Ian Williams Mgmt 490 April 10, 2012 Apple Inc.

Case Study Introduction/Performance Apple is a company that was founded in California in 1976 in Steve Jobs garage. Apple has designed, manufactured and marketed a range of personnel computers, mobile devices and digital music players and sold a variety of related software, services and networking solutions. There are many different products and services that Apple supplies; some of them being Mac, iPhone, iPad and iPod. As of 2010 when John Tarpey a financial analyst decided to do a full analysis of Apples financial statements, John main question he wanted to answer was how Apple continued to be outstanding even while the world economy was flat and negative. Another question John wanted to answer was did the negative changes outweigh the positive changes in 2010. After researching this question John found that the positive changes outweighed the negative changes three to one. John found that despite the downturn of the economy Apple Inc. continued to make major sales and continued to make money. EFAS Table Weight .2 Rating 3.5 Weighted Score .7 Comments -made most of their sales to consumers and business through retail and online stores. -Sept 2010, opened 317 retail stores-233 in the USA and 84 internationally -Company focused on the use of technology in education to help teachers teach and students learn. -Also sells hardware and software to businesses that make a lot of their new technologies. -During 2010 sales in Europe increased 58% compared to 2009. -During 2010 sales in Japan increased 75% compared to 2009. -During 2010 sales increased in Asia-Pacific by 160% compared to 2009.

I.

II.

opportunities
Small and MidSized Business

Education

.2

2.5

.05

Enterprise, Government, and Creative Overseas Sales

.05

1.0

.15

.15

3.0

.45

Threats
Steve Jobs health concerns .1 2.0 .2 -2004 Jobs announced he had Pancreatic Cancer. -Apple tried to keep it quite but share holders thought they had the right to know. -the increase in the capabilities of PCs,

Competition

.2

4.0

.8

Environmental laws

.05

1.0

.05

Seasonal Business Total

.05

2.0

.1

mobile devices and media devices. -competitors aggressively cut prices to compete. -so far in the companys existence they have never had any trouble with these laws. -disposal laws in other countries might have an impact of how Apple disposes of waste material. -always had an increase in sales in the first and fourth fiscal quarter compared to other quarters with certain holidays.

2.50

In the table above it shows the opportunities and threats that the company Apple Inc. will and is facing in this case study. Some opportunities that Apple is facing in this case study are that of education and overseas sales. Overseas sales have been a big part of Apples income since 2009. Some countries net sales have increase by 50% or more since 2009. Apple has also been trying to develop technology that can be used in class rooms because that is a big part of Apples growth over the years. So this is how the EFAS helps identify Apples opportunities and threats as a company. IFAS Table Weight Rate Strengths Product support and Services Research and Development .15 3 III.

.15

3.5

Patents Trademarks, Copyrights, and licenses Warranty

.15

3.5

Weighted Comments Score .45 -Apple has many different support services such as built in software, printed and electronic manuals, and online support. .53 -They compete at such a high level because they purchase a lot of third party businesses. -research and development expenses from 20082010 were from 1 billion to 2 billion dollars. .7 -owns patents trademarks and copyright too many of their products including iPhone, iPod, and Macs. .3 -Offered a one year warranty on most popular products from the date of purchase. -And a 90 day warranty on its service parts. -Apple has a limited supply of microprocessors, LCDs, and certain optical drives. -This subjected the company to significant supply and pricing risks. -Experienced increase of net sales in the first and fourth quarter of the fiscal year. -Also it saw an increase during holidays.

.1

Weaknesses
Supply of Components .1 3.5 .35

Seasonal Business

.1

3.5

.35

Legal Proceedings

.05

2.5

.25

Software Development Cost Total

.1

.6

- Pending legal proceedings may hold the company liable for things that happened in past. -This could intern hurt the company in the long run -The software that they use also takes a lot of money to develop. -2008 2009 the cost development was 71 million and 11 million.

