Apple Inc.

Strategic Plan

Executive Summary
Apple, Inc. is a well-known company that has continued to expand their products and services in the
past few years. This strategic plan is going to take a closer look into Apple, Inc. as a company and
how they have become so successful. This plan will also discuss the company's history, the products,
and the services they offer, and how the company operates and sets goals. Apple, Inc. has a vision
for their company and a mission statement that is of high importance to them. A SWOT analysis is
also going to be analyzed in this strategic plan, along with looking at some of Apple’s competitors and
their financial outlook for the future.

Company Overview
Apple, Inc. is a company that started out by producing both business and personal computers, along
with iPods and eventually started expanding their products. The company was founded in 1976 by
Steven Wozniak and Steve Jobs and was originally called Apple Computers, Inc., which is now
known as Apple, Inc. (CNN Library, 2018). Apple, Inc. started as a computer company, and as
technology and the digital world has continued to evolve, so did the company. Apple began to expand
their products by incorporating iTunes music store, the iPod, and eventually incorporating the iPhone.
Apple, Inc.’s headquarters is located in Cupertino, CA, but the company has about 506 stores in
about 24 different countries, with 272 being in the United States (Apple Stores, 2018). The evolution
of the company can be seen in the next section covering the company history.

Company History
Apple, Inc. was originally called Apple Computers, Inc. and was founded by Steve Jobs on April 1,
1976 (Richardson & Terrell 2008). The company was started from Steve Jobs’ garage where Jobs’
and Steve Wozniak began building the Apple I and then the Apple II computer, but it wasn’t until 1980
when the company actually went public due to the high level of sales and money that was coming in
(Richardson & Terrell, 2008). Throughout the next few years the Lisa computer was put on the
market, which later was discontinued, and then the Macintosh computer was created. Steve Jobs
temporarily left the company, returning in 1997 as the CEO, and in 1998 the very popular iMac
personal computer was developed and put on the market for customers (CNN Library, 2018). In the
following years, the company would introduce the iTunes music store, different types of iPods, new
iMac and other computers, and eventually releasing the iPhone in 2007. What’s interesting about the
company is that the company also started to market their very own Apple TV, the iPad, and the iCloud
which offers online storage for personal or business use (CNN Library, 2015). As the company
continued to expand their products, the company’s revenue shot up, making the company one of the
most competitive companies out there. In 2014, Apple released the Apple Watch, and in 2015 Apple
Music became a popular live radio station for customers to utilize (CNN Library, 2015). While not
every product is unique and offers different features to customers, each has been successful in their
own way, bringing in quite a bit of revenue for the company.

Products and or services

As described briefly earlier, Apple Computers, Inc. originally only focused on computers, and making
them efficient for people to use in their office and at home. Over the years, the company has
continued to evolve when it comes to the type of products it offers to customers. For example, in 1998
the Macintosh 128K: the iMac was released which produced a high level of revenue, allowing the
company to purchase other companies and continue creating and testing new products (Apple Inc.,
n.d.). Fast forward up to date the company now offers Mac’s, iPads, iPhones, iPods, watches,
televisions, and music stations as mentioned earlier.

Apple’s most successful product is the iPhone which has not only attracted more customers to the
company but has also significantly helped the company with the revenue that it has pulled in over the
years. The iPhone was a costly product to invest in, roughly $150 million to create, but within the first
few months of the iPhone being on the market, the company made about $51.1 billion from 74.4
million iPhones that were sold (Williams-Grut, 2015). This investment was well worth it, and it has
been a great source of revenue for the company ever since it was created.

Operations
Operations are one of the most important things for a company to have in place. Operations can be
described as a process that focuses on production and tracks the process of the finished product to
customers (Unnamed Author, 2015). In order for operations to run smoothly, there are several
different individuals and departments within the company that assist with this process. Figure 1
provides an overview of the company’s organizational structure and how the departments work
together to make sure the company operates and delivers properly. The Sales Planning and
Operations department focuses on the production process from start to finish; for example, they focus
on customer service, planning, the execution of the plan, and the operation process behind a sale
(Operations, n.d.).

