Apple Strategy Case Study

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Strategic Management

Final Report for Case # 10

Prepared by :

Hala Al-Ghawi
&
Noor Al-Saleh

Company’s Mission Statement:
Apple ignited the personal computer revolution in the 1970s with the Apple II and reinvented the personal computer in the 1980s with the Macintosh. “Think Differently” is a concept Apple executes with perfection, Innovation being the core competency of the company. The company 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. A challenge for the company is to shift towards environment friendly production of differentiated goods. As differentiation will ensure that the current profitability of the company is sustained. Apple will also strive to provide added opportunities for growth and enrichment of company personnel.

Company’s Vision Statement:
Become the world leader of innovation in the computer market

Stage 1: The Input Stage
a) External Factor Evaluation (EFE) Matrix
Key External Factors| Weight | Rating | Weighted Score| Opportunities|
1. Constant growth of PC and mobile. Expected sales of tablets in 2011 are 70 million, and are expected to balloon to 246 million within three years. Customers are preferring tablets over PCs| 0.10| 4| 0.4| 2. More than half of Apples sales are from retails outside the United States. | 0.10| 4| 0.4| 3. Increasing demand of online music and others applications like cloud based services| 0.07| 3| 0.21| 4. Acquisition of competitor business (Apple’s cash balance is a noteworthy feature in its financials. The company has $ 11261 million in terms of cash and cash equivalents. this cash can be used for further acquisitions | 0.11| 1| 0.11| 5. Virus threats are becoming an increasing burden to all IT companies who have computers, so if Apple R&D department / through joint venture invest in developing a new anti-virus software they will gain new market share| 0.07| 1| 0.07| 6. If Apple R&D invest in developing an CRM &/ ERP solution for business they will share Microsoft & Oracle their market share| 0.10| 1| 0.1| Threats|

1. EPS for Google is higher compared to Apple (27.29 versus 20.99)| 0.03| 3| 0.09| 2. Gross Margin% for Apple is lower compared to Google, RIMM | 0.05| 3| 0.15| 3. $ Revenue is higher for HP compared to Apple (127.16B versus 87.45B)| 0.04| 3| 0.12| 4. Dell is driving down costs through direct sales approach, accordingly decreasing its inventory (using JIT manufacturing). It has advantage over its rivals in quality and production costs| 0.07| 1| 0.07| 5. Window’s media player comes bundled with Window’s operating system. This results in higher sales compared to Apple’s iTunes| 0.02| 3| 0.06| 6. Rival firms are getting better at quickly duplicating successful Apple’s products, and offering them at lower prices.| 0.09| 4| 0.36| 7. High product substitution effect in the innovative and competitive technology market, global shipments of PCs fell 3.2% that 1st quarter of 2011 because many consumers bought tablets instead| 0.06| 3| 0.18| 8. Apple’s computer hardware price is the biggest compared with others competitors in the industry with price = 347| 0.04| 1| 0.04| 9. EMC Corporation has the highest E/P, which indicates higher expected earnings growth, while Apple has a fair value of E/P| 0.05| 3| 0.15| Total | 1.0| | 2.51|

b) The Competitive Profile Matrix (CPM)
| Apple| HP| Dell|
Critical Success Factor| Weight | Rating | Score | Rating | Score | Rating | Score | 1. Financial Position| 0.15| 4| 0.6| 3| 0.45| 2| 0.3| 2. Global Expansion | 0.13| 3| 0.39| 2| 0.26| 4| 0.52| 3. Product Quality| 0.15| 4| 0.6| 2| 0.3| 3| 0.45| 4. Sales Distribution |...
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