3.83

The table above shows the different strengths and weaknesses of Apple Inc. during this case study. Some of the strengths that Apple has are product support and services and patents, trademarks, copyrights and licenses. Product support and services is a good strength to have because Apples products are really technical and people always need help figuring things out. Another big strength with Apple is their patents, trademarks and copyrights right because it protects Apple from people trying to use and resell their products. But on the lower points, Apple also has a few weaknesses as well. Some of the weaknesses are their legal proceedings and supply of components. Legal proceedings are a big thing when it comes to a company because a company can lose millions for numerous different things. Another weakness Apple has is their supply of components. If Apple doesnt have enough components to put a product together they might be able to meet the demand for the product, intern they will lose money. So this is how the IFAS table helps identify strengths and weaknesses. IV. SFAS Table Strategic factors Weight Rate

S1- Product support and Services S4-Warranty

.05

2.5

Weighted S I Score H N O T R E T R M E D I A T E .13 X X

L Comments O N G

.05

3.5

.18

W1- Supply of Components

.05

.1

Having great product support and services is big because people will be able to find help easily when having problems. X X X Having a great warranty on products is also important because people will feel safe knowing if anything happens to a product they are covered. X X Supply of components is a big weakness with Apple because of the demand for their products.

W4- Legal Proceedings O1- Small and Mid-Sized Business O4- Overseas Sales T2- Competition T1- Steve Jobs health concerns

.1

.3

.2

.8

.1 .15 .2

3.5 4 5

.35 .6 1

X X X Legal proceeding could be a big problem with in companies because of the fact that they could be sued for millions of dollars. X X X Apple makes most of their sales to small and midsized businesses who buy products in bulk which is always a constant source of profit. X X X The emergence of overseas sales has increased rapidly over the past four years. X X A lot of different companies sell different forms of PCs, MP3 players and laptops. X X X The health of the CEO is a big threat because he was the innovator of the company and knows it in and out.

Total 1 3.16 The strategy factor analysis table above combines two strengths and weaknesses together and two opportunities and threats together. This table is a great way for a company like Apple to examine the different areas in which they have to concentrate on. V. TOWS Matrix Internal Factors (IFAS) External Factors (EFAS) Strengths(S) - Warranty - Patents Trademarks, Copyrights, and licenses - Research and Development - Product support and Services Weaknesses(W) -Supply of Components -Seasonal Business - Legal Proceedings - Software Development Cost

Opportunities(O) -Small and Mid-Sized Business - Education - Enterprise, Government, and Creative - Overseas Sales

SO Strategies -A good strategy for Apple to use is the combination between research and development into devices that can be used in more educational areas. -A lot of Products that Apple has are great for different areas of education.

WO Strategies -Continue to work with small and mid-sized businesses. -Continue to make advances in the education field so they can get out of seasonal business. WT Strategies -Continue in the same path that Steve Jobs lead them in. - Try and lower software and development costs to stay ahead of the competition.

Threats (T) - Steve Jobs health concerns - Competition - Environmental laws - Seasonal Business

ST Strategies -Having a better support and service area can make the difference between them and other competitors.

The TOWS Matrix is used to illustrate the different strategies that Apple Inc. can use to cope with the different strengths, weaknesses, opportunities and threats that the company has. Two of the major factors that this strategy shows are that Apple needs strategies to deal will the emergence of certain competitors and also fact that they are losing the man that started the whole company. Some of the major factors that Apple is going to have to learn to cope with are that they dont make many sales seasonally. So this is how the TOWS matrix helps identify different strategies that a company can use to improve their sales.

VI.

Recommendations Some of the recommendations that I have for the Apple Company are as follows. I believe that they should continue to make sales overseas and with mid-sized and small companies. Also an area that I think could make them a lot of money is in the educational field. I believe that teachers and students could use many of the different products that they sell to learn easier and faster. And another major part of succeeding is to continue following the path that Steve Jobs has started them on. So these are a few of the recommendations that I have for Apple Inc.