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Lech. Of STRATEGY MANAGEMENT SUBMITTEDBY:Amit gangajaliwale Raghvendra shukla PGDM BATCH- III TERM- 4TH S.NO 1 2 3 4 5 CONTENTS PAGE NO INTRODUCTION OF COMPANY HISTORY OF COMPANY MISSION AND VISION PRODUCT LINE
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PGDM

Type

Public

Traded as

NASDAQ: AAPL NASDAQ-100 component S&P 500 component Computer hardware Computer software Consumer electronics Digital distribution April 1, 1976 (Incorporated January 3, 1977)

Industry

Founded

Founder(s)

Steve Jobs Steve Wozniak Ronald Wayne[1] Apple Campus, 1 Loop, Cupertino, California, U.S. 394 retail stores(as of November 2012) Worldwide Arthur D. Levinson (Chairman)[2] Tim Cook (CEO)

Headquarters Number of locations Area served Key people

Products Services Revenue Operating income Net income

Products list[show] Services list[show] US$ 156.508 billion (2012)[3] US$ 55.241 billion (2012)[3] US$ 41.733 billion (2012)[3]

Total assets Total equity Employees Subsidiaries

US$ 176.064 billion (2012)[3] US$ 118.210 billion (2012)[3] 72,800 (2012)[4] Braeburn Capital FileMaker Inc. Anobit

Website

Apple.com

INTRODUCTION
Apple Inc. (NASDAQ: AAPL), formerly Apple Computer, Inc., is an American multinational corporation headquartered in Cupertino, California that designs, develops, and sells consumer electronics, computer software, and personal computers. Its bestknown hardware products are the Machine of computers, the iPod, the iPhone, and the iPad. Its software includes the OS X and iOS operating systems, the iTunes media browser, the Safari web browser, and the iLife and iWork creativity and production suites. The company was founded on April 1, 1976, and incorporated on January 3, 1977. The word "Comm puter" was removed from its name on January 9, 2007, reflecting its shifted focus towards consumer electronics after the introduction of the iPhone. Apple has been one of the world's largest technology companies by revenue. It is the world's third-largest mobile phone maker after Samsung and Nokia. Fortune magazine named Apple the most admired company in the United States in 2008, and in the world from 2008 to 2012. However, the company has received criticism for its contractors' labor practices, and for Apple's own environmental and business practices.

As of November 2012, Apple has 394 retail stores in fourteen countries as well as the online Apple Store and iTunes Store. It is the largest publicly traded corporation in the world by market capitalization, with an estimated value of US$626 billion as of September 2012. The Apple market cap is larger than that of Google and Microsoft combined. As of September 29, 2012, the company had 72,800 permanent full-time employees and 3,300 temporary full-time employees worldwide. Its worldwide annual revenue in 2010 totaled $65 billion, growing to $156 billion in 2012.

HISTORY

STAPPLE: A TIMELINE
1976: The Apple I personal computing system is released with a market price of $666.66. The following year, Apple Inc. is incorporated by Steve Jobs, Steve Wozniak and Ronald Wayne. 1977: Michael M. Scott becomes Apple's first president. Mike Markkula joins the company. Ronald Wayne sells his shares to Jobs and Wozniak for $800. Apple II is released. 1978: Apple moves into its new headquarters in Cupertino, Calif. Apple releases Disc II, which incorporates floppy disks as storage devices rather than the cassette tapes used previously.

