The IE Matrix is similar to the BCG Matrix in that both tools involve plotting organization
divisions in a schematic diagram; this is why they are both called “portfolio matrices.” (David,
2011).

a. IE Matrix for APPLE

Model 8: Showing IE Matrix for APPLE Inc.

18. Grand Matrix

The Grand Strategy Matrix has become a popular tool for formulating alternative strategies. All
organizations can be positioned in one of the Grand Strategy Matrix‟s four strategy quadrants.
A firm‟s divisions likewise could be positioned (David, 2011).

19. The Quantitative Strategic Planning Matrix (QSPM)

The Quantitative Strategic Planning Matrix (QSPM), which comprises Stage 3 of the strategy-
formulation analytical framework. This technique objectively indicates which alternative
strategies are best (David, 2011).

a. QSPM for APPLE

Model 9: Showing QSPM for APPLE Inc.

Apple Long Term Objectives (LTOs)

 Technology

One way in which they matter is that they serve to prove Apple continues to invest in the
development of cars, smart wearables and the long-anticipated Apple Glasses, To create a
vehicle that defines transportation in the same way the iPhone defined mobile.

 Degree of Diversification
You can find an Apple product in most areas of the world and that is certainly the overall goal
for global business. However where there is product demand there must be supply. Expand
nationwide chain of Apple stores globally.
The Apple store accounts for the majority of the company’s sells. Therefore there must be more
stores to increase sells substantially., Strategy- Begin placing stores in all large markets and
expand outward based on population and demand of products.

 Competitive position
Make products available in every other possible retail channel, ex. Online, Big Box
retailer ,Even though the Apple store leads in sells, Apple must make sure it’s products
are accessible to every consumer since their demand is so high. Strategy- Place products
in every retail store that carries electronic devices, all e-commerce web sites, and make
sure mobile devices are featured on every large mobile carrier.

 Growth in sales
With every premium branded product there will come a premium price. It’s to be
expected that the big name brands that present superior quality will bring the highest
price.

1- Enter and sustain premium pricing while attempting to gain market share.As long as
their products are cutting edge consumers will have no problem paying more for them.
It’s important this trade off does not subside in order for the premium pricing to be
sustained. Strategically price all products at the top of the market base price relying on
brand and quality to offset the price differential.

2. Increase profit margins, even with a high or low share of the market it’s your margins
that make or break you. Apple has great margins but a low market share across the board
due to competitors low price points. Continue push to lower cost to make products while
sustaining the same retail price in the market.

 Customer Retention
Apple have been historically far more competent than other brands in emotion-driven
marketing. ‘Marketing’ in the broadest sense - from product strategy and product design,
to advertising, sales and after-sales experience. By addressing feelings, rather than
rational comparison of performance specs or prices, Apple succeeded in superior
engagement and bond with customers, comparable to religion. To religious fanatics, if
you want: because Apple fans would go into a fight for their brand but never switch
despite (often rational) arguments in favour of another product. In books and conference
speeches another example of such unconditional loyalty is often Harley Davidson and it
is hard to find too many other examples, because building such a brand is as much magic,
as it is art and science.

With emphasis on design (an aspect highly appealing to emotions, rather than technology
engaging the rational mind), everything since the ‘Think Different’ campaign and the
iMac (thank you, Jony Ive, for all that followed) - has been persistent and meticulous
building of the religion of Apple.
 Grocery stores will give you ‘loyalty’ cards and reward points for retention, airlines do it
with frequent-flyer miles. Apple never tried to bribe customer loyalty with such tricks. If
anything, the opposite would happen: loyal customers would often pay to remain loyal
(higher price, or a sleepless night in front of a store before product launch). Just like a
church doesn’t pay bonus points and discounts to bring the congregation to Sunday
service, and worshippers pay tithes and offerings as a humble manifestation of
faithfulness.

Note - all this would never work, if you had an inferior, disappointing product. You need
to be above average in technical specs and performance, and you need to
be affordably expensive, otherwise no magic can save you from customer wrath. But you
don’t need to be ‘competitively priced’ or always have the very best-in-class specs (in
fact, Macs have sometimes been outperformed by W-Intel PCs, and iPhones - by flagship
Android models) - it doesn’t matter! Objective comparisons do nothing for
the emotions and those thrive on things too different from dollar discounts and megapixel
counts.

Having said all this, we are witnessing a bit of a decline in Apple’s ability to engage with
the customers’ emotional side. Design, sadly, is no longer a differentiator - novelty and
elegance easily wear off, and can also be easily copied. With every Huawei and Samsung
phone looking like and iPhone, we haven’t seen anything new from Apple to make our
pulse race (and the departure of Jony Ive does not help with this challenge). Current
leadership has successfully steered Apple to engage with Wall Street and shareholder
wallets, but not as much with people’s hearts and souls. Apple is a most valuable brand
(for revenues, profits and market capitalisation), but - surprisingly (!) not a
most loved brand. Not even in the top 10 and top 20 most loved brands, in fact: There's a
new list of America's 25 most loved brands. Apple isn't on it | ZDNet Cynics would say -
who cares about love, when we’re making such crazy money - but for a brand built
on love this may be a critical time. We like to hope Apple will find new ways to continue
retaining its customers - and their unconditional commitment to the brand.

