Organizational Strategy - Apple Case Study

Organizational Strategy and Policies
Skill Builder Assignment For the Apple Case

Study
Prepared by Team
Copyright 2016 Wm. R. Bigler
Integrated Cascade of Choices
What is Our
Winning
Aspiration?
To be the most
profitable company
in the world
Simplifying the
consumers daily
life and activities
through use
friendly devices
Developing of
innovative products
Delivery of secure
digital content
Globally in existing and emerging markets

Distributed by Apple stores and service providers
Integrated consumer devices
Content and superior software, music, games, and
digital content.
Where
Will We
Play?
Maintain focus on research

and development of new
products, new design, new
functionality
Remain price leader
Remain the industry leader
in user satisfaction
Retain and grow Apple loyal
customer for life-long
relationships
Retain business partners
(i.e. Verizon Wireless)
Co-branding with selected
retailers to offer Apple
products and services
How Will
We Win?
What
Capabilities
Must Be In
Place?
The set of capabilities required to win:
Brand Reputation
Innovative Production Process
Superior Customer Service
The support systems:
Developing Strategic
Partnerships
Creative and
Innovative Talent
Organizational
Reward Systems
Research &
Development
Activities
What
Management
Systems Are
Required?
1. Strategically Valuable Resources
BRAND
INNOVATION
COMPETITIVE ADVANTAGE
FINANCE
2. Should Apple Make Key Corporate Level Strategy Decisions?
Corporate Center
Apples attitude toward acquisition, alliance. and partnership has been focused around opportunity. The
driving force behind Apple has always been innovation and customer satisfaction. Therefore having a
corporate environment centered around possible opportunities to improve innovation and customer
satisfaction will benefit Apple in multiple ways and stay in line with their mission .
Strategic Alliances, Partnerships, and Acquisitions
Apples global partnership with IBM will allow Apple to break into the corporate enterprise environment
(which is dominated by Microsoft)
MasterCard- an alliance with MasterCard
Beats- acquisitions of beats by Dr. Dye allows the company to eliminate music streaming competition
and maintain a relevance among music fans and millennials.
Siri Inc. and Novauris 2010 acquisition of Siri allowed the company to bring the most innovative
voice technology to consumers.
Providing Parenting Advantage

Several major acquisitions have occurred over the years for Apple such as Beats by Dr. Dre, Siri Inc., and
Novauris. These acquisitions allow Apple to continue improving products and delivering the most
innovative and advanced technology to consumers. Apples acquired companies, alliances, and
subsidiaries also allow the company to continue to expand into the corporate segment and help to reduce
competition in several markets. Global expansion continues to remain a top priority for Apple and its
subsidiaries.
3. Model of the Leadership of Strategy
Key Dimensions of the Leadership of Strategy
Irreversible Commitments
Owned Unique Resources
Capabilities/Core Competencies
Stated Strategy
Top Down Planning
Top Management Only
Total Flexibility
Emergent Strategy
Entrepreneurship at
Lower Levels
Democratized Strategy
Making Process
4. Can Apple Fend Off the Four Threats to Sustainability of

Superior Performance?
Innovative Products
Strategic Partnerships
5. Competitive and Cooperative Moves
Competitive Moves
Innovative Products
Beats Headset
Apple Watch
Apple Music
Apple Stores
Personal Setup via interactive online session
Genius Bar free lifetime support
90 days of complimentary world class phone
support
Cooperative moves
Strategic Partnerships
Global corporate enterprise market
Apple Pay
6. Organizational Structure
John Brandon,
VP, Channel
Sales
Michael Fenger
VP Phone Sales
Douglas Beck
VP Apple Japan
Angela Ahrendts
SVP Retail &
Online Stores
Dan Riccio
SVP Hardware
Engineering
Jeff Williams
SVP. COO
Bruce Sewell
SVP, General
Counsel
Jonathan Ive
SVP Chief
Design Officer
Katie Cotton
VP,
Communications
Timothy
Cook
CEO
Eddy Cue
Internet
Software &
Services
Luca Maestri
SVP, CFO
Phillip Schiller
SVP Product
Marketing
Joel Podolny
VP, HR
Craig Federighi
SVP Software
Engineering
Johny Srouji
SVP Hardware
Technologies
Scott Forstall
SVP, IOS
Software
7. Key Strategic Initiatives
Grow the business initiatives