1979: Apple Inc. now employs 250 people. It introduces Silentype, the first printer, and also releases Apple II+. December 1979: Several Apple employees, including Jobs and Jef Raskin, were granted access to Xerox Parc facilities to see the Xerox Alto. Jobs was convinced that all future computers would use a graphical user interface (GUI), a belief that inspires his work in the development of the Apple Lisa. 1980: Apple goes public with 4.6 million shares. Apple III is released to disappointing sales in an attempt to compete with IBM and Microsoft in the corporate computing market. 1981: Steve Jobs becomes Apple's chairman, and Markkula becomes the company's president. The European headquarters open in Paris and Slough, England. 1982: The Company hits the $1 billion-mark in annual sales. Jef Raskin resigns, and Jobs takes over his lower-cost computer project, the Macintosh, after Jobs was squeezed out of the Lisa computer development team due to infighting over whether the LIsa or the Macintosh would be the first personal computer sold to the public with a GUI. 1983: The Lisa won out: it was marketed to the public and the Lisa and Macintosh divisions were combined. But its high prices and limited software capabilities made it a commercial failure. John Sculley is named president and CEO of Apple. January 22, 1984: The Macintosh is released, announced by the landmark $1.5 million Super bowl commercial, "1984," directed by Ridley Scott: The Macintosh sold well initially, but sales faltered for the same reasons as the Lisa. Later that year, the addition of the LaserWriter and PageMaker software helped reinvigorate sales. Andy Hertzfeld, one of the main authors of the Macintosh system software, leaves the company. 1985: The infighting between Jobs and Sculley escalates. The Board of Directors tells Sculley to limit Jobs' role; Jobs in turn attempts a coup, for which he's dismissed from his role at the company. After he leaves, Jobs founds NeXT Software. Wozniak resigns from Apple as well. The same year, President Reagan presents Jobs and Wozniak with the National Technology Medal.

1986: Jobs establishes Pixar, buying Lucas Films computer graphics group for $10 million. The Apple Programmers and Developers Association forms. The Macintosh Plus is released. 1987: Mac II and Mac SE are released. 1988: Jean-Louis Gassee is named president of Apple. The company sues Microsoft over its GUI. 1989: The Mac Portable is released. The company is sued by both the Beatles' Apple Corps and by Xerox. 1990: Jean-Louis Gassee resigns, and Mac LC is released. The company is listed on the Tokyo SE. 1991: Apple releases the PowerBook 100, which set the standard for the modern laptop. It weighed 17 pounds and had a 12-hour battery life. The company also introduced System 7, an upgraded operating system which added color to the interface and introduced new networking capabilities. System 7 would remain the architectural basis for Mac OS until 2001. The magazine MacAddict named the period between 1989 and 1991 the "first golden age" of the Macintosh. 1992: The Company reaches its first $2 billion-revenue quarter. 1993: The Newton Message pad, Apple's first handheld device, is released - and flops. Michael Spindler is named Apple's CEO, and Sculley is named chairman. He resigns later the same year. PowerBook sales top the 1-million mark. 1994: The PowerMac 6100/60 is launched. Mac celebrates its 10th birthday. 1995: DOS-compatible Quadra 610 is launched. The one millionth PowerMac is produced. 1996: Gil Amelio replaces Michael Spindler as CEO and implements massive layoffs. The company acquires Jobs' NeXT Software Company. Apple's fourth-quarter results in $25 million profit. 1997: Amelio is ousted by the Board of Directors from the CEO position after overseeing a three-year record-low stock price and major financial losses. Jobs is named the interim

replacement. At the 1997 MacWorld Expo, Jobs announces that Apple will join Microsoft to release new versions of Microsoft Office for the Macintosh, and that Microsoft would make a $150 million investment in non-voting Apple stock. 1998: The iMac/233 is released. The iMac design team was led by Jonathan Ive, who would later be the designer of the iPod and the iPhone. The iMac sold nearly 800,000 units in its first five months. The Newton Operating System is scrapped. 1999: The Company invests $100 million in Samsung and sues eMachines over an iMac lookalike. 2000: PowerMac Cube launches. Jobs becomes Apple's permanent CEO, and chief sales exec Mitch Mandich steps down. 2001: The iPod launches, as well as OS X. The company opens its first retail store in MacLean, Virginia. 2002: iMac G4 launches. Retail stores go overseas. 2003: Jobs is diagnosed with cancer in his pancreas and tries to treat the illness by switching to a special diet, according to a 2008 Fortune magazine article. Apple does not tell investors. ITunes music store opens and hits 25 million downloads. 2004: iMac G5 launches. Jobs, now 49, discloses his cancer to the public when he announces that he had successful surgery to extract a tumor. The ad campaign featuring U2 kicks off. 2005: The Video iPod and iPod Nano launch. Jef Raskin dies at 61. ITunes downloads top 500 million. Jobs talks about his fight with cancer during a commencement speech at Stanford, saying that his surgery had been a success "and I'm fine now." 2006: The iMac Core Duo launches. Disney buys Pixar, putting Jobs on the board at Disney. Software development leader Avie Tevanian leaves Apple. The PowerMac, iBook and PowerBook brands are retired, replaced by the Mac Pro, MacBook and MacBook Pro. Between early 2003 and 2006, the price of Apple's stock increased more than tenfold, from around $6 per share to over $80.

