Contents

I. Current Situation.................................................................................................2

Bringing the best personal computing experience to students, educators,

creative professionals and consumers around the world ................................2

2. Objectives....................................................................................................2

Focus on the qualities, customs, standards, and principles that the company
believes will help it and its employees succeed..............................................2

Empathy for Customers/Users.........................................................................2

Aggressiveness/Achievement..........................................................................2

Positive Social Contribution.............................................................................2

Innovation/Vision.............................................................................................2

Individual Performance....................................................................................2

Team Spirit......................................................................................................2

Quality/Excellence...........................................................................................2

Individual Reward............................................................................................2

Good Management
........................................................................................................................2

II. Corporate Governance.......................................................................................2

III. External Environment: (EFAS Table; see Appendix 1).......................................3

IV. Internal Environment: (IFAS Table; see Appendix 2).........................................5

V. Analysis of Strategic Factors .............................................................................7

VI. Strategic Alternatives and Recommended Strategy........................................8

VII. Implementation............................................................................................... 9

VIII. Evaluation and control....................................................................................9

Appendix
 APPLE COMPUTER

I. Current Situation
A. Current Performance

• 14 January 2009- Jobs announced that he would be taking a six-month

leave of absence, until the end of June 2009, to allow him to better focus
on his health and to allow the company to better focus on its products
without having the rampant media speculating about his health.
• 27 January 2010- Apple announced a large screen, tablet-like media device
known as the iPad.

• Apple released the fourth generation iPhone, which introduced video

calling, multitasking, and a new uninsulated stainless steel design, which
acts as the phone's antenna.
• January 6 2011, the company opened their Mac App Store, a digital
software distribution platform, similar to the existing iOS App Store.
• 11 March 2011, Jobs announced a U.S. launch date.

B. Strategic Posture

1. Mission

• Bringing the best personal computing experience to students, educators,

creative professionals and consumers around the world

2. Objectives

• Focus on the qualities, customs, standards, and principles that the company
believes will help it and its employees succeed
• Empathy for Customers/Users
• Aggressiveness/Achievement
• Positive Social Contribution
• Innovation/Vision
• Individual Performance
• Team Spirit
• Quality/Excellence
• Individual Reward
• Good Management

II. Corporate Governance

A. Board of Directors

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Millard Drexler Bill Campbell Albert Gore Jr.

Chairman and CEO Chairman and former Former Vice President
J. Crew CEO of the United States
Intuit Corp.

Steve Jobs
CEO
Apple

Ronald D. Sugar, Ph. D. Andrea Jung Arthur D. Levinson,

Former Chairman and Chairman and CEO Ph. D.
CEO Avon Products Chairman
Northrop Grumman Genentech
Corporation

B. Top Management
CEO-Steve Jobs
Chief Operating Officer -Tim Cook
Senior Vice President and Chief Financial Officer -Peter Oppenheimer
Senior Vice President iPhone Software- Scott Forstall
Senior Vice President Industrial Design- Jonathan Ive
Senior Vice President Retail- Ron Johnson
Senior Vice President Mac Hardware Engineering- Bob Mansfield
Senior Vice President Worldwide Product Marketing- Philip W. Schiller
Senior Vice President Software Engineering -Bertrand Serlet
Senior Vice President and General Counsel - Bruce Sewell
Senior Vice President Operations -Jeff Williams

III. External Environment: (EFAS Table; see Appendix 1)

A. Natural Physical Environment: Sustainability Issues

• Manufacturing - including extraction of raw materials and product assembly

accounts for 45 percent of Apple’s total greenhouse gas emissions.
• 4,456,000 metric tons of greenhouse gas emissions.
• One percent of Apple’s total greenhouse gas emissions are related to recycling.
• 62,000 metric tons of greenhouse gas emissions.
• Apple’s facilities - including corporate offices, distribution hubs, data centers, and
retail stores - account for 3 percent of our total greenhouse gas emissions.
• 278,000 metric tons of greenhouse gas emissions.
• Five percent of Apple’s greenhouse gas emissions are a result of transporting our
products from assembly locations to distribution hubs in regions where our
products are sold.
• 510,000 metric tons of greenhouse gas emissions.

