Running head: ANALYSIS OF APPLE INC.

Analysis of Apple Inc. Perla Exinia MGT/521 September 18, 2011 Dr. Julie Ballaro

ANALYSIS OF APPLE INC.

Apple Incorporated Analysis Apple how it became to become a multi-billion dollar company? Steve Jobs changed Apples way of technology and new products have created a much increase in the companys profits. It will hard to predict what will happen to the future of the company, but a SWOT analysis measuring the strengths, weaknesses, opportunities, and threats to the business can help recognize the recent status of the company, and where it may go in the future. Strengths Apple has much strength to have become a top company in electronics in the World. The development of the products it has produced. Apple is well known name among many consumers. Apple also appreciates a towering level of brand awareness and brand recognition in products in markets it operates. Apple fans may marvel at the engineering artistry of the iPod, the iPhone, and the iPad, but a critical element of the company's success is decidedly low-tech: a chain of 326 brick-and-mortar retail stores (Apple Store Reinvented, 2011). The retail locations for Apple have not just been opened in the United States but globally. In just the beginning of 2011 Apple has seen more than 60 million people comparing the visits to Disney World. Last year, Apple stores generated SI 1.7 billion, or approximately 15% of the company's $76.346 billion in revenues. In a year that saw retail sales increase by 4.5%, Apple's stores, excluding online sales, posted a whopping 70% sales gain (Apple Store Reinvented, 2011). Apples website has that contains guided visits of every brand they offer to the consumers. Steve Jobs is very charismatic and has a vision. His mission: to turn the traits that people most closely associate with Jobsthe attention to detail, the secrecy, the constant feedback into the processes that can ensure Apples excellence far into the future (Lashinsky, & Burke,

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2011). One of the main strength that keeps Apple together is Chief Executive Officer Steve Jobs. As Laskinsky and Burke (2011) say that Jobs holds the company together; his methods have produced an organization that mirrors his thoughts even though he is not directly involved. Apple even though it can be impossible has a low turnover rate. Apple has powerful brands such as the iPod, the iPhone, iPad, and Mac computers. Weakness Though Apple has much strength, the company also has weaknesses. One of Apples weaknesses is the materials used in creating the products. Greenpeace drew attention to the fact that Apple scored poorly on almost all criteria. In particular, Apple scored badly with regard to the use of polyvinyl chloride (PVC) and brominated flame retardants (BFRs) and was criticized for not establishing a schedule for the elimination of these chemicals in its product lines (Schultz & Helleloid, 2010). Apple came in 11 of 14 when Greenpeace reports behind companies such as Nokia, Dell, Sony, and Hewlett Packard in toxic chemicals used in products. Greenpeace again challenged Apple in January, 2007, but this time at the Macworld Expo in San Francisco (Schultz & Helleloid, 2010). During the Macworld Expo, Greenpeace projected images of the of toxic scrap yards in Asia where electronic waste is and children are handling those toxic materials. When reports revealed the toxic material that Apple was using, the spokesperson for Apple chose not to make statements regarding the discoveries of Greenpeace for the second time. Apples Chief Executive Officer Steve Jobs health could affect the growth of the multibillion dollar company. When Steve returned to Apple to become an interim Chief Executive Officer in 1997-2010 the sales went up from $2.4 billion to $210.1 billion (Koch, Fenili, &