2007: Apple Computer, Inc., becomes Apple Inc., because computers are no longer the company's singular focus. The iPhone and Apple TV are announced. The following day, Apple shares hit an all-time high (at that point) at $97.80. 2008: Apple launches the App store to sell third-party applications for the iPhone and iPod Touch. Within a month, the store sold 60 million apps and brought in $1 million daily on average. Apple becomes the third largest mobile handset supplier in the world due to the iPhone's popularity. Apple also releases MacBook Air, a slimmed-down portable computer. December 16, 2008: After 20 years of attending MacWorld, the company announces that 2009 will be its final year of doing so. And, instead of the expected Jobs, Phil Schiller would deliver the final keynote. January 14, 2009: Jobs announces in an internal memo that he would be taking a sixmonth leave to focus on his health. June 29, 2009: Apple announces Jobs' return to work. At the time, Apple shares have risen 70 percent since January 15. 2009: Apple releases the iPhone 3GS. January 27, 2010: Apple announces the impending launch of the iPad. April 3, 2010: The iPad launches in the U.S., and more than 300,000 units are sold on that day, reaching 500,000 by the end of the first week. May 2010: Apple's market cap exceeds that of competitor Microsoft for the first time since 1989. June 2010: Apple releases the fourth generation iPhone, with video calling, multitasking and a new uninsulated stainless steel design which acts as the phone's antenna. Some users report a reduction in signal strength due to the new antenna. October 2010: Apple shares hit an all-time high, surpassing $300. November 2010: For the first time, The Beatles' 13 albums are up for sale on iTunes, ending years of talks among Jobs, The Beatles' management company Apple Corps and The

Beatles' label EMI Group. The group sells more than 2 million songs and more than 450,000 albums in its first week on iTunes. January 17, 2011: An internal memo from Jobs, now 55, announces he will once again take a medical leave for an indeterminate time period. COO Tim Cook will take up Jobs' day-to-day operations at the company. January 18, 2011: Apple's stock opens for trading at $327.05 per share, down more than five percent from its close on the previous trading day. August 24, 2011: Steve Jobs announces his resignation as chief executive officer at Apple. Cook takes over, while Jobs takes on role as company chairman.

VISION STATEMENT
"Man is the creator of change in this world. As such he should be above systems and structures, and not subordinate to them."

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Explanation of vision
Apple lives this vision through the technologies it develops for consumers and corporations. It strives to make its customers masters of the products they have bought. Apple doesnt simply make a statement. It lives it by ensuring that its employees understand the vision and strive to reach it. It has put systems in place to enable smooth customer interaction. It has puto b j e c t i v e s i n p l a c e t o c o n t i n u o u s l y m o v e f o r w a r d ; i m p l e m e n t e d s t r a t e g i e s t o f u l f i l t h e s e objectives; and ensured that the right marketing, financial and operational structures are in place to apply the strategies.

MIISSIONSTATEMENT
"Apple is committed to bringing the best personal computing experience to students, educators, creative professionals and consumers around the world through its innovative hardware, software and internet offerings."

The Mission Statement, Global Vision, and Values of Apple, Inc.

it was widely reported that a famous quote from Steve Jobs in the 1980's was the Apple company mission statement: "Man is the creator of change in this world. As such he should be above systems and structures, and not subordinate to them."

The "official" mission statement on the Apple corporation website, however, is not really a mission statement at all, but rather a list of products and past accomplishments. As stated, Apple's "mission" is "Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone with its revolutionary iPhone and App Store, and has recently introduced iPad 2 which is defining the future of mobile media and computing devices." Apple ends its press releases with a statement that resembles what a traditional mission statement is expected to be "Apple is committed to bringing the best personal computing experience to students, educators, creative professionals and consumers around the world through its innovative hardware, software and Internet offerings."

