Nikita--apple.....

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STRATEGIC MANAGEMENT

Project Report

On

Apple Inc.

Group NO. 5

Professor-In- Charge: Tonia Mehra

Name Roll Nos.

Suma Jana 09

Badal Khona 27

Rohit Mehta 35

Neel Parikh 38

Nikita Shah 54

Sagar Keshri 62


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Introduction.

Apple Inc. is an American multinational corporation that designs and

markets consumer electronics, computer software, and personal computers.

The company's best-known hardware products include the Macintosh line of computers,

the iPod, the iPhone and the iPad. Apple software includes the Mac OS Xoperating

system; the iTunes media browser; the iLife suite of multimedia and creativity software;

the iWork suite of productivity software; Aperture, a professional photography

package; Final Cut Studio, a suite of professional audio and film-industry software

products; Logic Studio, a suite of music production tools; the Safari internet browser;

and iOS, a mobile operating system.

As of May 2010, Apple is one of the largest companies in the world and the most

valuable technology company in the world, having surpassed Microsoft.

Established on April 1, 1976 in Cupertino, California, and incorporated January 3,

1977, the company was previously named Apple Computer, Inc., for its first 30 years,

but removed the word "Computer" on January 9, 2007, to reflect the company's ongoing

expansion into the consumer electronics market in addition to its traditional focus on

personal computers.]

As of September 2010, Apple had 46,600 full time employees and2,800 temporary full time employees worldwide and had worldwide annual sales of

$65.23 billion.

Apple has established a unique reputation in the consumer electronics industry. This

includes a customer base that is devoted to the company and its brand, particularly in

the United States.

Bibliography www.slideshare.com, www.scribd.com, www.authorstream.com, www.insidecrm.com.
http://en.wikipedia.org/wiki/Multinational_corporationhttp://en.wikipedia.org/wiki/Consumer_electronicshttp://en.wikipedia.org/wiki/Computer_softwarehttp://en.wikipedia.org/wiki/Personal_computerhttp://en.wikipedia.org/wiki/Macintoshhttp://en.wikipedia.org/wiki/IPodhttp://en.wikipedia.org/wiki/IPhonehttp://en.wikipedia.org/wiki/IPadhttp://en.wikipedia.org/wiki/Mac_OS_Xhttp://en.wikipedia.org/wiki/Operating_systemhttp://en.wikipedia.org/wiki/Operating_systemhttp://en.wikipedia.org/wiki/ITuneshttp://en.wikipedia.org/wiki/ILifehttp://en.wikipedia.org/wiki/IWorkhttp://en.wikipedia.org/wiki/Aperture_(software)http://en.wikipedia.org/wiki/Final_Cut_Studiohttp://en.wikipedia.org/wiki/Logic_Studiohttp://en.wikipedia.org/wiki/Safari_(web_browser)http://en.wikipedia.org/wiki/IOS_(Apple)http://en.wikipedia.org/wiki/List_of_corporations_by_market_capitalizationhttp://en.wikipedia.org/wiki/Microsoft_Corporationhttp://en.wikipedia.org/wiki/Cupertino,_Californiahttp://en.wikipedia.org/wiki/Californiahttp://en.wikipedia.org/wiki/Consumer_electronicshttp://en.wikipedia.org/wiki/Consumer_electronicshttp://en.wikipedia.org/wiki/Computer_softwarehttp://en.wikipedia.org/wiki/Personal_computerhttp://en.wikipedia.org/wiki/Macintoshhttp://en.wikipedia.org/wiki/IPodhttp://en.wikipedia.org/wiki/IPhonehttp://en.wikipedia.org/wiki/IPadhttp://en.wikipedia.org/wiki/Mac_OS_Xhttp://en.wikipedia.org/wiki/Operating_systemhttp://en.wikipedia.org/wiki/Operating_systemhttp://en.wikipedia.org/wiki/ITuneshttp://en.wikipedia.org/wiki/ILifehttp://en.wikipedia.org/wiki/IWorkhttp://en.wikipedia.org/wiki/Aperture_(software)http://en.wikipedia.org/wiki/Final_Cut_Studiohttp://en.wikipedia.org/wiki/Logic_Studiohttp://en.wikipedia.org/wiki/Safari_(web_browser)http://en.wikipedia.org/wiki/IOS_(Apple)http://en.wikipedia.org/wiki/List_of_corporations_by_market_capitalizationhttp://en.wikipedia.org/wiki/Microsoft_Corporationhttp://en.wikipedia.org/wiki/Cupertino,_Californiahttp://en.wikipedia.org/wiki/Californiahttp://en.wikipedia.org/wiki/Consumer_electronicshttp://en.wikipedia.org/wiki/Multinational_corporation


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History

19761980: The early years.Apple was established on April 1, 1976 by Steve Jobs, Steve Wozniak, and Ronald Wayne

19811985: Lisa and Macintosh.Steve Jobs began working on the Apple Lisa in 1978 but in 1982 he was pushed from

the Lisa team due to infighting, and took over Jef Raskin's low-cost-computer project,

the Macintosh.