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Cebula, 2011). The health of a Companys Chief Executive Officer can affect the stock prices as it has with Apple with the health of Steve Jobs. In August 2004 when he announced that he had pancreatic cancer shares prices dropped down 3.6% from its previous day close, which in turn was down 2.0% (Koch, Fenili, & Cebula, 2011). Though many believe that Steve Jobs health will not affect Apples stock pricing there is statistical information that it has affected the pricing, but a solution has to be found to prevent pricing from dropping. Consumers consider the easy of Apples electronics are and consider the use of a Macintosh a toy. Apples image has also been tarnished because of the iPhone lacks important features for processing the mixture a phone and notebook. The price of Apples products compared to the competition is a weakness that affects consumers wanting the newest product on the market. Opportunity The impact that smart phones has on society that many consumers seek to have the newest phone on the market. Apples profits have continued to increase with the creation of new products. Profits at the computer-maker soared 78% during the last three months of 2010 to $6 billion, on a 70% surge in revenue of $26.7 billion (Graser, 2011). Apple continues to create new products to provide customers with new technology devices. As Lashinksy and Burke (2011) say Apple thinks differently about business an example is Microsoft. Often as not it simply ignores traditional notions of business opportunities. An executive who has worked at Apple and Microsoft describes the differences this way: "Microsoft tries to find pockets of unrealized revenue and then figures out what to make. Apple is just the opposite: It thinks of great products, and then sells them (Lashinksy & Burke, 2011). The opportunity for Apple to continue to grow

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through new products in the works and profits continue to soar because of customer satisfaction of products already provided. With the advancement in technology Apple will be able to create new products in a competing market. Customers are always looking for new and updated products, and attending to customers will provide new venues in creating what a customer wants. As Apple lowers the cost on consumer products and increases the quality of the products and services consumers will continue the purchase of the products. Threats Though Apple has much strengths in creating new products, the threats can be inevitable with the competition it has with Microsoft. The competition is not just from Microsoft, but with many other competitors such as Dell, Hewlett-Packard, Sony, Samsung, and Toshiba. These companys continue competition to Apple, Apple will need to stay up with the changing technology trends because there will be threats within the market groups. By seeking patents and copyrights, organizations can protect innovative products and ensure that they gain full value from their R&D investments. But sometimes such safeguards may not be adequate in hypercompetitive high-tech markets (Paper E2 Enterprise Management, 2011). Apples big competition is the iPhones release because the release the competition has produced smart phones. With technology changing and many companies using high-tech products Apple needs to stay up-to-date with the latest trends within the market. The competition may not change the strategies they use, but finding new ways to satisfy a consumer is always possible. Industry is witnessing a strong price war between PC producers. Stakeholders Internal & External Stakeholders

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Steve Jobs is an internal stakeholder who has a major role in the success of Apple. Apples employees are also stakeholders to the success of the company because in 1997 Apple was seeking a new CEO and an offer to Steve Jobs to rejoin the team (Finkle & Mallian, 2010). Steve Jobs has a group called the Top 100, who he meets with once a year for three days in an undisclosed location. Board members are also internal stakeholders and appoint the CEO. Through his tight-knit and largely long-serving executive team, Jobs quickly sees everything that goes on at the company. He also routinely reaches outside these inner and outer circles to collaborate on critical projects with key employees (Lashinsky & Burke, 2011). The consumers are who have kept Apple successful because consumers rating have soared profits for Apple. Without the demand consumers have for Apple products the companys profits would not have reached in the multi-billions. The vendor and suppliers are also the stakeholders of Apple because they do outsource the creating of some of their products. Suppliers commit to the Apple Supplier Code of Conduct as a condition of doing business with us. Drawing on internationally recognized standards, our Code outlines expectations covering labor and human rights, health and safety, the environment, ethics, and management commitment. Apple monitors compliance with the Code through a rigorous program of onsite factory audits, followed by corrective action plans and verification measures (Apple Inc, 2011). Consumer Wants and Needs Apple Stakeholders by listening to the consumer wants and needs when the first iPod was first released to the public in 2001. Four years later, Apple held seventy-five percent of a more than $4 billion market. But the strongest evidence of the iPod's popularity is not statistics; it is personal experienceone can hardly walk through a crowd without seeing the distinctive white ear buds (Peterson, 2007). Steve Jobs ex CEO who has resigned from Apple envisioned a