20. Finance/ Accounting

Financial condition is often considered the single best measure of a firm’s competitive
position and overall attractiveness to investors. Determining an organization “s financial
strengths and weaknesses is essential to effectively formulating strategies.

Financial Ratios for APPLE

Sale Ratio
Apple Liquidity Ratio
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Liquidity ratio Description The company

A liquidity ratio Apple Inc.’s current

calculated as ratio improved from
Current ratio current assets 2018 to 2019 but then
divided by current slightly deteriorated
liabilities. from 2019 to 2020.

A liquidity ratio
calculated as
Apple Inc.’s quick
(cash plus short-
ratio improved from
term marketable
Quick ratio 2018 to 2019 but then
investments plus
slightly deteriorated
receivables)
from 2019 to 2020.
divided by current
liabilities.
A liquidity ratio
calculated as Apple Inc.’s cash ratio
(cash plus short- improved from 2018
Cash ratio term marketable to 2019 but then
investments) slightly deteriorated
divided by current from 2019 to 2020.
liabilities.

Apple Profitability Ratio

Profitability ratio Description The company

Gross profit margin Apple Inc.’s gross profit

indicates the margin ratio deteriorated
percentage of from 2018 to 2019 but
Gross profit margin
revenue available to then improved from 2019
cover operating and to 2020 not reaching 2018
other expenditures. level.
Apple Inc.’s operating
A profitability ratio
profit margin ratio
Operating profit calculated as
deteriorated from 2018 to
margin operating income
2019 and from 2019 to
divided by revenue.
2020.
An indicator of
Apple Inc.’s net profit
profitability,
margin ratio deteriorated
Net profit margin calculated as net
from 2018 to 2019 and
income divided by
from 2019 to 2020.
revenue.

Apple leverage Ratio

Apple Inc (AAPL) Leverage Ratio: 4.25 for the quarter ended September 26th, 2020
Since the quarter ended June 27th, 2009, Apple Inc's leverage ratio has increased from 1.86 to
4.25 as of the quarter ended September 26th, 2020.

 From 2009 to 2020 Apple Inc's highest quarterly leverage ratio was 4.25
 Apple Inc's lowest leverage ratio during that period was 1.45
 Apple Inc's average leverage ratio for each quarter from 2009 to 2020 Apple Inc's was
2.20
 Apple Inc's leverage ratio during the Trailing Twelve Month (TTM) period was $15.10
  Apple Inc's leverage ratio during the quarter ended September 26th, 2020 of 4.25 was
higher than its peers in the Electronic Equipment industry group during the quarter ended
September 30th, 2020 of 3.53. From June 27th, 2009 to September 26th, 2020, Apple
Inc's average leverage ratio was 2.20 compared to an industry average of 2.97

Apple leverage Ratio

Apple Inc (AAPL) Inventory Turnover: 41.52 for the quarter ended September 26th, 2020
Since the quarter ended September 26th, 2009, Apple Inc's inventory turnover has decreased
from 53.28 to 41.52 as of the quarter ended September 26th, 2020.
  From 2009 to 2020 Apple Inc's highest quarterly inventory turnover was 112.12
 Apple Inc's lowest inventory turnover during that period was 25.53
 Apple Inc's average inventory turnover for each quarter from 2009 to 2020 Apple Inc's
was 57.23
 Apple Inc's inventory turnover during the Trailing Twelve Month (TTM) period was
$165.00

Apple Inc's inventory turnover during the quarter ended September 26th, 2020 of 41.52 was
lower than its peers in the Electronic Equipment industry group during the quarter ended
September 30th, 2020 of 265.02. From September 26th, 2009 to September 26th, 2020, Apple
Inc's average inventory turnover was 57.23 compared to an industry average of 41.61.
Apple Inc 's ability to collect accounts receivable sequentially detoriated to 14.53, but
remained above company average. Average collection period, for Apple Inc 's accouts
receivable remained unchanged at 25 days, in the Mar 28 2020 quarter.

Within Technology sector 50 other companies have achieved higher receivables turnover

ratio. While receivables turnover ratio remained unchanged compare to previous quarter at
no. .
 21. Conclusion

It is concluded from the strategic management analysis at APPLE Inc. that technological
industries are never easy to compete with. They have a lot invest at R&D and have to be
proactive in order to compete with their competitors in the industry. As for APPLE is concerned
they have been working so well as it is shown form their products. As Apple Inc. is increasing
also, those other businesses are increasing and trying to do something interesting for their own
good. APPLE needs to make a drastic change. They don’t need to wait for people buy their
products only when they are on sale but they need to focus more on the customer support and
improve the areas they already have problems.
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