Apple Inc.

“How did Steve Jobs changed the world”

STUDY OF: INTRODUCTION SWOT MISSION VISION GOALS FINDINGS & RECOOMMENDATIONS

“If you haven't found it yet, keep looking. Don't settle. As with all matters of the heart, you'll know when you find it. And, like any great relationship, it just gets better and better as the years roll on.”STEVE JOBS

DONE BY:ZYAD AHMED DIRARFACULTY OF BUSINESS ADMIN.BU-2011-014UMST, SUDAN

Overview of the Organization

The company was founded on April 1, 1976, and incorporated as

Apple Computer, Inc. on January 3, 1977. The word "Computer" was

removed from its name on January 9, 2007, the same day Steve Jobs

introduced the iPhone, reflecting its shifted focus towards consumer

electronics.

Apple Inc., formerly Apple Computer, Inc., is an American

multinational corporation headquartered in Cupertino, California that

designs, develops, and sells consumer electronics, computer software

and personal computers.

Apple is the world’s-second largest information company by revenue

after Samsung Electronics, and the world’s-Third largest phone maker

after Samsung and Nokia. Fortune magazine named Apple the most

admired company in the United States in 2008, and in the world from

2008 to 2012. However, the company has received criticism for its

contractor’s labor practices, and for Apple's own environmental and

business practices.

As of May 2013, Apple maintains 408 retail stores in fourteen

countries as well as the online Apple Store and iTunes Store, the latter

of which is the world's largest music retailer.

Profile of the Organization

Founded: April 1, 1976

Founder(s): Steve Jobs

: Steve Wozniak

: Ronald Wayne

Type: Public

Industry: Computer Hardware: Computer Software

: Consumer Electronics

: Digital Distribution

Headquarters: Apple Campus, 1 Infinite Loop, Cupertino California, U.S.

Number of locations: 406 retail stores

Area served: Worldwide

Key people(s): Tim Cook (CEO)

: Arthur D. Levinson (Chairman)

: Steve Jobs(Founder, former CEO)

Revenue: US$ 156.508 billion (2012)

Operating income: US$ 055.241 billion (2012)

Net income: US$ 41.733 billion (2012)

Total assets: US$ 176.064 billion (2012) Employees: 80,000 (2013)

Issues of the Organization

Increasing competition

Apple’s key competitors are Google, Samsung, Microsoft and many more.

Google’s Android has more market share than Apple’s iOS and in the phone

making Apple is facing strong competition from Samsung.

Criticism for Apple maps

Apple launched its Google Maps replacement and while that’s not much

times to overhaul such a massive undertaking. Apple Maps were a

catastrophe as they majority of the times were not accurate and directed its

users or stranded them at some unknown place.

Patent War

SWOT Analysis

Strengths Weaknesses

Customer loyalty combined with expanding

closed ecosystem

Apple is a leading innovator in mobile device

technology

Strong financial performance

($10,000,000,000 cash, gross profit margin

43.9% and no debt)

Brand reputation

Retail stores

Strong marketing and advertising teams

High price

Incompatibility with different OS

Decreasing market share

Patent infringements

Further changes in management

Defects of new products

Long-term gross margin decline

Opportunities Threats

High demand of iPod mini and phone 5

it launch

Emergence of the new provider of application processors

Growth of tablet and Smartphone markets

Obtaining patents through acquisitions

Damages from patent infringements

Strong growth of mobile advertising market

Increasing demand for cloud based services

Rapid technological change

2013 tax increases

Rising pay levels for Falcon workers

Breached IP rights

Price pressure from Samsung over key components

Strong dollar

Android OS growth

Competitors moves in online music market

Strengths

1. Customer loyalty combined with expanding closed ecosystem. While at first

Apple’s closed ecosystem was a weakness for the business, this has now

changed. First, Apple now has a full range of apps, software and products

that are interlinked and support each other. Second, new products and

supplements will be released soon (it), hence expanding the ecosystem.

Third, Apple has a strong customer loyalty, which increases due to Apple’s

closed ecosystem, which, in turn, is supported by customer loyalty. So the

combination of Apple’s expanding closed ecosystem and customers’ loyalty

increases firm’s competitive advantage.