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PRODUCT LINE

Apples competitors and comparison of performance-:

Direct Competitors Apple Google Hewlett-Packard RIM

Market Cap: $US 371.10B 175.39B 51.50B 12.71B

Employees 46,600 28,768 324,600 17,500

Revenue 100.32B 33.33B 128.40B 20.13B

Rank 1 2 3 4 5 6 7 8

Computer Hardware (US) by Sales IBM Corp. Hewlett-Packard Company Dell Inc. Cisco Systems, Inc. Xerox Corp. Seagate Technology PLC Apple Inc. NCR Corp.
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However, as previously mentioned, none of those competitors manage both hardware and software at the same time. So I finally summarized Apples competitors according to hardware and software products:

Apples Software competitors

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Apples Hardware competitors

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PRODUCT LINE

The Mission Statement, Global Vision, and Values of Apple, Inc. it was widely reported that a famous quote from Steve Jobs in the 1980's was the Apple company mission statement: "Man is the creator of change in this world. As such he should be above systems and structures, and not subordinate to them." The "official" mission statement on the Apple corporation website, however, is not really a mission statement at all, but rather a list of products and past accomplishments. As stated, Apple's "mission" is "Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone with its revolutionary iPhone and App Store, and has recently introduced iPad 2 which is defining the future of mobile media and computing devices." Apple ends its press releases with a statement that resembles what a traditional mission statement is expected to be "Apple is committed to bringing the best personal computing experience to students, educators, creative professionals and consumers around the world through its innovative hardware, software and Internet offerings."

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Strategic Management Apple

Apple Computer, Inc., is an American multinational corporation headquartered in Cupertino, California that designs, develops, and sells consumer electronics, computer software, and personal computers. Its best-known hardware products are the Mac line of computers, the iPod, the iPhone, and the iPad. Its software includes the OS X and iOS operating systems, the iTunes media browser, the Safari web browser, and the iLife and iWork creativity and production suites. The company was founded on April 1, 1976, and incorporated on January 3, 1977.The word "Computer" was removed from its name on January 9, 2007, reflecting its shifted focus towards consumer electronics after the introduction of the iPhone. Apple has been one of the world's largest technology companies by revenue. It is the world's third-largest mobile phone maker after Samsung and Nokia. Fortune magazine named Apple the most admired company in the United States in 2008, and in the world from 2008 to 2012. However, the company has received criticism for its contractors' labor practices, and for Apple's own environmental and business.

Strategic intent
Apple's strategic intent in releasing its product has hurt competitors in ways not have expected. Apple benefited by forcing consumers to wait for their new product release instead of buying a Kindle or Sony E-Reader. Customers are smart. They weigh the benefits and costs and make well-informed decisions. For many, it is worth the wait to see what the innovative engineers at Apple have cooked up in the labs. Thus, even though the product is not yet available for purchase, Apple has potentially stolen market share and at the very least delayed a customer's purchase of a competitor's product.

The power of Apple is in its perception as an innovative company whose products and services transform the marketplace. Customers know a new product announcement means something that's potentially revolutionary - and that's power that competitors cannot control and power that demands a premium in product price and stock price.

Strategy Corporate level strategy

Apples uses a corporate-level strategy competing on many different levels. Apple has a moderate to high level of diversification with related constrains. Apple offers home computers, personal computers, phones, music devices, software, and applications. All of their products use very similar design techniques and the majority of the applications can be used on multiple devices without changing the format. They are also one of the few computer base companies that also own retail stores. They customers can either order online through Apple.com or go to a Apple retail store and buy the same products. All of their businesses are linked and continue to move forward at the same time.

