Lizzie LoweDan MaslowAlex Cesan

Whitney TagliaviniMichael Mitchell

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From “iCulture” Stems “A Healthier Apple”

Thesis:

1) New Products– Analyze through Porter’s Five Forces

2) Go Green– Analyze through stakeholder management theory

Apple should continue to leverage its “iCulture” to horizontally integrate through

focus differentiation

Two Future Endeavors:

History of Apple

• 1976 – Apple was founded 1976 • 1991 – Smooth Success until competition from

Microsoft Windows – Instead of continuing to innovate Apple sued Microsoft

(unsuccessfully) and sat back on it’s old lines

• 1998 – After a 7 year low stock streak, iMac released– iMac saved the company and Apple aggressively

innovated • Today – New products, such as, iPod and iPhone

"At the end of day, the whole concept of people experiencing Apple products and buying more of them is actually happening."

- Gene Munster, an analyst at Piper Jaffray Cos.

- Apple products define an entire generation - iPod, iPhone serve as status symbols- “i” prefix has been attached to many words- Newly nicknamed iGeneration refers to

Generation Y- New industry has sprung up around

accessories for iPod- Nike, BMW, Gucci integrating the iPod into

their products

“iCulture” Continued

Five Forces:

PDA and Smartphone Industry

Industry-Competition is

on Service Provider level

Potential Entrants-Takes high Funding

Buyers-Low transferability with

penalties-Benefits for Long Term

Commitment-Few Options

Suppliers-Components Standard-Established Relations

because of iPod

Substitutes-Possible but Inconvenient

“iCulture” Phenomenon Apple’s three synergetic industries:

Computers – Mac sales are up 34% from a year earlier Portable Music Players – iPod sales are up 17% from a year earlier Smartphone – iPhone’s overperformance already

iPhone Customer Base

15-24, 31%

25-34, 32%

35-49, 31%

50+, 6%

15-24

25-34

35-49

50+

Apple’s September Quarter Revenue and Earnings was Highest Ever

iPhone Success • Sold 1 million iPhones on September 9th

– 21 days before projected date

8

Inbound logistics

Purchases small electronic components

Operations

Specializes in efficiently mass-producing consumer electronics

Outbound logistics

Distributes large shipments of products to retail stores

Marketing and sales

Strong marketing division and heightened brand loyalty

Service

Strong customer service department, but not accustomed to automobile industry

Firm infrastructure

Human resource management

Technology development

Procurement

SupportActivities

PrimaryActivities

Value Chain:

iCar – Attractive Industry or not?

Making of “A Healthier Apple”

• Green History• Utilized Accommodative Stakeholder Management Approach

» Many environmental “milestones” actually mandated by law» Ranked 12th amongst 14 largest electronics manufacturers by Greenpeace

• Three Major Green Issues» Prevalent use of toxic chemicals (i.e. PVCs/BFRs)» Large amounts of e-waste (20-50 million tons yearly)» Overall apathy and lack of innovation in green product design

• Steve Jobs- “A Greener Apple”» “…I was surprised to learn that in many cases Apple is ahead of, or will soon be

ahead of, most of its competitors in these areas.” » Full of fluff and illogical comparisons to competitors» Few notable promises- phase-out of PVCs and BFRs by 2008/strenghten recycling

efforts, etc.

Going Green• “iCulture” is trendy

- Trend right now is to go green- Consumers becoming environmentally conscious

• Going green is a new market- Demand for environmentally friendly houses, cars, food- Companies with environmentally friendly products can profit- Green products enable businesses to expand in saturated

markets

– Progress Underway – Leverage the “iCulture”– Strategic partnerships with:

• Join Conservation International• Advertise the iTune’s Song of the Week

in Starbucks stores• PepsiCo’s Products

– free iTunes Songs on Package

08 March 2005 –Guiyu ChinaA migrant worker strips plastic from wires to extract useful metals. However, this PVC plastic is toxic and when burned, a huge pollutant.www.greenpeace.org/international

.

“A Healthier Apple”

The Steps to a Proactive Positioning

“A Healthier Apple”• “Greener Apple” Product Initiatives

– Granny Smith® Color added to each iPod line– “Greener Apple” Song of the Week on iTunes

• Joint Ventures – Starbucks

– Have the Song of the Week “Green Cards” – Agreement with Artists that purchase of song on

iTunes goes directly to Starbucks foundations

– PepsiCo - “Performance with Purpose” – Already a member of Conservation International– Co-brand list of products

» Quaker Oats Oatmeal, Gatorade– Free iTunes Song with purchase

and 10% of proceeds go to Conservation International