Lariviere (2011) discusses how Apple, Inc. receives discounts on air freight, parts, and manufacturing
capacity, and is in charge of most of their supply chain which leads to innovation. Lariviere (2011)
also mentions that Apple's operations are extremely vital to the company being able to carry out their
strategy and plans. As mentioned earlier, the operation process is what carries out customer
interactions, sales, production, deliveries, and much more. Without a proper operation process in
place, Apple would not succeed. Organization within operations is important in order to make sure
each of the correct steps are made and accomplished. Apple, Inc. operates by planning ahead of their
competition, placing bets on production technologies, and working closely with suppliers (Lariviere,
2011).
Vision
Every person typically has a vision for the company they are looking to start. A vision statement can
be described as the company’s aspirations and hopes of where they want to go in the future
(Unknown Author, 2015). Apple Inc.’s vision statement is quite lengthy; however, it can be
summarized as the company continuing to evolve, and wanting to create and provide great products
for their customers, and saying no to projects that don’t fall in line with what’s important to the
company (Rowland, 2018). It appears as if Apple has held up to their vision due to their ability to
produce new products over the last few years and evolving to the digital market.

Mission Statement
A mission statement’s goal is to help capture the company’s identity and explain who they are, what
they do, and what they hope to accomplish (Unknown Author, 2015). Apple, Inc.’s mission statement
is:

Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and
professional software. Apple leads the digital music revolution with its iPods and iTunes online store.
Apple has reinvented the mobile phone with its revolutionary iPhone and App store and is defining the
future of mobile media and computing devices with iPad. (Rowland, 2018)

Apple, Inc.’s mission is to touch multiple different markets and clients. It appears that the company
has accomplished this mission in many ways with their products, services, and the number of
locations the company operations business. However, there is always room for improvement when it
comes to either the products the company offers or the service that is provided to customers.

Corporate Values & Culture

A company’s core values are their beliefs and principles in which they operate their business. Steve
Jobs built Apple, Inc. into a company that specifically focuses on supporting people who have a
passion, and who are looking for a way to change the world by using it somehow (Think Marketing,
2016). Another core value of the company is to make and sell the best products possible, and to
always be looking to develop new products and continue with innovation (Think Marketing, 2016). The
company has produced many great products since it started; for example, it has developed the iPad,
iPod, and iPhones, all of which have been extremely successful for the company.

Apple, Inc.’s corporate culture can be described as an organizational culture which plays a major role
in the company’s success. Apple’s culture emphasizes their innovation and the importance of
creativity (Meyer, 2018). For the corporate culture, Apple tends to focus on five main characteristics,
such as Moderate combativeness, creativity, secrecy, innovation, and top-notch excellence (Meyer,
2018). As a company, Apple has continued to grow and expand their products and services. Due to
the company's ability to be so consistent with their creation of new products, their corporate culture
could be said to be very organized and strong (Unnamed Author, 2015).
SWOT Analysis
A SWOT analysis is a tool that helps a company take a closer look at their business by analyzing their
strengths, weaknesses, opportunities, and threats (Unknown Author, 2015). A SWOT analysis can be
a great process to conduct frequently in order to understand where the company stands, whether it’s
in a positive or negative spot. See below for a SWOT analysis conducted for Apple, Inc.

Strengths

According to Khan, Alam, and Alam (2015), one of Apple Inc.’s biggest strengths and successes was
expanding their products to more than just computers, which has assisted in bringing in tremendous
sales growth. Since the beginning of Apple Inc., the company has continued to grow and expand, and
they have created a strong brand image, high-profit margins, and effective rapid innovation processes
(Smithson, 2018). The company has also established both horizontal and vertical integration which
leads them to have some competitive advantages that other companies don't have.

