Analysis of Apple Company Case
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Apple Inc. (previously Apple Computer, Inc. ) is an American multinational company that designs and markets shopper electronics, pc software and personal computer systems. Apple at present has 246 retail stores positioned in forty four states that employs over 27,000 retail employees. Apple also employs over 304,000 U. S. individuals from development to transportations. As of September eleven, 2012, Apple is the largest publicly traded company ever.
Apple has established a novel status within the consumer electronics industry. This features a buyer base that is dedicated to the company and its model, particularly within the United States.
Fortune magazine named Apple probably the most admired company within the United States in 2008 and on the planet in 2008, 2009, 2010 and2011. This case examine will not only spotlight Apple’s strengths, it will also talk about its weaknesses and previous failures which have laid the muse to turn into one probably the most powerful companies on the planet.
As the story famously goes, “two Steves” started one of many biggest computer corporations ever in a storage after quitting their day jobs.
Steve Jobs worked at Atari, a computer and gaming company and Steve “Woz” Wozniak worked at Hewlett-Packard. A friend launched the two seeing their mutual interest in electronics. Woz had constructed a pc in his spare time as a pastime. According to Charles Hill and Gareth Jones (2012), authors of Essentials of Strategic Management, “That is what folks did in 1976,” (p. C13). Jobs realized that individuals may need to purchase such a machine and persuaded Woz to arrange a company to make and market it.
Headquarters: Jobs’ garage in California.
Thus Apple Computers was born. A complete of 200 units were bought at a value of $666 every; the product rolled out on April Fool’s Day in 1976 at an area electronics retailer. The company went on to see great successes and a few failures, and the 2 Steves are heralded as revolutionizing the non-public pc industry. After bettering on the storage laptop, named Apple I, with higher graphics, extra information storage and a much less complicated looking machine, Apple launched the Apple II in 1977.
This personal laptop that was consumer pleasant to non-computer using customers soon made the 2 twenty somethings into millionaires. Throughout the years, subsequent models that improved on the velocity and design of the Apple II were released. With these improvements came further products: software, external drives and printers, to name a number of. By 1983, the Apple IIe was launched, which would become Apple’s hottest and best-selling of all models. In the ‘80s and ‘90s, Apple computers became computing standard for elementary schools.
By the time the Apple II line grew to become defunct, more than 2 million Apple IIs had been offered and home computer systems had been gaining reputation. Apple Computers additionally modified its name simply to Apple to replicate its diversity of products. During this basic timeframe, Woz was piloting a aircraft that stalled and crashed; he suffered some reminiscence loss. He returned to Apple sporadically all through the ensuing years but formally ended his full-time affiliation with the corporate in 1987. Two new engineers were introduced on board for 2 new project ideas: Jeff Raskin for the Macintosh laptop mannequin and Bill Atkinson for the more business-oriented Lisa computer.
The Macintosh became successful; the Lisa did not. In 1991 Apple continued to build on its founders’ guiding principle—that the individual, not the mainframe, ought to be at the middle of the computing universe (“Silicon Valley,” 2012). The company introduced a transportable Mac, which was the predecessor of the trendy laptop computer. In 1993 it launched the Newton, a personal digital assistant which let consumers compute with out sitting at a desk. The finish of the Nineteen Nineties brought yet another breakthrough Apple computer—the iMac, which touted energy, ease of use and esthetics.
The iPod, a digital music participant and the iPhone, a cellphone with Internet capabilities, are two of Apple’s newest immensely in style products. Steve Jobs died of most cancers in October of 2011 after working and main on and off at Apple all through the years; Woz is 62 and presently spends his time as a author, speaker, researcher and philanthropist. Tim Cook is the present CEO of Apple. On August 20, Apple formally grew to become essentially the most valuable firm in history when it comes to market capitalization (“Forbes,” 2012).
Heading into the final hour of buying and selling on the NASDAQ, the inventory had risen more than two p.c, giving the company a market cap of over $620 billion with shared trading over $662 apiece. The reason—speculation over its newest product release—the iPhone 5. Identification of the company’s inner strengths and weaknesses Strengths: •Product development. Doesn’t invent the market, however its merchandise set high standards for the market •Design and utility. Sleek, not clunky. For instance, the desktop pc is a part of the display screen, not a separate box with wires; the iPhone has very few buttons and feels good within the hand.