Expand into Enterprise/Corporate uses
New Markets and Demographics
Innovate the business initiatives
Integrated Application Creation
Socially Responsible
CarPlay
ResearchKit and CareKit
Key Strategic Initiatives - The Battle for the Office

10
Key Strategic Initiatives

Grow: New Markets and
Demographics
In the past few years, Apple has been focused on
growing their international market share, especially
in India. Roughly 118 million smartphones were
sold in India last year and that number is
estimated to rise to 174 million units in 2017.
Smartphones are considered a luxury item. Which
is why Apple is focused on offering phones at lower
prices with easier financing. They are also
distributing phones outside Indias biggest cities to
previously untapped pockets of people who can
afford them.
The largest demographic in the US is the baby
boomer generation and the market is a great match
for Apple. Men aged 65 and older spent more on
Apple devices than any other demographic group
in the United States. This is why Apple is choosing
to create products directed towards this
demographic. These products are compatible with
each other and easy.
11

Innovate the business and integrate application creation
Apple continues to make a difference in the lives of its users
one app at a time. The creation of unique, yet sufficient,
apps is what promotes Apple Inc. as the #1 computer
company in the world. Apple CarPlay is an Apple standard
that allows for a car radio or head unit to be a display and
controller for iPhone products.
How Apple CarPlay works:
CarPlay works with Apple iPhone 5 and later release
phones (iPhone 5, iPhone 5c, iPhone 5s, iPhone 6,
and iPhone 6 Plus).
Apple's in-dash software provides hands-free, eyes-free
access to maps, phone, messages, music, podcasts, etc.
Apps such as Beats Music, Spotify, Stitcher, and
iHeart Radio are also compatible.
CarPlay also supports Siri voice-recognition software for a hands-free approach.
In recent studies, CarPlay is given high marks for simplicity of its graphics and icons.
12

Continued: Innovate the
business and integrate
application creation
CarPlay puts the apps used the most
within reach of the driver. Therefore, the
consumer can play music or even send a
text, without ever looking at their phone.
This is a huge safety advantage.
CarPlay helps Apple achieve its desired
future state and it is providing life
changing software to its consumers. With
Apps such as ResearchKit, CareKit, and
CarPlay, users will have more information
at their fingertips with less risk.
13

Innovate the business and integrate
application creation
Apple continues its culture of innovation and provides
breakthrough technology while practicing social responsibility.
Through these initiatives, Apple transforms the way health care is
practiced worldwide. ResearchKit and CareKit are making a
difference in peoples health. Apples website proclaims the apps
developed thus far have produced . . . medical insights and
discoveries at a pace and scale never seen before.
ResearchKit examples include:
Better understanding of Parkinsons disease
Diagnosing autism
Diabetes and the relationship of glucose levels and diet/activity
levels, etc.
Concussion monitoring
CareKit examples include:
Chronic condition management by the patient and shared with
the doctor
Post-surgery care monitoring by the patient and shared with the
care team
14

Continued: Innovate the
business and integrate
social responsibility
Underserved communities can receive
care they would otherwise go without.
Medical providers can expand their
capacity to serve, thus supporting market
development in areas previously seen as
geographically inaccessible.
Examples currently include dongle
attachments that can run blood tests for
HIV and syphilis in 15 minutes. Traditional
tests can take 2 weeks or longer and are
not easily accessible to most of the
developing world.
15

Continued: Innovate the business
and integrate social responsibility
Another example includes BACtrack breathalyzer for
iPhone which includes Apple HealthKit integration. This
is an example of the quantified self health trend
whereby individuals monitor their own health data.
Lastly, an integrated system called the digifit
ecosystem has a full suite of Apple apps that records
heart rate, pace, speed, etc. The results can be
uploaded to different training sites.
16
8. Executing the Apple Strategy Framework - Strategy
Apples business strategy can be summarized as product

differentiation through design and functionality, expansion
of third party content, while pursuing additional markets for
its products in enterprise and global market growth.
17
8. Executing the Apple Strategy Framework - Structure