Weaknesses

According to Smithson (2018), Apple Inc. does have some weaknesses, such as they have a limited
network when it comes to distribution, the company’s prices are typically on the higher side, and the
company is pretty dependent of the sales on high-end market segments. Apple is mostly known for
their iPad and iPhone products which can be a great branding opportunity, but it can also be a
disadvantage because it can lead to some risks for the business (Apple Inc, 2015). Companies that
have a smaller amount of products run the risk of hitting their peak when it comes to marketing those
products and can eventually struggle financially. In order to bring in more revenue, the company
might need to revise current products or create new ones in order to be successful.

Opportunities

Within the last few years Apple Inc. has shown to be a very powerful company when it comes to the
opportunities that have come their way, and the quality of products they have been able to produce.
According to Eassa (2018), Apple Inc. has several growth opportunities coming up in the future due to
how successful the company has been, and due to the amount of money, the company makes. In
2017 alone the company made roughly $230 billion in revenue and about $50 billion in net income
(Eassa, 2018). The Apple Watch has proven to be very successful in 2017, which means it provides
an opportunity for more features and expansion to happen in the near future (Eassa, 2018). Other
growth opportunities involve Apple Inc.’s audio products and their services; for example, with Apple’s
audio products there are opportunities for more Beats products to be created, different types of
headphones and earphones to be invented, and for the newest product, the Homepod, to be
improved and promoted (Eassa, 2018).
Apple Pay is another semi-new mobile payment service that the company launched in 2014 which
works on some of the company’s newest iPhones. This feature is projected to provide new
opportunities and growth for Apple, Inc. as time goes on. Cell phones have continued to evolve, so
Apple has the opportunity to continue their development and expansion of the iPhone and/or
smartphone.

Threats

One of Apple’s biggest threats is the competition that the company faces. The next section of this
paper will go into more depth regarding the competition that Apple faces, but the company faces big
competitors such as Google, Samsung, and even Microsoft (Apple Inc, 2015). In addition to these
competitors, Apple also faces threats overseas due to other countries expanding their own companies
that are similar in nature to Apple. India has very strict laws when it comes to operating business
there, so this causes some issues for Apple to establish a location to sell their products (Apple Inc,
2015).

Competition

While Apple, Inc. is a very successful company, they still face competition like any other company.
According to Bhasin (2017), Apple’s top 5 competitors are Dell, Lenovo, Samsung, Hewlett Packard,
and Microsoft. Each of these companies holds different reasons as to why they are strong
competitors for Apple, but Dell is known for competing with Apple when it comes to their computers
and/or laptops. Lenovo competes with Apple because the company has many similar products, such
as laptops, smartphones, and even tablets (Bhasin, 2017). Samsung is one company that many
consumers are familiar with due to the fact that the company offers a variety of products. Apple is in
direct competition with Samsung when it comes to their smartphones; for example, the Galaxy and
the Note are two of the most popular Samsung phones, which has had an effect on iPhone sales
(Bhasin, 2017). Hewlett Packard is another popular company that focuses on selling desktop
computers, laptops, printers, scanners, and other computer related items. According to Bhasin
(2017), HP Inc. is one of Apple’s strongest competitors when it comes to the Macbook and other
laptops. The last major competitor is the Microsoft Corporation which extremely well known by
consumers, especially those that are utilizing a computer to do any work on Microsoft Word, Excel, or
PowerPoint. What is actually quite interesting is that while Microsoft is considered to be Apple Inc.’s
competitor, many Apple computers are ran using the Microsoft operating system (Bhasin, 2017). One
thing that Microsoft has over Apple is the fact that the company has created software for video
games, along with other products such as the Xbox.

These five companies are only the top 5 competitors that Apple, Inc. faces daily, but there are a lot
more. For example, the company also faces competitors such as Sony, Asus, Acer, Toshiba, and
Pixel (Bhasin, 2017). One way that Apple, Inc. can remain competitive in the electronic, smartphone,
computer market is to stay on top of the market trends and listen to what their customers are saying.