B. Societal Environment

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1. Economic Forces

• The laptop market growth is high. (O)

• The current economic crisis is unlikely to affect Apple retail store operations.
(O)

• Apple could also benefit from lower cost leases. (O)

• The long lasting recession may impact the sales of the company due to high
prices of the products and services. (T)

2. Technological

• The network for delivery is being enhanced and upgraded to reap new business
opportunities to telecommunication industry. (O)
• The enhancement of technology bring unsecured problem such as sniffing,
spoofing and etc. (T)

3. Political-Legal

• Different countries have different legislations and these in some ways restrict the
companies or give opportunities to the company. (O)
• NAFTA, European Union and other regional trade open doors to market in
Europe, Asia, Latin America that offer enormous potential. (O)
• Political uncertainties caused by terrorism activities are directly impacting the
overall business of the company. (T)
• The company relies on access to patent and intellectual property obtained from
third parties. The company might unknowingly encounter infringe issues with
existing patents of others. (T)
• Beatles lawsuit against the company may negatively affect the company’s
reputation. (T)

4. Socio cultural

• Again Anti-American agenda may cause potential customers to but from another
company.
• A generally aging British population, so many may be put off by the technology
• As much as it is a iPod culture, it can go away as quickly as it came. People may
find something else which is better and more value for money.

C. Task Environment
i) Threat of new entrants

• For possible competitors it’s hard to enter as cost to do are high. (O)

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ii) Bargaining power of buyers

• Buyers aren’t in the position to force companies to charge lower prices on the
goods sold because high switching costs for consumers, consumer fluctuation is
low. (O)
iii) Threat of substitute product
• A considerable amount of substitute products threatens Apple’s market situation
as consumers easily can switch to another types of products. (T)
iv) Bargaining power of suppliers

• Several of suppliers. Processors and computer memory (Motorola), Office for

Mac (Microsoft), music (BMG), movies (Disney). (O)
• Raise prices and break the dollar per song model issues. (T)

• Sign exclusive contracts with other online services issues. (T)

v) Rivalry among competing firms
• Rivalry high. Personal desktops and notebooks (Dell, HP, Toshiba). Operating
systems (Linux, Microsoft). Mp3 (iriver, Samsung Creative). (T)

IV. Internal Environment: (IFAS Table; see Appendix 2)

A. Corporate Structure

• Geographic basis-operating segments consist of the Americas, Europe, Japan, and

Asia-Pacific. (S)
• Unstable management-Change CEO for several times. (W)
.
B. Corporate Culture

• In organizational hierarchy which is flat versus height, casual attire. (S)

• Jobs often walked around the office barefoot even after Apple was a Fortune 500
company. (S)
• Apple has a reputation for fostering individuality and excellence that reliably
draws talented people into its employ, especially after Jobs' return. (S)
• To recognize the best of its employees, Apple created the Apple Fellows program,
awarding individuals who made extraordinary technical or leadership
contributions to personal computing while at the company. (S)

C. Corporate Resources

1. Marketing

• Extend on the Apple brand name and link to the established meaningful
positioning. (S)
• Extend on Apple image of innovation, quality, and value. (S)

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• 2% share of the U.S and U.K. PDA/Phone market (W)

• Regular basis advertisement appeared to attract public awareness. (S)

• Massive rollout worldwide at all reputable major retailers in the form of online,
showrooms or in all cell phone providers. (S)
• Products can fulfill customers’ expectation. (S)
• Compatible price is higher than other products. (W)

2. Finance

• Constantly increasing in sales and profit. (S)

• Operating income is increased tremendously at Americas, Europe, Japan, retail
and others segments. (S)
• Upward trend. (S)

• Constant dollars indexing of depreciation would adjust depreciation deductions to

reflect changes in the general price level. (W)
• Positive financial growth does support the corporation past and pending strategic
decisions, especially in gaining more customers shares and develops sustainable
competitive advantage. (S)
3. Research & Development

• Company is heavily dependent upon its ability to ensure a continual and timely
flow of competitive products, services and technologies to the marketplace. (S)
• Continue develop new products and technologies. (S)
• Enhance existing products offerings and intellectual property through licensing
and acquisition of third-party business and technology. (S)
• R&D expense was $1.8 billion, $1.3 billion and $1.1 billion in 2010, 2009 and
2008. (S)

4. Operations and Logistics

• In 2010, U.S.44% largest geographic marketplace. (S)
• Sole-sourced third-party vendors in China perform final assembly of substantially
all of the Company’s Macs, iPhones, iPads and iPods. (S)
• A combination of unexpected demand, operations inefficiencies, and
miscommunication led to many unsatisfied customers who ordered on-line and
received repeated broken promises on delivery dates. (W)
• GPS updates and shipment status reports. (S)
• Green supply chain" through elimination of paper way bills, Shift product
transportation from air to ocean and reducing the carbon footprint. (S)

5. Human Resources Management

• Provide the company with the necessary personnel to assure superior

performance. (S)
• Ensure proactive internal career progression. (S)