19861993: Rise and fall.The Macintosh Portable was designed to be just as powerful as a desktop

Macintosh, but weighed 17 pounds with a 12-hour battery life.

19941997: Attempts at reinvention.The Newton was Apple's first foray into the PDA markets, as well as one of the

first in the industry.

19982005: Return to profitability.

On August 15, 1998, Apple introduced a new all-in-one computer reminiscent ofthe Macintosh 128K: the iMac. The iMac design team was led by Jonathan Ive,

who would later design the iPod and the iPhone.

20052007: The Intel transition.The MacBook Pro was Apple's first laptop with an Intelmicroprocessor. It was

announced in January 2006 and is aimed at the professional market.

2007present: Mobile consumer electronics eraThe Mac, iPad, and iPhone now form the core of Apple's business.
http://en.wikipedia.org/wiki/Steve_Jobshttp://en.wikipedia.org/wiki/Steve_Wozniakhttp://en.wikipedia.org/wiki/Ronald_Waynehttp://en.wikipedia.org/wiki/Apple_Lisahttp://en.wikipedia.org/wiki/Macintoshhttp://en.wikipedia.org/wiki/Newton_(platform)http://en.wikipedia.org/wiki/Personal_digital_assistanthttp://en.wikipedia.org/wiki/Macintosh_128Khttp://en.wikipedia.org/wiki/IMachttp://en.wikipedia.org/wiki/Jonathan_Ivehttp://en.wikipedia.org/wiki/IPodhttp://en.wikipedia.org/wiki/IPhonehttp://en.wikipedia.org/wiki/MacBook_Prohttp://en.wikipedia.org/wiki/Intelhttp://en.wikipedia.org/wiki/Macintoshhttp://en.wikipedia.org/wiki/IPadhttp://en.wikipedia.org/wiki/IPhonehttp://en.wikipedia.org/wiki/Steve_Jobshttp://en.wikipedia.org/wiki/Steve_Wozniakhttp://en.wikipedia.org/wiki/Ronald_Waynehttp://en.wikipedia.org/wiki/Apple_Lisahttp://en.wikipedia.org/wiki/Macintoshhttp://en.wikipedia.org/wiki/Newton_(platform)http://en.wikipedia.org/wiki/Personal_digital_assistanthttp://en.wikipedia.org/wiki/Macintosh_128Khttp://en.wikipedia.org/wiki/IMachttp://en.wikipedia.org/wiki/Jonathan_Ivehttp://en.wikipedia.org/wiki/IPodhttp://en.wikipedia.org/wiki/IPhonehttp://en.wikipedia.org/wiki/MacBook_Prohttp://en.wikipedia.org/wiki/Intelhttp://en.wikipedia.org/wiki/Macintoshhttp://en.wikipedia.org/wiki/IPadhttp://en.wikipedia.org/wiki/IPhone


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Bibliography www.slideshare.com, www.scribd.com, www.authorstream.com, www.insidecrm.com.,

www.oppapers.com

OBJECTIVES AND GOALS

Over the next 3-4 years Apple would like to increase their product accessibility

(new stores).

Increase their market share by 30%

Eliminate the need for new products in order to raise sales.

VISION STATEMENT

Man is the creator of change in this world.

As such he should be above systems and

structures, and not subordinate to them.


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MISSION STATEMENT

Apple is committed to bringing the best personal computing experience to students,

educators, creative professionals and consumers around the world through its

innovative hardware, software and internet offerings.

Bibliography www.slideshare.com, www.scribd.com,www. authorstream.com, www.insidecrm.com.,

www.oppapers.com

PORTERS FIVE FORCES

MODEL

PC MP3 player/online music

services

Mobile Products

Threat

of Entry

Low

- Economies of Scale:

R&D is especially a big

part of the cost of

producing (R&D cost in

computers hovers at

12% of sales by the

U.S. industry)1.

- Product Differentiation:

Apples PC has its ownoperating system and

the unique design.

- Cost Advantage: High

demand particularly in

proprietary technology.

Low

- Since iPod nano launched, some

competitors such as Rio and

Olympus had preferred to stop.