Management Team/Leadership
Each company has a management team of some sort that assists in managing and running the
business. Initially, Apple started as a smaller company that didn’t require as many managers or
leaders, but since then has grown to be such a large company that it does need more people to assist
with running it. Tim Cook is the current Chief Executive Officer who is responsible for managing the
operations and sales of the company. Apple, Inc. also has many individuals who are on the Board of
Directors who assist the CEO in running the company and making sure that business runs smoothly
and efficiently. For example, the Senior Vice President, the Chief Design Officer, the Chief Operating
Officer, and the other Vice Presidents all report to and work under the CEO, Tim Cook. According to
Tim Cook, employees are sent through a thorough orientation process upon being hired which is
known as Apple University (Baer, 2015). Cook also mentions that it is up to the “company leaders to
set the tone” in order for the company to operate properly (Baer, 2015).

Financial Outlook
As previously mentioned, Apple has had a lot of success over the years as they continue to expand
and bring in new products. Market capitalization, profits per share, net profits, share price, and sales
led to the company’s income growth (Nicolas Marin Ximenez and Sanz, 2014). According to a recent
report from Apple, the company has been successful in 2018 with bringing in $62.9 billion for the
quarter, which ends up being about 20 percent higher than 2017 (Apple Reports, 2018). In the last
quarter of 2018, Apple’s CEO mentioned that the company was very satisfied to exceed their
quarterly expectations and hopes to attain their projections for the fiscal 2019 first quarter as well. In
the first quarter of 2019 the company hopes to gain revenue of $89 billion to $93 billion, have
operating expenses fall around $8.7 billion, tax rates to be around 16.5 percent, and their gross
margin to fall around 38 percent (Apple Reports, 2018). Figure 2 shows how the company has
continued to grow from 2016-2018 and also shows their projections for sales, EBITDA, operation
profit, pre-tax profit, net income, and more for the years 2019-2021 (Apple Reports, 2018). Apple's
value continues to grow and surprise investors, and on August 2, 2018, the company was one of the
very first American public companies to surpass $1 trillion in value (CNN Library, 2015). With this
recent news and the stability of the company, many investors will likely begin the invest in the
company if they aren’t already.

Strategies
Upon creating a company, the owners must discuss what type of strategies they are going to
implement in order to help the company grow, make it an enjoyable place to work, receive and retain
customers, and ultimately bring in revenue. A generic strategy can be defined as being one that has
steps to help put the company into a good position within the industry (Unnamed Author, 2015).
Going back to Apple’s mission statement, the company wants to continue to develop new products
while also working to enhance the current products they do have on the market. While Apple, Inc. is
working internationally, the company would like to continue to expand and establish more stores
overseas.

Conclusion
This strategic plan took a thorough look into the history of the Apple, Inc. company, the products, and
services that Apple, Inc. provides its customers, along with other examples of how the company
operates their business. This plan provides a quick overview of the management team, leadership
team, and the departments within the company. Apple, Inc. has had its struggles just like any other
company, but as a whole, it has continued to grow into a very successful business. The products that
Apple offers draw customers in due to the company’s ability to get ahead of the competition and
produce new products that appeal to consumers. Apple’s goal is to create a positive culture for their
employees, but also for their customers. With Apple’s strategic thinking and planning in place, along
with their high revenue projections for the years coming up, the company is on track to continue to be
successful.

References
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Appendix

Figure 1

[image: ]

Note: Organizational structure of Apple, Inc. Retrieved from https://research-methodology.net/apple-

organizational-structure-a-hierarchical-structure-that-may-change-in-near-future/

Figure 2

[image: C:\Users\Cayla PC\Downloads\FireShot\FireShot Capture 004 - Apple _ Financials, _ -

https___www.marketscreener.com_APPLE-4849_financials_.png]

Note: Annual Income Statement Data from 2016-2018 with projections for 2019-2021. Retrieved from
https://www.marketscreener.com/APPLE-4849/financials/

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