APPLE INC.

A Case Analysis in Strategic

Management

MWF 12:00 PM – 1:00 PM / 1st Semester / S.Y. 2018-2019

PREPARED BY: PREPARED FOR:

Ibardaloza, Myra Prof. Dante P. Narciso
Malapit, Jessa MGT45, Instructor
Meneses,Mikhee Shane
Onia, Diana Lyn
Ramirez, Mary Ann
Siapno,Katherine Irish
Soriano,Emmanuel
Tabia, Chin
Viray, Nhicole
 INTRODUCTION

 Apple is the world’s largest corporation based on a market capitalization of about $500
billion, approximately $200 billion more than the 2nd largest company. Apple designs,
manufactures, and markets the world’s single most popular Smartphone, the IPhone,
even though apple has only about 15% of the global market share in Smartphone.

 Jobs and Wozniak started out building the Apple I in Jobs' garage and sold them without
a monitor, keyboard, or casing (which they decided to add on in 1977). The Apple II
revolutionized the computer industry with the introduction of the first-ever colour
graphics.1 Sales jumped from $7.8 million in 1978 to $117 million in 1980, the year
Apple went public

APPLE LOGO
 STATEMENT OF THE PROBLEM
 APPLE’S IDENTIFIED PROBLEM – IOS update, causing Apple phones shutting down.

 All rechargeable batteries are consumable components that become less effective as they
chemically age and their ability to hold a charge diminishes. Time and the number of times a
battery has been charged are not the only factors in this chemical aging process.

 Device use also affects the performance of a battery over its lifespan. For example, leaving or
charging a battery in a hot environment can cause a battery to age faster. These are
characteristics of battery chemistry, common to lithium-ion batteries across the industry.

 A chemically aged battery also becomes less capable of delivering peak energy loads, especially
in a low state of charge, which may result in a device unexpectedly shutting itself down in some
situations.

OBJECTIVE OF THE PROBLEM

 Only cautiously engage in the low-end of the market which can tarnish Apple's reputation as a
technology leader.

 Carefully manage brand exposure.

 Continually invest in research and development to stay ahead of and lead radical product and
technology discoveries.

 Maintain and upgrade design appeal to reduce the prospect of new entrants.

 Because the personal computer, consumer electronics, and mobile communication industries
are characterized by rapid technological advances, the company's ability to compete
successfully is heavily dependent upon a continual and timely flow of competitive products,
services, and technologies to the marketplace.

 Enhancement of existing products in all areas (computer hardware and peripherals, consumer
electronics products, mobile communication devices, systems software, applications software,
networking and communications software and solutions, and Internet services and solutions)
will maximize the value and the life of products
 Vigilant management of costs - to maintain pricing flexibility and improve competitive position
relative to low-priced competitors.
 Leverage Apple's 70% share in the music market to strengthen the performance of other
applications.
 Develop the top management team and a succession strategy to reduce over-dependence on
one individual to advance the interests of the company. With Apple's growth strategy, it is likely
that Jobs will soon be stretched too thinly, if he is not already