- Economies of Scale: iPod has 80%

of market share and Apple contracted

with Samsung to buy 40% of its flash

memory production which is two

times more expensive than a hard

drive

2

.

- Product Differentiation: iPod has its

own music store like iTunes which

allows customers download music

conveniently. The complete set of

iPod, iTunes and the accessories for

iPod.

- Cost Advantage: High demand in

proprietary technology. Apple has

several patents for iPod and

favorable access to raw materials by

the contract with Samsung.

Low

- Economies of Scale:

High demand in R&D and

marketing (todays cell

phones come with a lot of

add-ons like camera,

voice recorder,

speakerphone, MP3

player and FM receiver.

They also have built in

memories to record andretain voice and pictures

and facility to download

them to a computer).

- Product Differentiation:

iPhone has add-on

functions with technology

from their own PC and

MP3 player.

- Cost Advantage: High

proprietary technology

and favorable access to


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raw materials.

Threat

of

Rivalry

High

- There are relatively

few competing firms

compared to other

industries, but Microsoft

has most of the market

share.

- Lower priced PC

makers like Dell have

been growing in the

market.

Moderate

- There are various competing firms

such as Samsung, Sony, i-River, etc.,

but iPod has almost 80% of the

market share.

- But if it does not keep the products

innovative, the other companys

products which are lower in price than

iPod can be a significant threat in

anytime.

High

- There are relatively large

number of competing

firms such as Samsung,

LG, Motorola, etc., but the

latest market data from

analyst firm Canalys

estimates that Apple took28% share of US smart

phone market in 4th

quarter of 20073.

Threat

of

Substitu

tes

Low

- Many types of

products such as PDA,

DVD player, and

calculator can exist as a

substitute for PC, but

these can substitute

only one or two

functions of PC.

Moderate

- The substitutes for MP3 player can

be a CD player, MD player, radio,

etc.; but cheaper and easier access

to MP3 files has been making

customers leave from the other music

players.

Low

- Mobile phones can be

substituted by home

phones, internet

messengers, etc., but the

main convenience of

mobile phones which is

the portability cannot be

easily substituted.

Threat

of

Supplier

s

Moderate

- The major suppliers

are of raw materials and

the labor which is highly

proprietary in

technology and has the

power to impact price.

- Besides the threat of

the labor which includes

the technicians, there

are relatively various

suppliers for the raw

materials.

High

- The suppliers for raw materials and

labor can be the threat, but the

supplier who holds the main

profitability is the song writers,

singers and players.

- Another big threat is the illegal free

music download websites or P2P file-

sharing sources. Easy and cheap

access to MP3 files can encourage

the MP3 player market, but on the

other hand, this can be the threat to

iTunes.

Low

- Todays phone has a lot

of functions in addition to

calling/receiving so there

are many kinds of

suppliers for the camera,

MP3 players, Video

players, memories, etc.

- Apple which is already in

the industry of PC and

MP3 mostly deals with

internal mediates and

suppliers.

Threat

of

Moderate

- The number of buyers

is huge and growing as

new technologies are

introduced at a fast

pace.

Low

- The number of buyers is continually

increasing and they keep demanding

new and updated products.

- The internet speed and the music

file providers are developing and

these environments encourage the

Low

- The number of buyers is

even huger than the PCs.

Also the buyers keep

increasing with the new

market of other

developing countries.


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buyers - Apple differentiated bycreating its own

operating system and

unique design, but other

companies like Dell or

HP differentiate by

lower price marketing.

MP3 buyers.

- iPod has relatively loyal customers.


www.oppapers.com

SWOT Analysis Apple

Strengths:

Apple is a very successful company. Sales of its iPod

music player had increased its quarter profits to $320

(June 2005). The favorable brand perception had also

increased sales of Macintosh computers. So iPod

gives the company access to a whole new series of segments that buy into

other parts of the Apple brand. Sales of its notebooks products is also very

strong, and represents a huge contribution to income for Apple

Brand is all-important. Apple is one of the most established and healthy IT

brands in the World, and has a very loyal set of enthusiastic customers that

advocate the brand. Such a powerful loyalty means that Ample not only recruits

new customers, it retains them i.e. they come back for more products and

services from Apple, and the company also has the opportunity to extend new

products to them, for example the iPod.

Weaknesses. It is reported that the Apple iPod Nano may have a faulty screen. The company

has commented that a batch of its product has screens that break under impact,

and the company is replacing all faulty items. This is in addition to problems with

early iPods that had faulty batteries, whereby the company offered customers

free battery cases.