Business level strategy

Apple focus on making the best products. They are a company that focuses on innovation, and by that mean with new products, but also improvements on their existing products. They use the focused differentiation strategy, by making products that are exclusive, and pretty expensive. Not everyone can afford an Apple product. The focus on aligning their business strategy and their marketing strategy with product development. This is something that they do much better than their competitors, and this is a huge advantage for them. Apple's target market is people who are willing to pay more for products with better user experience, people who likes to have fun with technology, music enthusiasts and people who work with media and design professional. They have done a good job by finding out which customer needs to satisfy. They have found out that these customers wants a nice, beautiful and simple design and user input, and they have focused on programs that help to take pictures, programs that edit both pictures and videos, and good music programs, both to listen, and to make music. To make these programs, they have to have to focus on innovation, and have programmers and designers that can make

program like this, that are both easy to use.

Competitive advantage
Apple has several things which consider to be keys to their competitive advantage. Fundamental advantages that when become clear differentiators as well as roadblocks for Apple competitors. However if have to prioritize, their retail strategy would be near the top as a key to their competitive advantage. In traditional retail outlets like Best Buy, Apple gets their own section. Part of this is Apples doing but its also because Best Buy knows how high in demand Apple products are and they want to move boxes. Apple recently reached third place in personal computer sales in the U.S., selling more Macs the past few quarters than analysts expected. Also, Apple is the leader in the tablet space with its popular iPad. In its most recent quarter, for example, Apple sold 9.52 million iPads, and the product has only been available for roughly a year. Apple had Mac customers. Apple had iPod customers. Apple had iPhone customers. But now, with each advance, particularly in regard to the iPhone's evolution and the iPad's launch, Apple moves closer to market domination across all three spaces like we've never seen from one company before. Apple has an approach to product launches that is more similar to Fast Moving Consumer Goods companies than to the world of Consumer Electronics. Most Consumer Electronics companies have separate P&Ls for different categories, so each product's advertising is a percentage of its sales, generally rather low since CE is a low margin industry. A product is launched, and only if it quickly generates a large amount of sales, is it going to have a continued and substantial advertising support. Apple launch product families that stay for a long period of time (iPhone, iPod, iPad, etc). They price them at the right price to generate competitive advertising support and solid profitability, and they build long-term launch plans.

Strategic analysis
For the purpose of illustration, the industry analysis of Apple Inc. will focus specifically

on the portable personal computer manufacturing and sales and on the United States market, although many of the firms involved in the industry produce, market and sell internationally. Considering the threats faced by firms operating in this industry the industry is moderately attractive overall. Many firms within the industry have thrived, but competition is very high, while suppliers and buyers have moderate influence over the Competitors. There are several avenues by which new competitors may enter the market, but they face substantial hurdles in successfully establishing a viable brand.

Company financials

Year-on-year growth rate

S.NO 1 2 3 4 5 6 7

YEAR 2003 2004 2005 2006 2007 2008 2009

ROA 1 3.4 11.6 11.6 13.8 12.2 17.3

= = = = = = =

YOY 2.4 8.2 0 2.2 1.6 5.1 1.3

2.4*100/1= 8.2*100/3.4= 0*100/11.6= 2.2*100/11.6= 1.6*100/13.8= 5.1*100/12.2= 1.3*100/17.3=

% 240% 241% 0% 19% 12% 42% 7.51%

8 9 10

2010 2011 2012

18.6 = 22.3 = 23.7 =

3.7 1.4

3.7*100/18.6= 1.4*100/22.3=

20% 6.27%

Rivalry between Competitors

While once an industry defined by few large companies and extremely expensive products, pursuing a niche audience, the advent of the personal computer (PC) has caused an industry explosion which now includes dozens of manufacturers pursuing many millions of customers in the United States. As a result of the penetration of computers into everyday life and business the PC is becoming more and more a commodity product. For most users, and business economy is more Important that performance specification and other bells and whistles. The result has led Many manufacturers to pursue low-cost and best-cost provider strategies. Those at the lowest end compete on rock-bottom prices foregoing all but the most basic features. Those in the middle range including Dell, HP, and Lenovo compete for customers offering a range of options for varying prices. The similarity of their products due to industry standard setting also leads to price competition that drives down prices and squeeze margins. The desire of companies to buy large numbers of PCs for the lowest bid available also exercises considerable downward pressure on prices offered by these firms

Apples competitors and comparison of performance-:

Direct Competitors Apple Google Hewlett-Packard RIM

Market Cap: $US 371.10B 175.39B 51.50B 12.71B

Employees 46,600 28,768 324,600 17,500

Revenue 100.32B 33.33B 128.40B 20.13B

Rank 1

Computer Hardware (US) by Sales IBM Corp.