Products are simple to use, virtually intuitive •Marketing. Clever and takes advantages of people’s frustrations with different hardware •Brand name • Globally acknowledged •Rapid growth and high earnings • Pioneer of progressive and high-tech quality merchandise such as iPod, iPhone and iPad •Strong Research &Development division (9% of gross sales dedicated to R&D) • Having the management of both its own hardware and software program • Having had a visionary, charismatic and revolutionary CEO like Steve Jobs • Apple retail retailer expertise – permitting prospects to make use of and experience Apple’s products • Having a big segment of loyal customers •Sales of add-on merchandise Highlighting of its products because the world’s greenest line-up of notebooks
Weaknesses: •Very proprietary and controlling. Won’t open the working system to outsiders to develop hardware to work with the merchandise, keeping hardware sales to itself. While this retains design management inside and as much as standards, it has damage wide adaptation of its hardware, particularly computer systems, where it has a comparatively small market share. Apple has veto energy over Apps bought • The demise of Steve Jobs and the absence of his management shall be a weak spot for Apple as they find ways to match his innovation •Not shareholder-friendly.
Has abused option granting in the past and refuses to pay a dividend despite an enormous (and growing) cash level, no debt, and plentiful free money circulate •The battery life of the products are seen as weak • Failure of two products; First Apple TV launch and Mac Mini • Decision to restrict the iPhone to a single community • The lack of QWERTY keyboard in merchandise like iPad and iPhone • Low market share compared with HP, Dell, Acer, Lenova and Toshiba • Apple merchandise are extremely priced, so it’s onerous to swimsuit their goal market Opportunities: •Loyal customer base which has expanded past the Mac-heads of the Nineties with the iPod and the iPhone.
The iPad has had a really successful launch. This seems to be resulting in more gross sales of computers. •Has a well-deserved reputation for high-quality merchandise that work smoothly. New products are usually well-received and have a in-built purchasing base. •Move into other pc or media product areas that aren’t served nicely. Can continue to design the standard-setter for those spaces. •A new model of Apple TV could benefit from today’s more highly developed Web. Threats: •Big concepts are easy to copy. Microsoft copied the graphical user interface, and even Linux has a version.
The touchscreen interface is being utilized in other phones (e. g. Android). Apps are being developed for other smart phones and gadgets. •High-priced products. Apple priced itself out of the non-public computer market, and that remains a problem. Other smartphones that look and behave similarly to the iPhone are less expensive. •Google is shifting into Apple’s smartphone area by giving away the operating system, and it has announced that it will also be transferring into the TV house. Both firms are well-funded, so any battle between the two could be long and ugly.
Nature of external setting surrounding the company The business grows and changes at an alarming tempo. Every day there are new products that flood the market. New technology changes cell phones, laptops and new products are marketed each week. The major firms within the trade are Apple, Acer, Dell, and ‘Hewlett Packard’. In order for new corporations to break into this market, they should have a excessive entry barrier in addition to a differentiated technique from the existing firms. There is also a high studying curve with the purchasers getting accustomed to the model new products.
The existing brand names make the entry barrier very difficult to break into. Apple appears to be financially secure and healthy with weaknesses and threats that Apple has overcome and conquered in its past. The strengths show Apple’s basis built upon an extended line of unique merchandise and branding, powerful research and growth together with commanding advertising gurus that make Apple the powerhouse it has become right now. Financially, the financial papers seem to be accountable and accountable with much thought put into Apple’s strategy. According to YCharts (June 30, 2012), Apple’s present ratio is 1. seventy one, which is slightly above book value.
When you’ve a present ratio of 1, it means that your present property are exactly the identical as your current liabilities. “The present ratio measures a company’s capability to pay short-term debts and other current liabilities by comparing current belongings to current liabilities” (YCharts, 2007-2012, para. 1). Apple’s gross profit margin (sales-cost of products sold/revenue) is 42. 81%, gross profit margin represents the share of every greenback of a company’s revenue that is available to cover fastened prices after paying for the goods or companies that have been bought.