There is pressure on Apple to increase the price of its music download file, from

the music industry itself. Many of these companies make more money from


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iTunes (i.e. downloadable music files) than from their original CD sales. Apple

has sold about 22 million iPod digital music players and more than 500 million

songs though its iTunes music store. It accounts for 82% of all legally

downloaded music in the US. The company is resolute, but if it gives in to the

music producers, it may be perceived as a commercial weakness.

Early in 2005 Apple announced that it was to end its long-standing relationship

with IBM as a chip supplier, and that it was about to switch to Intel. Some

industry specialists commented that the swap could confuse Apple's consumers.

Opportunities.

Apple has the opportunity to develop its iTunes and music player technology into

a mobile phone format. The Rokr mobile phone device was developed by

Motorola. It has a colour screen, stereo speakers and a advance camerasystem. A version of Apple's iTunes music store has been developed for the

phone so users can manage the tracks they store on it. Downloads are available

via a USB cable, ands software on the handset pauses music if a phone call

comes in. New technologies and strategic alliances offer opportunities for Apple.

Podcasts are downloadable radio shows that can be downloaded from the

Internet, and then played back on iPods and other MP3 devices at the

convenience of the listener. The listener can subscribe to Podcasts for free, and

ultimately revenue could be generated from paid for subscription or through

revenue generated from sales of other downloads.

Threats.

The biggest threat to IT companies such as Apple is the very high level of

competition in the technology markets. Being successful attracts competition,

and Apple works very hard on research and development and marketing in orderto retain its competitive position. The popularity of iPod and Apple Mac are

subject to demand, and will be affected if economies begin to falter and demand

falls for their products.

There is also a high product substitution effect in the innovative and fast moving

IT consumables market. So iPod and MP3 rule today, but only yesterday it was

CD, DAT, and Vinyl. Tomorrow's technology might be completely different.

Wireless technologies could replace the need for a physical music player.


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www.oppapers.com

PEST ANALYSIS

PEST is the best technique for scanning of

macro level environment which include political,

economic, social and technological factors.

Political Factors: Political factors are the rules, regulation, constraints and condition made

by government. Organization doing business in country must be agreed

upon the term and condition enforced by Government.

Some examples of political factors includes:

- Taxes on product and services

- Employment laws

- Tariffs

- Trade

- Political Stability

- Government policy on economy.

Economic Factors: Economics factors are important to know the purchasing power of people,

stability of economy. Fluctuation in economy impact prices of product and

services organization offers to their customers. These issues are

important in third world country because during recession and depression

demand goes down.

Some examples of economic factors are

- Higher the interest rate lowers the investment.

- Economic growth in terms of GDP


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- Inflation rate

- Exchange rates.

Social Factors: Organizations must evaluate social factors of the country before starting

business. Social factors include relationship, ethnic groups, religion, age

distribution and others.

Forexample- If marketers does not knows the social values of woman in society and

start advertising campaign of woman undergarments.

- Offering products for young people at a place where the majority of

people are above 40 years.

Technology factors:

Technology is now become the part of majority of organization.

Technology is driving the business and improves quality and reduces time

to market of product and services. In industry where the technology

change with fast pace make it difficulty for the organization to adopt due

to cost and human resource issues.

Some examples of technology factors are:

- Research & Development activity

- Automation

- Technology incentive

- Rate of technology change

- Technological shifts


www.oppapers.com,www.freeessays.com


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11 Effective Strategies Apple Uses to Create Loyal Customers

When shoppers sleep outside of stores just to be one of the first to buy an iPhone, it's

obvious that Apple Inc. is a company that enjoys fanatical brand loyalty. However, this

brand success is not a result of dumb luck or forces beyond Apple's control; it's part of

a well-thought-out plan to deliver strong products and to create an Apple culture. Find

out more about these and other strategies that Apple employs to achieve its

tremendous customer loyalty.

1) A Store Just for Apple: Apple has historically been troubled by big-box sales

staffers who are ill-informed about its products, a problem that made it difficult for

Apple to set its very different products apart from the rest of the computing

crowd. By creating a store strictly devoted to Apple products, the company has

not only eliminated this problem but has made an excellent customer-loyalty

move. Apple stores are a friendly place where Mac and PC users alike are

encouraged to play with and explore the technology that the company offers.

This is a space where Macheads can not only get service but also hang out with

others who enjoy Apple products just as much as they do. By creating this

space, Apple encourages current and new customers to get excited about what it

has to offer.

2) Complete Solutions: Apple's products complement and complete each other.

