Apple Inc: Performance in a Zero Sum World Economy

Navin Doraselvam (809146) Tan Hua Hong (805523) Nor Azman Bin Md Isa (808541) Valarmathy a/p Ramasamy (810269) Wan Norazlin (810994)

Outline
Brief History of Apples Inc Where we are Apples Now Vision and Mission External Analysis Internal Analysis Strategic Analysis SWOT Matrix TOWS analysis Recommendations Strategic implementation and desired results

History 1976-1984
Wozniak and Jobs form the Apple Computer Company on April Fool's Day 1976 in California garage . Early success marketing & technology innovation The new Apple is the first personal computer able to generate color graphics and includes a keyboard, power supply and attractive case. Monthly orders reach a $1 million annual sales rate. 1982- 583.3 million Macintosh- user friendly featurers 1983- entry of IBM in PC market

History 1985-1997
1985- departure of its founder ,Jobs & Wozniak Macintosh sales gain momentum 1990- Apples sold more PC net sales growth over 7 billion 1993-1995- PC using Microsoft Windows start to take place- IBM & Apple go down Apple lost competitive advantage 1997- Jobs return to Apple as CEO

History 1998-2001
Jobs Terminated many of the company project.- iBook & AirPort Product series Apples open own retail stores Introduced iPod & iTunes Music store- receive positive feedback

History 2002- 2006

Introduced iMac failed to live up the company sales expectation. 2006- introduce iMac & MacBook Pro using intel based Machines iPod change Apples inc as a new market leader iTunes Music stores- create 1 billion a year 2007- present Enter new era Jobs change business direction to mobile electronic device -iPhone & Apple TV Apple launch the App Store to sell third party application for the iPhone & iPod Touch- 1 million daily on everage Apples become 3rd largest mobile handset supplier in the world iPhone

Apples Inc in 2010

Steve Jobs having health concern iPad release Jan,2010 Apples market exceed competitor for first time since 1989 June 2010, iPhone 4th generation release Sept 2010, Ipod Nano ,iPod Touch & button introduce.-Apples Inc fly high

SWOT Analysis
STRENGTHS
1. 2. 3. 4. Strong investment in research & development Company committed & business strategy A charismatic leader- Steve Jobs. Utilization on direct & indirect distribution channelretail store. 5. Producing innovative & high end user products. 6. Make music website-iTunes Store 7. Breadth of Product line. 8. Apple Brand Image 9. Strong Customer base in USA 10. Apples Inc strong in financial position 1. 2. 3. 4. 5. 6. 7.

WEAKNESSES
Outsourcing partners few in market Apple management is not stable-dependents on Steve Job Majority of their retail store only in USA. Price risk Loss of Supply of components -shortage Not Compatible with Third Party Product. High expenses in R& D investment

OPPORTUNITIES
1. 2. 3. 4. 5. 6. 7. 8. 9. Should expand its retail store in other country Technological Innovation Increase in world mobile & PC technology market Strategic Alliance Expansion of retail segment Market segmentation based on geographical basis S. Jobs Risk Tactic- eliminated some projects Creative more compatibility product. Increase sales of online purchase 1. 2. 3. 4. 5. 6. 7. 8. 9.

THREATS
Aggressive competition High competitive products Price sensitive Poor health of Steve Jobs. Outsourcing partners Exchange rate fluctuations. Country rules & law. Dell & HP as major competitor Imitate products

SWOT Matrix
S-O Strategies
Increase awareness through the web of the immunity of Mac products to worms and viruses. (S5, O1) Advertise using individuals that will link Generation X & Y to the iTunes and other related products. (S1, O2, O4, O5, O6) Using movies and music groups that are geared towards Gen X and Y to promote computers and laptops. (S3, S5, O2, O5, O6) Increase and promote the compatibility to Window operating system. (S5,T1) Promote the originality of Apple computers and the different style and stable system that is slightly more but worth the price difference in style, stability and speed. (S2, S5, T2, T4, T5)

S-T Strategies

W-O Strategies Increase ties with Microsoft and Intel and their products.(W1, W2, W4 O2, O3) Promote to business the safety of having a worm and virus free computer by using Mac. (W2, W4, O1, O5, O6) W-T Strategies Improve relationship with Microsoft and Intel so that companies will see them as compatible. (W1, W2 T1) Increase productivity and turn around of high demand products to compete with Dell and HP (W5, T2)

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 other than 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. 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.