Spoke and Wheel Hierarchy
Function-Based Grouping
Upper tier structure
18
Product-Based Grouping
Lower tier structure
8. Executing the Apple Strategy Framework - Processes
Continued Investment in Research and Development

Increase Market Share in New Markets
Focus On Continued Great Customer Service
19
Executing the Apple Strategy Framework - Rewards

Apple looks to hire the best and brightest employees;
therefore, retention is a top priority for Apple. Apple
acknowledges and rewards hard work, years of
service, and innovation. It also looks to entice new
employees by offering appealing rewards and benefits.
Apple works to create an inviting corporate culture that
will ensure innovation and creativity is able
to flourish.

20
8. Executing the Apple Strategy Framework - People
Inclusion inspires
innovation.
Were working hard to

expand our recruiting
efforts so we continue
hiring talented people from
groups that are currently
underrepresented in our
industry. Tim Cook, CEO
Great ideas push the world forward.

21
8. Executing the Apple Strategy Framework - Behavior

Create products and experiences that
users will love. If you do that well, then the
rest will fall into place.
Focus on the customer
Hire the best people you can
Keep teams small
Hold individuals accountable
Keep everything secret
Concentrate your best people on your most important
project
Obsess over the details
22
8. Executing the Apple Strategy Framework - Performance
Apple is an incredible company. Not only

does it generate extensive cash flow, but
it consistently drives its top line and
bottom line higher each and every year.
Apple is known for its innovative
products and state-of-the-art technology.
Their mission is to continue to grow Apple
Inc. through innovation, creativity, and
performance.
23
8. Executing the Apple Strategy Framework - Culture
24
Key Process for Speedy Execution
-Continued Innovation
-Flexibility
- Expansion
25
9. Forecast of Increases in Shareholder Value

Apple posted record
quarterly revenue of
$75.9 billion and
record quarterly net
income of $18.4 billion,
or $3.28 per diluted
share.
These results compare
to revenue of $74.6
billion and net income
of $18 billion, or $3.06
per diluted share, in
the year-ago quarter.
Gross margin was 40.1
percent compared to
39.9 percent in the
year-ago quarter.
International sales
accounted for 66
percent of the quarters
revenue.
Financial results for its fiscal 2016

first quarter ended December 26,
2015
26
Increases In:
Net Sales
R&D
Net Income
EPS
Shareholder
Equity/Value
Increases in Shareholder Value for Apple

Key Financial
Ratios
Source:
Increases in Shareholder Value for Apple

Link Among Value Chain, Value Drivers & Free Cash Flow: Different
Activities Will Be More Important Depending if the Firm is a LCP or
Differentiator
Firm Infrastructure
Human Resource Technology
Technology Development
Procurement
Inbound Logistics
Operations
Outbound Logistics
Marketing & Sales
Service
Quality Control
Receiving
Raw material controls
Supply Schedules
Manufacturing
Packaging
Production Controls
Quality Controls
Finished Goods
Order Handling
Dispatch & Delivery
Invoicing
Customer
Management, Order
taking, promotion,
Sales Analysis
Warranty,
Maintenance,
Education and
training
Sales = P X Q
-
Operating Expenses
Operating Profit
Income Taxes =
Operating Profit
After Taxes
Add:
Raw Material Controls

Recycling or cell
phones
Realignment to reflect
Geographic regions
Own Retail Store

Located in high
traffic areas
Integrated sales
Experience
Marketing
Customer support prior

To, during sale and
after sale
Multiple Sources for

components
Superior supply chain
management
Outsource hardware
component production
and assembly
Retail Stores
Superior Sales
experience
Retail Store Space

Enhanced resellers
Knowledgeable
salespersons
Customer service and

support
Corporate reputation
Depreciation and
Other Non-cash
Expenses
Less: Increase in Net