Buy an iPod, and you can download music via iTunes. For the average user,

most Mac programs are produced by Apple. This sort of control over the entire

user process, from hardware to software, strengthens customer loyalty. Apple

users generally don't have to stray to find products and solutions they want.

3) Are You a Mac?: Let's face it, Apple is a hip brand. It pushes a strong

identification with everything young, up-to-the-minute and smart. Consider
http://www.insidecrm.com/features/crm-for-iphones-110507/http://www.insidecrm.com/features/crm-for-iphones-110507/


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Apple's I'm a Mac campaign. The Mac guy is smooth and confident, while PC

appears uptight and old. Once you've become smooth, would you want to go

back to uptight?


www.oppapers.com

4) Varied Products: Many consumers may not be ready to buy an Apple computer,

but they're willing to give gadgets like the iPod or iPhone a try. By selling

products with lower entry costs, it creates an opportunity for new users to be

introduced to Apple. If these users enjoy their gadgets, they're more likely to

consider buying an Apple computer in the future.

5) Media Fodder: Media outlets, especially bloggers, love to write about Apple.

Why? Because Apple makes it so easy. With leaked rumors about new

developments, its very own expo and mysterious shutdowns of its online store,

Apple gift wraps news stories that are just begging for speculation and hype. By

perpetuating this cycle of media frenzy, Apple keeps its customers excited about

buying new Apple products now and in the future.

6) Education Sales: By selling its products to schools and universities, Apple turns

classrooms into showrooms. If students go through school using Apple products,

they become comfortable with the interface and familiar with the superior

performance the brand offers. By creating this early exposure, Apple captures

customers before they even know that they are customers.

7) Products That Deliver: Apple carefully considers what consumers are looking

for, so its products are a result of both extensive research and strong design.

This meticulous planning is a large contributor to Apple's high customer-

satisfaction rates. It's plain and simple: Robust and easy-to-use products not

only make your customers happy, but also make them want to buy more

products from you in the future.
http://www.apple.com/getamac/ads/http://www.macworldexpo.com/http://www.apple.com/getamac/ads/http://www.macworldexpo.com/


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www.oppapers.com

8) Outsourcing Unpleasantness: With Apple products, the average consumer'sinteraction with the company is likely to be low. Unless something goes wrong,

you don't have any reason to speak with an Apple customer-service

representative. Of course, the iPhone presented an opportunity that could have

made Apple much more involved, similar to administering iTunes for the iPod.

With a phone, interaction becomes multifaceted. You have to consider billing

errors, quality of wireless service, contracts and a number of other factors that

often lead to customer frustration. With the iPhone, Apple was wise to stick with

building a good product and letting AT&T handle the service.

9) Consistency: All of Apple's products have the same basic architecture. Because

of this consistency, customers who already own Apple products have a good

idea of what they'll be getting before they make a purchase. They know that it

will be easy to adapt to new hardware, and this makes them more open to

making a repeat purchase.

10) New Innovations: Although the architecture of Apple products is consistent, its

portfolio is not. The company offers consumers a number of different ways to

enjoy its products. By giving customers an opportunity to employ Apple in their

living rooms, pockets and offices, Apple makes it easy to stay loyal to a brand

they already like.


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11) Attractiveness: From packaging to aesthetic design to user-interface

experience, Apple makes its products accessible and attractive. Bright colors, a

smiling icon and slick-looking hardware remind customers every time they use

Apple products that what Apple offers is appealing.


www.oppapers.com


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Recommendations

Strategy 1

Open six computer retail stores (not just peripheral and accessories). Apple

currently has stores opened throughout the United States with only peripheral

and accessories for their computers. Adding the hardware should generate more

hands-on awareness and use already established locations.

This will increase product accessibility for those who wish to view items otherthan just accessories and increase awareness of the originality of Apples

products.

2 percent increase over the next 2 years in sales representatives for the

computer hardware.

Strategy 2

Contract music spokesperson to attract the upcoming generation who are

attending high school and college. This will invoke a sense of style and linking

apple with a distinctive and memorable top 10 hit. This will stay in the customers

awareness and influence future purchase decisions.

Contracting one music spokesperson estimated $6 million.


www.oppapers.com


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Strategy 3

Add more features to current products for greater Wintel compatibility. Features

such as iTune software compatible with windows based computers, Office

programs loadable from PC installation disk (This would require a software

agreement with Microsoft). In late October 2003 Apple released an iTune

software package that is PC ready.

It will increase the United States market share at least 30 percent for the next 2-

3 years.

$50 million is the estimated cost for Research and Development.


www.oppapers.com


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