ANALYSIS OF APPLE INC. revolutionary process to bring together the world of computers and the need to consumers (Finkle & Mallin, 2010). Steve Jobs has brought success to Apple and stakeholders of Apple by providing customers technology needs. Stakeholders both internal and external need to work together in communicating the customers wants and needs to Apple executives. Expand your thinking beyond the simple product customer focus and envision what the customer sees: a web

of products and services purchased separately to meet his or her needs. Create integrated ways to meet these needs (Shelton, 2009). Apple's iPod and iTunes is an excellent source of a successful new solution by giving customers the opportunity to listen to their kind of music. Shelton (2009) gives an example of Apples iTunes, The combination disrupted the music industry by giving consumers what they wantedtheir own choice of music, competitively priced, and available "anytime, anywhere" electronically from purchase to play. This marriage was made possible by Apple's united innovation organization under Steve Jobs's leadership where technology innovation and business model innovations were developed and integrated to provide a seamless solution. Apples stakeholders have made a difference by taking part in the success of Apple and making them one of the most businesses admired by the consumers. One explanation is that it is the companies that have single-handedly changed the way we do everything from consume music and access information to design products and engage with the world around us. Because of its track record, consumers and businesses alike trust Apples inventions and its ability not only to churn out products that connect with customers but also to introduce a new way of doing things-to literally show us what is next (Bernasek, 2010). Conclusion

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Becoming an investor for Apple would be a significant opportunity. As an investor for a multi-billion dollar company in how technology is changing and creating new products to fulfill a consumers needs and wants. There are weaknesses that can be resolved as long as the company continues to look at the material waste to be away from civilian life. This may take a while to clean up, but as long as they take it into consideration and look at ways to make the products eco friendly they will continue to grow. Steve Jobs has been a great asset to Apple in increasing the revenue and products creation since becoming CEO of Apple in 1997. Though there are some threats the company will face because of the competition from other companies such as Dell or Hewlett-Packard, Apple has the opportunity to come up with new products based on their customer base. The opportunities that Apple has obtained through customer satisfaction can move the company to new product design. The strength the company has established through the products and the name itself holds strong based on reviews. The products have profited the company and the stakeholders of the company both internal and external. There are avenues a company can take to correct problems it currently is working on. Investing in Apple would be a smart choice for an investor looking for success.

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References

Apple Reinvents The Retail Store. (2011). Music Trades, 159(8), 46-50. Retrieved from EBSCOhost. Lashinsky, A., & Burke, D. (2011). INSIDE APPLE. (cover story). Fortune International (Europe), 163(7), 42. Retrieved from EBSCOhost. Schultz, P. L., & Helleloid, D. (2010). APPLE, INC., AND GREENPEACE IN 2008. Journal of Critical Incidents, 342-49. Retrieved from EBSCOhost. Koch, J. V., Fenili, R. N., & Cebula, R. J. (2011). Do Investors Care If Steve Jobs Is Healthy? Atlantic Economic Journal, 39(1), 59-70. doi:http://dx.doi.org/10.1007/s11293-010-9261-z Graser, M. (2011). Apple posts $6 billion in profits. Daily Variety, 310(13), 6. Retrieved from EBSCOhost. Paper E2 Enterprise Management. (2011). Financial Management (14719185), 45-48. Retrieved from EBSCOhost. Finkle, T. A., & Mallin, M. L. (2010). STEVE JOBS AND APPLE, INC. Journal of the International Academy for Case Studies, 16(7), 31-40. Retrieved from EBSCOhost. http://images.apple.com/supplierresponsibility/pdf/Apple_SR_2011_Progress_Report.pdf Retrieved September 17, 2011 Peterson, W. R. (2007). The Role of Consumer Preference Development in Incremental Innovation: How Diamond Multimedia Helped Create the iPod. Texas Law Review, 85(6), 15531577. Retrieved from EBSCOhost. Shelton, R. (2009). INTEGRATING PRODUCT AND SERVICE INNOVATION. Research Technology Management, 52(3), 38. Retrieved from EBSCOhost. Bernasek, A. (2010). The Worlds Most Admired Companies. Fortune, 161(4). 121. Retrieved from EBSCOhost