Working Capital
Less: Increase in
Fixed Capital
Equals: Free Cash Flow
from Operations
References
Analyzing Porter's Five Forces on Apple (AAPL) | Investopedia. (2015). Retrieved April 16, 2016, from
http://www.investopedia.com/articles/investing/111015/analyzing-porters-five-forces-apple.asp
Apple Corporate Gifts and Rewards Program - Gift Cards, Special Volume Pricing, Custom Engraving - Apple. (2016). Retrieved from
http://www.apple.com/shop/browse/home/campaigns/corporate_gifting
Apple Diversity. (2016, April 19). Retrieved from Apple: http://www.apple.com/diversity/
Apple Inc. (n.d.). Retrieved April 19, 2016, from http://financials.morningstar.com/ratios/r.html?t=AAPL
Apple Inc. Organizational Structure: Features, Pros & Cons - Panmore Institute. (2015). Retrieved April 21, 2016, from
http://panmore.com/apple-inc-organizational-structure-features-pros-cons
Apple Inc. - Research Methodology. (2015). Retrieved April 18, 2016, from http://research-methodology.net/apple-inc/
Apple Innovation - The keys to modern success. (n.d.). Retrieved April 17, 2016, from http://www.leadershiplime.com/appleinnovation.html
Apple - Investor Relations - Financial Information. (n.d.). Retrieved April 15, 2016, from http://investor.apple.com/financials.cfm
Apple Press Info Executive Profiles. Retrieved on April 11, 2016 from http://www.apple.com/pr/bios/
Apple Stores-Keep track of Apples retail stores worldwide. (2016). Retrieved from http://www.macrumors.com/roundup/apple-retailstores/
Author unknown. (2016). Empowering medical researchers, doctors, and now you. RearchKit and CareKit. Apple. Retrieved from
http://www.apple.com/researchkit/?cid=wwa-us-kwm-iphone
Author unknown. (2012). Counting every moment. The Economist. Retrieved from http://www.economist.com/node/21548493/
29
References
Dilger, D. E. (2013, February 12). Tim Cook: Apple's culture of innovation refuses to recognize any limits. Retrieved from
Apple Inside: http://appleinsider.com/articles/13/02/12/cook-apples-culture-of-innovation-refuses-to-recognize-limits
Elmansy, R. (2016, November 26). How Does Apple's Design Process Work. Retrieved April 20, 2016, from
http://www.designorate.com/how-does-apples-design-process-work/
Gokey, Malarie. (2016, March 12). Apple Loyalty Program Incentives Target the Big Spenders: Education and IT Companies.
Retrieved from http://www.techtimes.com/articles/4287/20140312/apple-loyalty-program-incentives-target-the-big-spenderseducation-and-it-companies.htm
Hughes, N. (2014). Review: iPhone connected BACtrack Mobile Breathalyzer with HealthKit support. Apple Insider. Retrieved from
http://appleinsider.com/articles/14/12/07/review-iphone-connected-bactrack-mobile-breathalyzer-with-healthkit-support
Is Apple The World's Most Innovative Company? (n.d.). Retrieved April 20, 2016, from
http://www.forbes.com/sites/susanadams/2015/12/08/is-apple-the-worlds-most-innovative-company/#3dd723867557
Johnson, R. (2015). Smartphone accessory delivers HIV results in l5 minutes. PBS News Hour. Retrieved from
http://www.pbs.org/newshour/updates/now-get-hiv-test-results-15-minutes-phone/
Keizer, G. (2014, February 18). Apple Takes Top Spot In Brand Value Computation. Retrieved April 20, 2016, from
http://www.computerworld.com/article/2487864/it-management/apple-takes-top-spot-in-brand-value-computation.html
Ketchen, D., and Short, J. (2013). Mastering Strategic Management. Washington, DC: Flat World Knowledge, Inc.
King, H. (2015, October 29). Who is buying Apple products? Old men. Retrieved from CNN Money:
http://money.cnn.com/2015/10/29/technology/apple-customers/
Kingsley-Hughes, A. (2013, April 25). Apple Spends Over $11.6m on R&D every day, but on what? Retrieved April 20, 2016, from
http://www.zdnet.com/article/apple-spends-over-11-6m-on-r-d-every-day-but-on-what/
30
References
Lafley, A.G., and Martin, R.L. (2013). Playing to Win: How Strategy Really Works. Boston, MA: Harvard Business Review
.
Lashinsky, A. (2015, March 26). Apple's Tim Cook leads different. Retrieved from Fortune: http://fortune.com/2015/03/26/tim-cook/
Leswing, Kif. (2015, December 15). Heres Apples Holiday Gift to Its Employees. Retrieved from http://fortune.com/2015/12/15/applegives-employees-gift-of-music/
Lev-Ram, Michael. (2014, October 2). Apple Unveils New Perks to Attract Talent. Retrieved from http://fortune.com/2014/10/02/appleemployee-perks
Love, J. (2014, October 3). Apple, employees raise $50 million for charity, program to expand globally. Retrieved from Mercury News:
http://www.mercurynews.com/business/ci_26649252/exclusive-apple-employees-raise-50-million-charity-program
Meyer, P. (2015, September 4). Apple's Generic Strategy & Intensive Growth Strategies. Retrieved April 20, 2016, from
http://revenuesandprofits.com/wp-content/uploads/2016/01/Apple-Revenues-FY-2000-to-2015.png
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31