2.Apple is a leading innovator in mobile device technology. Apple has been

chosen as the most innovative business in the world for the 3rd time in 2012.

Company’s core competency of producing innovative products is the strength

the company builds upon and is able to bring the most innovative products to

the market.

3.Strong financial performance ($10,000,000,000 cash, gross profit margin

43.9% and no debt). Apple’s financial performance is one of the best among

many companies. Currently Apple has no debt and is not directly affected by

interest rates or credit markets.

Weaknesses

1. High price. Apple’s products cost much more than its competitors

devices. Some critics argue that the price is not justified. When there’s such a

fierce competition, Apple products price becomes a weakness because

consumers can easily opt for similar quality but lower price products.

2. Incompatibility with different OS. The ions and OS X are quite different

from other OS and uses software that is unlike the software used in Microsoft

OS. Due to such differences, both in software and hardware, users often choose

to stay with their accustomed software and hardware (Microsoft OS and Intel

hardware).

3. Decreasing market share. The less market share Apple has, the less it can

influence its potential customers and persuades them to jump into using Apple’s

closed ecosystem products.

Opportunities

1.High demand of iPod mini and phone 5. IPod mini sales will increase

Apple’s market share in the tablet market and, will strengthen firm’s

competitive advantage.

2.Itv launch . iTV launch will support Apple TV sales and the products’

ecosystem.

3.Growth of tablet and smartphone markets. Growth of tablet and

smartphone markets is a good opportunity to expand firm’s share in these

markets.

Threats

1.2013 tax increases. Tax increases in USA in 2013 will negatively affect

Apple.

2.Rising pay levels for Foxconn workers. Pay levels for Foxconn’s workers

already rose 3 times from 2010 to 2012. Foxconn is the main manufacturer

of Apple products and the rising pay level for Foxconn’s workers will likely

raise the prices for Apple products.

3.Breached IP rights. The companies that breach Apple patents might not be

discovered soon and may benefit from it, while weakening Apple at the

same time.

Findings & Recommendations

Apple cannot market iPhones in Brazil because another company owns the

trademark.

The Brazilian telecommunications company IGM Electronica owns the

brand Gradiente, which filed for exclusive rights to the name “iPhone” in

2000, before Apple had produced its iPhone. It took seven years but

eventually the rights were granted, and the G-Gradiente iPhone was

launched in 2007.

According the Financial Post, Apple Inc. grew richer than Uncle Sam,

having more cash on hand than the entire U.S. had spending room. This was

due to the debt ceiling crisis of July 2011. Apple Inc. boasted cash reserves

of $75.88 billion while Washington had an operating balance of $73.77

billion.

A major difference, however, is that Apple’s figure refers to its reserve of

cash, the government’s value is the amount of spending room it has before

reaching an arbitrary debt ceiling.

Apple now has the highest market value of any private company in the

world. Apple once had more cash in the bank than the US Treasury had

money to spend.Apple Inc. is sitting at $416.6 billion. Exxon-Mobile is

second at $400.4 billion.

Apple has more than 300 stores in 11 countries, and its retail division has

become a hugely important part of the company's business, selling millions

of iPods, Macs, iPhones, and iPads.

Recommendations:-

Scale up its production capabilities.

Every time Apple releases a hot new gadget, customers can't get it. This is a

consequence of Apple's legendarily precise just-in-time manufacturing system.

Apple never wants to make more devices than it will sell, so it ramps up

manufacturing in lock step with demand. That reduces its inventory costs and thus

boosts its profit, but Apple's production is still too slow to keep up with instant

spikes in demand. Is it possible for Apple to build products any faster than it does

now? If money is no object, sure: It could set up factories in many different

countries and it could invest in next-generation production capabilities that might

pump out iPhones even faster (for instance, robotic assembly lines, which have the

added benefit of not raising any concerns about factory conditions).

Bibliography

1. http://en.wikipedia.org/wiki/Apple_Inc.2. http://www.forbes.com/companies/apple/

3. http://www.strategicmanagementinsight.com/swot-

analyses/apple-swot-analysis.html

Books:

1.Steve Jobs by Walter Isaacson