Strategic financial management

Topics: Strategic management, Marketing, Product differentiation Pages: 18 (2836 words) Published: April 22, 2014
Contents

1.0 Introduction
The objective of this report is to evaluate whether Apple Incorporation has a strong business model to support its operations in the forthcoming few years. Besides that, it aims to evaluate a strategic option that should adopt by the Apple either a strategic business unit (SBU) or a corporate strategy. Internal and external analysis will be performed to analyse the current strategies that have been adapted by the Apple. The reporting currency is USD. Apple was founded by Steve Jobs and Steve Wozniak at 1976 and first IPO at 1980. Apple Incorporation now is a multinational corporation in American and one of the largest technology companies in the world. Apple Incorporation has more than 300 retail stores around the world. Furthermore, Apple Incorporation had 16 SBUs operating over 4 major geographical market segments:-

2.0 Internal Analysis
2.1 Financial Analysis
(Appendix A, B, C)
1. Profitability
Net profit margin is keep going up from year 2007 until 2010. Unstable return on equity and return on capital from year 2007 until 2010. 2. Efficiency
Debtor turnover increase from 24 days to 30 days.
Unstable creditor turnover day due to financial crisis at the year 2008 and 2009. Inventory turnover increase from 7.69days until 9.7 days.
3. Liquidity
Strong current ratio able to meet the liability
4. Gearing
Earnings per share keep increase year to year
Financial Evaluation Conclusion
Net profit margin of Apple Incorporation is increasing from year to year. Overviews on the profitability, Apple Incorporation maintain a good profitability, but it effect by economic crisis at 2007. Besides that, Apple Incorporation have strong liquidity and able to meet the liability. Apple Incorporation did not have long term borrowing. Apple Corporation have strong efficiency in maintain and reducing the creditor and debtor period. It will maintain the corporation reputation.

2.2 HRM Analysis
(Appendix D & E)
Ethic-“Play Hard Work Hard”
Employee growth-More than 48000 employees now
Benefits of employees:-
Training (skill & knowledge improve)
Financial education seminar
Life and health insurance
Vacations and holidays
Employee stock purchase plan(purchase share under market price) Reward(increase the workforce)
Relaxed and casual working environment
Leadership-Experienced and professional
Higher demand of skilled staff in web development and interactive content Hire expertise or professional employee(experienced and knowledgeable )

Apple incorporation have strong brand image. In past few years Apple hired many employers who have expertise and professional like Mike Markkula, John Scully and Robert Puette who is expert in marketing. Besides, Steve Jobs and Steve Wozniak who is Apple co-founder also have their professional which is expert in technologic and innovation. Timothy Cook also as COO of Apple Incorporation, he is vice president of Compaq and now he become CEO of Apple Incorporation on August 2011.

2.3 Operating Analysis
(Appendix F)
Primary Activities:-
Materials come from multiple sources, except certain components which is limited from IBM and Motorola. Components are manufactured by few third party manufacturers, however, final assembly of products will performed in own manufacturing. Retail store and online stores is available to purchase product. Promotion (Apple Incorporation, 2011)

education discount, save up to RM700 on a new Mac with educating pricing in Malaysia Apple Store Knowledgeable and expertise employees to sale and explain the products. Apple provides after sale service.

Support Activities:-
Firm infrastructure:-Strong leadership and internal control. Human Resource Management:-recruitment, on-going training, employee benefits Technology development:-Research and Development on new technologic and open new store. Procument:-Components come from multi manufactures.

Apple achieves a competitive advantage because of its...


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