With Apple seizing new alternatives every single day, Apple will proceed to dominate its markets for a long time to return and will remain fiscally responsible whereas continuing to make giant profits, making it a sensible determination to put money into the Apple organization. SWOT evaluation It cannot be debated that Apple has many strengths. They should not, however, turn into complacent with their success and to find a way to maintain its aggressive advantage, the company must continually consider their inner and exterior operations and address its weaknesses and threats, in addition to assess its strengths and use them appropriately.
One of Apple’s current strengths is its brand recognition and powerful model image. Apple has successfully used this strength through product growth. As Apple took the market by storm and was gaining momentum, it expanded its product offering. With each new product such because the iPhone and the iPad, customers anticipated the same high quality and ease of use as Apple’s previous merchandise as they had already established that position in the consumer mind. Apple also has an enviable place out there place and within the minds of the financial world.
Apple’s strong financial efficiency is power as the expansion in capital permits for continued growth. While reviewing the strengths, one should additionally think about the weaknesses. For example, Apple’s weaknesses may be demonstrated with the discharge of the iPhone four and the considerations over the antenna on the product and how it may have an effect on the performance of the system. Product recalls can outcome in a damaged image and reputation which is in a position to affect sales. Recalls also lead to warranty and other bills.
It is evident that Apple views the iPhone as a major opportunity. The iPhone leads the company in percentage of sales, and with he new launch of the 4s, mixed with extra service providers supporting the gadget, will proceed to do so. The expanding pill market and demand for mobile technology additionally makes the iPad market a giant alternative for Apple. Expanding in worldwide markets is also an enormous alternative for Apple. Despite its strengths and alternatives, Apple faces many threats. One main menace to the company’s iPhone development is the rising popularity of Google’s Android. Critics and customers alike have stated that the Android is comparable, if not superior, to the iPhone expertise. This fierce competitor is sure to have an result on Apple’s market share.
In conclusion, an summary of Apple’s SWOT allows us to break down present strengths, in addition to weaknesses, opportunities and threats. This permits us to further analyze the company as an entire and is imperative when devising a corporate technique. The sort of corporate level technique the corporate is pursuing Apple’s company strategy is to give attention to making the industries’ best merchandise. They are a company that focuses on innovation, and likewise enhancements on their current products. They use the focused differentiation technique, by making merchandise that are unique, and pretty expensive.
Not everyone can afford an Apple product. They focus on aligning their enterprise strategy and their advertising technique with product development. This is one thing that they do much better than their opponents, and this could be a huge benefit for them. Apple’s goal market is people who are prepared to pay more for merchandise with better consumer expertise, people who prefer to have enjoyable with know-how, music fanatics and individuals who work with media and design professionals. They have accomplished an excellent job by discovering out which customer needs to satisfy.
They have discovered that these prospects need a good, beautiful and simple design and user enter, they usually have centered on packages that assist photograph and edit both footage and movies, as properly as good music applications to both listen to and make music. To make these applications, they have to need to give consideration to innovation, and have programmers and designers that may make packages like this–that are easy to make use of, stunning to take a look at, and do what you count on them to do. The nature of the company’s business-level strategy Apple’s fundamental business model has not modified because it first began enterprise in the late Eighties.
Apple’s organizational technique “think different” is to control the event and design of the hardware and software program for all of its products. The company is targeted on providing innovative merchandise and solutions to consumers. Apple has a simple technique of offering customers with the best merchandise and experiences attainable. Another technique is offering exclusiveness of their merchandise to sure providers and companies. This not solely builds a powerful working relationship, but in addition builds a strong need by customers for Apple products. I think crucial technique is their branding technique.
This contains making new merchandise that supports a “digital hub” strategy. This is an idea the place the merchandise that Apple produces will operate as a hub for digital gadgets such digital cameras, cell phones, and so forth. Apple focuses on the lifestyle of the client which incorporates imagination, hopes, dreams, and a lot of more attributes. They are dedicated to the customer (“Apple’s branding strategy,” 2011). Mission Statement Apple mission assertion is as follows, “Apple designs Macs, the best personal computer systems in the world, together with OS X, iLife, iWork, and skilled software.
