Why invest in Apple Inc.?
Daniel A. Martinez
March 12, 2012
Diane Hunt Wagner
This paper presents a brief discussion and analysis of Apple Inc. using the Strengths, Weaknesses, Opportunities and Threats (SWOT) management model as a way of providing the reader an “at a glance” perspective prior to making a decision to invest in the firm. Some of the company’s financial figures obtained from its recently published 2011 unaudited financial reports such as the income statement, balance sheet and cash flow reports are included in the analysis and will be used as a reference for the explanation of the concepts here reviewed. Internal and external stakeholder identification and the fulfillment of their wants and needs are discussed also as part of this context.
Why invest in Apple Inc.? (SWOT Analysis)
Apple® is a publicly traded company in NASDAQ under the APPL tickler and headquartered in Cupertino, California that currently employs 46,600 employees (Datamonitor, Apple Inc.). The Fortune 500 magazine rating of 2011 ranked Apple 35th in the list of the largest companies in the United States (“Fortune 500 And the winners are....,” 2012). This ranking is determined based on company sales and profits. Apple Inc had declared revenues in 2012 of $108, 249 (in millions of USD) for fiscal year of 2011, an increase of 66% against the previous year end close of $65,225 ("Www.apple.com", 2012). It is expected that the company climb in its ranking from the previous year once the 2012 Fortune 500 official listing becomes available in the magazine’s next edition. The company closes its fiscal year on September 24th every year. Apple is classified as a technology industry company that designs and markets the following hardware; Mac personal computers, iPhone smart telephones, iPad personal tablet computers, and iPod personal mini-computing and music playing devices. The company also operates their own music sales store using their software called iTunes, for downloading music and media through internet service. (Datamonitor, Apple Inc.) Sales of iPhones, iPads and Mac computers contributed to the strong revenue and profit increases of 2011 versus 2010 while iPod sales had a slight decline versus last year ("Www.apple.com", 2012). Apple income statement figures present a very strong company with continued growth in the past five years. New product introductions, innovations paired with strong leadership and management can be attributed to the consistent growth trend. The company SWOT analysis is presented below.
|STRENGHTS |WEAKNESSES | |Brand image – provides an edge over competitors |Patent infringement lawsuit – May affect financial condition and | |Strong financial performance –Strengthens investor’s confidence and |operating results | |provides capital for future growth avenues. |Product recalls – Faulty equipment due to low or poor quality of | |Focused R&D – Driving innovation and consolidating its market position|contractors | |Employee acculturation and training – Providing “best in class” |Price – Normally higher than their | |customer service and retention. |competition("Www.123helpme.com", 2012 ). | |Marketing – Expansion of products and services nationally and | | |internationally | | |OPPORTUNITIES |THREATS...
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