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Organizational Strategy and Policies

Skill Builder Assignment For the Apple Case

Copyright 2016 Wm. R. Bigler

Integrated Cascade of Choices

Globally in existing and emerging markets

Maintain focus on research

Copyright 2016 Wm. R. Bigler

The set of capabilities required to win:

Innovative Production Process

Superior Customer Service

The support systems:

1. Strategically Valuable Resources

2. Should Apple Make Key Corporate Level Strategy Decisions?

Strategic Alliances, Partnerships, and Acquisitions

Providing Parenting Advantage

3. Model of the Leadership of Strategy

Key Dimensions of the Leadership of Strategy

Top Down Planning

Top Management Only

Copyright 2016 Wm. R. Bigler

4. Can Apple Fend Off the Four Threats to Sustainability of

Superior Customer Service

Copyright 2016 Wm. R. Bigler

5. Competitive and Cooperative Moves

Copyright 2016 Wm. R. Bigler

Copyright 2016 Wm. R. Bigler

7. Key Strategic Initiatives

Grow the business initiatives

Copyright 2016 Wm. R. Bigler

Key Strategic Initiatives - The Battle for the Office

Copyright 2016 Wm. R. Bigler

Key Strategic Initiatives

Key Strategic Initiatives

Copyright 2016 Wm. R. Bigler

Key Strategic Initiatives

Copyright 2016 Wm. R. Bigler

Key Strategic Initiatives

Key Strategic Initiatives

Copyright 2016 Wm. R. Bigler

Key Strategic Initiatives

Copyright 2016 Wm. R. Bigler

8. Executing the Apple Strategy Framework - Strategy

Apples business strategy can be summarized as product

Copyright 2016 Wm. R. Bigler

8. Executing the Apple Strategy Framework - Structure

Copyright 2016 Wm. R. Bigler

8. Executing the Apple Strategy Framework - Processes

Continued Investment in Research and Development

Copyright 2016 Wm. R. Bigler

Executing the Apple Strategy Framework - Rewards

Copyright 2016 Wm. R. Bigler

8. Executing the Apple Strategy Framework - People

Were working hard to

Great ideas push the world forward.

8. Executing the Apple Strategy Framework - Behavior

8. Executing the Apple Strategy Framework - Performance

Apple is an incredible company. Not only

Copyright 2016 Wm. R. Bigler

8. Executing the Apple Strategy Framework - Culture

Copyright 2016 Wm. R. Bigler

Key Process for Speedy Execution

Copyright 2016 Wm. R. Bigler

9. Forecast of Increases in Shareholder Value

Financial results for its fiscal 2016