Apple leads the digital music revolution with its iPods and iTunes online store. Apple reinvented the cell phone with its revolutionary iPhone and App Store, and has just lately launched its magical iPad which is defining the method ahead for mobile media and computing units (“Investor relations,” 2011). ” Steve Jobs stated that Apple’s “core worth that the corporate believes, is people with passion can change the world for the higher. ” He careworn that worth at its core is something that should never change regardless of the world changing round it.
The company’s structure and control techniques and the way they match its strategy Apple’s first product, the Apple I, was vastly totally different from the Apple products of today. This first handmade pc equipment was constructed by Apple co-founder Steve Wozniak. It lacked a graphic consumer interface (GUI), and consumers needed to add their very own keyboard and show. Co-founder Steve Jobs satisfied Wozniak that it could probably be sold as a business product. In 1976 the Apple I was unveiled at the Home Brew Computer Club and put on sale for $666. 66. Jobs and Wozniak continued to create progressive merchandise.
Soon their new firm, Apple Computer Inc. , had surpassed $1 million in gross sales. However, the mid-1980s saw some troublesome instances for Apple. In 1983 the company introduced the Apple Lisa for $10,000. The product flopped. In 1985 Steve Jobs was ousted after inside conflicts with the Apple CEO. Its pc merchandise the Mac I and the Newton weren’t successful, and the corporate underwent several CEO adjustments. With declining stock prices, the future of Apple was in jeopardy. Steve Jobs returned to Apple in 1997 to try and save the struggling company. The return of Jobs launched a model new period for Apple.
Jobs immediately started to vary the company’s corporate culture. Before Jobs’ return, staff have been extra open about Apple initiatives. After he returned, Jobs instituted a “closed door” coverage. Today Apple continues to remain vigilant in protecting its expertise and making certain that data stays proprietary. Jobs additionally created a extra flattened organizational construction; rather than go through layers of management to handle workers, he addressed them directly. Perhaps some of the noticeable modifications, nevertheless, was Apple’s enlargement into new product strains inside the electronics industry.
In 2001 Apple launched the iPod—a portable music participant that eternally changed the music trade. The firm also launched iTunes, a type of “jukebox” software program that allowed customers to addContent songs from CDs onto their Macs and then manage and handle their customized song libraries. Two years later Apple introduced the iTunes Store, during which users might download tens of millions of their favorite songs for $0. ninety nine every online. In 2007 Jobs announced that Apple Computer, Inc. could be re-named Apple Inc. This signified that Apple was not simply a computer manufacturer but in addition a driver in consumer electronics.
Some saw this as a shift away from computer systems towards client electronics similar to Apple TV, iPods, iTunes, iPhones, and iPads. However, it might be more accurate to say that Apple is reinventing computers. With the introduction of tablet computer systems such as the iPad, Apple has begun to take market share away from its prime competitors within the laptop trade. Sales of desktops, laptops, and netbooks started to say no after tablet computer systems were launched. Analysts imagine that tablet computer systems will continue to develop at a rapid price. Apple’s transition from a pc to a consumer electronics company is unprecedented—and exhausting to duplicate.
Although many can only speculate about why Apple succeeded so nicely, they tend to credit Steve Jobs’ exceptional leadership skills, Apple’s highly skilled workers, and its strong corporate tradition. Conclusion Today, Apple continues to guide the business with their outstanding and ‘ award winning’ services and products. Apple is also credited with main the digital media revolution with their iPod moveable music and video gamers and iTunes online media store, creating the first sustainable music-downloading business model in history (Gershon, 2009, p. 367).
The firm has additionally entered the mobile phone trade with an altogether different enterprise technique identified as” worth innovation” with the iPhone. Value innovation focuses on making the competitors irrelevant by opening up new and untapped markets, creating a leap in worth for consumers. The iPhone is one more product that has changed the way the industry defines new product requirements and potentialities. With rising demand for high-quality, highly effective, user-friendly, and price effective merchandise, Apple is undoubtedly the leader by way of bringing these ideas to life.
The firm realizes that somewhat than publicly announcing product development plans years in advance, products are better acquired with an “awe” response if they are merely launched when they’re completed versus providing “beta” or “demo” variations to the public. This is an excellent technique when the objective is to maintain shoppers looking forward to the most recent products and asking, “What might they presumably enhance next? ”