ALTERNATIVE COURSES OF ACTION

 #1 – Leverage their current strength, Apple should focus on their premium smartphone brand,
the iPhone.
 By focusing on customers willing to pay more and maintaining a premium price at the cost of
unit volume, Apple sets up an artificial entry to barrier to competitors.
 Taking into account that premium smartphones are the minority in global smartphone sales by
volume, they provide the bulk of profit. Each iPhone Apple makes costs somewhere around
$200, and is sold for over $600. The profit margins are far better for premium smartphones than
nearly any other segment of electronics. That is why it is significant for Apple to widen its gap
against competitors like Samsung.
 Apple must perform two tasks. (1) Apple needs to continue to improve their iOS software for
users. Creating new tools and interface features for every iPhone launch. (2) Apple’s must
ensure proper vetting and marketing messages when introducing new iOS software into their
products.
 #2 Continue to improve and innovate the Apple Watch
 Becoming selective in what products to improve is very tough. We feel that Apple has
established a presence in the wearable technology which a huge market to consider. The Apple
Watch product is designed to become an intricate part in people’s daily lives. This is a new
product category for Apple and we consider them to still be in the learning stages of the product
life cycle. Apple should push the product into the realm of consumers to feel that they cannot
live without this product because it’s doing so much for them and then it will continue to be
adopted by consumers.
 Apple Watch will continue to be a flop until they can establish a 4G connection and make it a
stand alone device.
 #3 Increase research and development spending
 Compared with its resources Apple has remained relatively quiet It spent just 3.5 percent ($8.1
billion) of its $233 billion in revenue in fiscal 2015 on research and development, a lower
percentage than every other large U.S. technology company, data compiled by Bloomberg.
 Under CEO Tim Cook, Apple leans heavily on advances made by suppliers, focusing on crucial
technology such as semiconductors, according to Ram Mudambi, a business school professor at
Temple University in Philadelphia.
Apple can’t rely on its suppliers for everything. Expanded research outlays significantly over the
next three years, to $8.1 billion in fiscal 2015, up from $6 billion in 2014 and $4.5 billion in 2013.
This would display to investors its commitment to innovate and evolve new technology that
enhances and expands its existing product range
 #4 Focus on improving digital media content access in China
 Apple must not abandon the Chinese market because of its lack of market share. The volume of
sales alone justifies Apple’s presence in the smartphone market.
 The company must reestablish its iBooks and iTunes Movies services in the country. Earlier in
2014 after less than seven months of operation following pressure from regulators Apple was
asked to shut down their online market presence, which is a problem.
 #5 Continue the expansion of Apple markets
 The stores represent an important source of revenue for Apple and serve as an interactive
advertisement for the Apple brand. Their success has been unmatched from the other brands.
 Apple’s integrated system holds a significant advantage over other industry systems relying on
Microsoft Windows, yet some customers have not experienced the seamless interoperability of
all Apple products.

ANALYSIS OF DATA
 IDENTIFY THE ORGANIZATION’S EXTERNAL OPPORTUNITIES THREATS
 CONSTRUCT A COMPETITIVE PROFILE MATRIX (CPM)
 CONSTRUCT AN EXTERNAL FACTOR EVALUATION (EFE) MATRIX
 IDENTIFY THE ORGANIZATIONS INTERNAL STRENGHTS AND WEAKNESSES
 CONSTRUCT AND INTERNAL FACTOR EVALUATION (IFE) MATRIX
 SWOT analysis

RECOMMENDATIONS
NEW POLICIES
 The internal and external factors discussed in this SWOT analysis indicate that Apple Inc.
possesses major strengths to effectively address organizational weaknesses. The company can
also use these strengths to exploit opportunities, such as the expansion of its distribution
network. Moreover, the company can use its strong brand image and rapid innovation processes
to successfully develop and launch new product lines. However, Apple faces the significant
threats of aggressive competition and imitation, which are major challenges affecting players in
the global market for consumer electronics, computer hardware and software, and online digital
content distribution services.
 Based on the strategic issues highlighted in this SWOT analysis of Apple Inc., a recommendation
is to continue the aggressive and rapid innovation involved in developing the company’s
products..

CONCLUSION
We can learn so much from Apple’s marketing strategy because they staked their claim,
amplified their messages, and impacted the world for the better. Apple’s marketing and
branding strategy had the ability to invoke an internal response from their tech savvy consumers
with their marketing messages. Steve Jobs knew that for a business’s product to be
“remembered” there must be a clear message for them to remember and identify with.
With Apple’s 2007 launch of the iPhone they “Reinvented the phone” by integrating software
breakthrough with the design of the user user in mind. Apple was a pioneer in the personal
computer and electronic industry they told their consumers that creativity was at their
fingertips.