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• Partnership arrangement around the world with different organizations like

Skillnet in Ireland, aiming at facilitating the mutual involvement of management
and employees in organizational development. (S)
• Analysis already showed the harmonic connection between corporate strategy and
HRM strategy, the HRM department and the employees. (S)
• Staff appraisals through lifelong learning, management development, promotion,
reward systems. (S)

6. Information Systems

• Apple is delivering seamless integration with and access to the Internet throughout
the products and services. (S)
• Providing the latest version of web browser- Safari 5, which is compatible with
Macs and Windows-based computers. (S)

• Employ technology known as Near-Field Communication (NFC) in the iPad and

iPhone which enabling consumers to use their mobile devices to make payments
in stores and allowing Apple to cut the credit card processing fees it currently
pays. (S)

V. Analysis of Strategic Factors

A. Situational Analysis (SWOT) (SFAS Matrix; see Appendix 3)

1. Strengths
a. Geographic basis-operating segments consist of the Americas, Europe, Japan,
and Asia-Pacific.
b. Regular basis advertisement appeared to attract public awareness.
c. Constantly increasing in sales and profit.
d. Provide the company with the necessary personnel to assure superior
performance.
e. Partnership arrangement around the world with different organizations in
aiming at facilitating the mutual involvement of management and employees
in organizational development.

2. Weaknesses

a. Unstable management-Change CEO for several times.

b. 2% share of the U.S and U.K. PDA/Phone market.
c. Compatible price is higher than other products.
d. A combination of unexpected demand, operations inefficiencies, and
miscommunication led to many unsatisfied customers who ordered on-line and
received repeated broken promises on delivery dates.
e. Constant dollars indexing of depreciation would adjust depreciation
deductions to reflect changes in the general price level.

3. Opportunities

a. The current economic crisis is unlikely to affect Apple retail store operations.
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b. The laptop market growth is high.

c. The network for delivery is being enhanced and upgraded to reap new business
opportunities to telecommunication industry.
d. Several of suppliers. Processors and computer memory (Motorola), Office for
Mac (Microsoft), music (BMG), movies (Disney).
e. For possible competitors it’s hard to enter as cost to do are high.

4. Threats

a. The long lasting recession may impact the sales of the company due to high
prices of the products and services.
b. The enhancement of technology bring unsecured problem such as sniffing,
spoofing and etc.
c. Raise prices and break the dollar per song model issues.
d. Sign exclusive contracts with other online services issues.
e. Rivalry high. Personal desktops and notebooks (Dell, HP, Toshiba). Operating
systems (Linux, Microsoft). Mp3 (iriver, Samsung Creative).

VI. Strategic Alternatives and Recommended Strategy

A. Strategic Alternatives
1. Growth through diversification: Positive growths with joint ventures with
other strong company.
a. [Pros]: producing diversified products.
b. [Cons]: have to compete against the rivalry

2. No Change Strategy: To remain competitive and stimulate customer demand,

Apple must manage frequent product introductions and transitions.
a. [Pros]: produce innovative products to create brand loyalty customers.
b. [Cons]: low market share and high operation market cost

3. Retrenchment Strategy: temporary not available for Apple Computer because

they are in the growth direction.

B. Recommended Strategy

1. To continue a product differentiation strategy, Apple continue its appropriate

management of innovation dilemmas and maintain the five leadership roles are
institutional leader, critic, entrepreneur, sponsor, and mentor to facilitate the
innovation process.

2. Apple needs to focus on expanding their current R&D efforts.

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3. Apple should depend heavily on the ability to produce new and innovative
products and technology.

4. Apple should take advantage of is to better position themselves in the market.

5. Apple should improve its distribution channels by promoting internet and

telephone sales, as Dell has done.

VII. Implementation
A. Implement the strategy alliance to optimizing cost and development process
with innovation so that they can sustain and compete in the market.
B. Implement the sophisticated network security and internal control measures,
there can be no assurance that a system failure or loss or data security breach
will not materially adversely affect Apple’s financial condition and operating
results.
C. Mobile communication and media devices, such as iPhones and 3G enabled
iPads, are subject to certification and regulation by governmental and
standardization bodies, as well as by cellular network carriers for use on their
networks.

VIII. Evaluation and control

A. Apple can expect a prosperous future with steady increase in sales net earnings
over the past 3 years. It is almost 200% sales increase from 2004-2005 and
over 80% market shares in iPods.

B. Must continue to develop and acquire new strengths such as innovation, high
quality products, and good marketing plan.

C. Must minimize number of faulty components of its products to increase R&D

efforts and maintain customer loyalty.

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