2 3 4 5 6 7 8

Hewlett-Packard Company Dell Inc. Cisco Systems, Inc. Xerox Corp. Seagate Technology PLC Apple Inc. NCR Corp.

However, as previously mentioned, none of those competitors manage both hardware and software at the same time. So I finally summarized Apples competitors according to hardware and software products:

Apples Software competitors

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Apples Hardware competitors

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Market environment strategy analysis

Economic environment: The U.S. economy has shown some improvement and there are signs of full recovery looming the outlook is not certain currently. The uncertainty leaves consumers weary of big-ticket purchases like computers. The premium pricing of Apple leaves the firm at a disadvantage to less expensive competing products. However, when consumers directly feel the improving economy and spending increases Apple will be well positioned to

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better its performance. Consumers seeking to treat themselves following the economic upturn may be attracted to Apples premium portables, viewing them as luxury goods. Apple, known for its quality, dependable machines, and excellent customer service may also be seen as presenting a better value than the competitors with fewer frills present at lesser prices. Demographic Environment: the American middle class has experienced increasing costs across many indicators including, healthcare costs and the CPI Over the past several years with wages remaining relatively constant. Apples high prices may send potential customers into the hands of competitors when they are unable to justify Apples high price tags. Counter-intuitively Apples perceived value has directly benefited them during the economic downturn since they continued to experience growth while other competitors suffered (Farrell, 2009). In the technological Environment, there is a possibility that ordinary personal computers will become less relevant through increased device convergence. The laptops of Apples will be less important in daily use of its customers as their multi-function devices meet most of their needs. The corporation currently stands out as a leader in innovation and portable technology. They are conveniently positioned to become a market leader in convergence devices by iterating on their current portable devices and mobile devices like the iPod Touch and iPhone and the ipad. Additionally, there is an increasing concern to innovate due to reduced life cycles of products that could result in missed opportunities due to market entry times and losses on obsolete inventory. Apple uses lean manufacturing to combat the threat of inventory obsolescence (Apple Inc. 2009a). The Chinese economy is growing. This creates another important opportunity for apple to market its products. As the economy becomes more developed, increased wages nationwide will increase the costs of production for Apple and its OEM partners. The increase in quality of life and disposable income to Chinese citizens will provide a larger customer base for Apple to tap

into (Huzefa, Deepti, & Harmanjeet, 2009).

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Strategic Implementation
Based on analysis of Apples practices, policies, and procedures the firms strategy for its portable personal computer business is one of broad differentiation targeting a range of customers from sophisticated power users to inexperienced new users and from individual buyers to bulk purchasers like schools and businesses. The firm differentiates on exceptional design, consistent quality, and outstanding customer service. The real evidence of Apples strategy reveals that their commitments are directly in line with their stated goals and strategy. Apples goal is to provide customers with the best personal computing experience by offering products with superior easeof-use, seamless integration, and innovative industrial design and a high-quality sales and post-sales support experience.

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Recommendations and conclusion

Given the external environment and socio-cultural and technological trends and Apples unique strengths including the firms resources and capabilities, including unmatched industrial design teams, talented device engineers, patents and innovation dealing with user interface and usability a logical next step for Apple is to develop a market defining convergence device, likely a tablet. The firm should leverage its close OEM partnerships and internal knack for design and usability to develop an innovative device that fits into Apples unique system of seamlessly integrated devices and

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applications to bridge the gap between consumers personal computers and their mobile phones. Apples internal engineers use what the firm has learned from its iPhone, iPod, and Mac lines to develop an intuitively usable device packed with useful functions leveraging Apples iTunes Store content including the ecosystem of third-party applications developers to unleash the full potential of the platform. The award winning design team can leverage its talent to create the next must-have product regarded for its design simplicity and elegance making it not only a functional device, but also a fashion statement. Finally, Apples close work with its preferred OEM partners makes the company focus on building quality products that are dependable.