COMPETITIVE ADVANTAGE Apple Inc.

A Greener Apple
(In fact, Apple is the most cash held by any technological company. It has 97.6 billion US dollar in cash and this allows the company to internally finance any development and expansion without cost of capital.)

Apple has an unprecedented cash position Reducing greenhouse gas emissions

Infrastructure

(Greenhouse gas emissions are used in production and transportation by redesigning its packaging relying on renewable energy)

SUPPORT ACTIVITIES

Quality Control Proprietary technologies Consistency, innovation, and overall product attractiveness

Human Resource Management

Apple employs approximately 20, 000 employees around the world. Apple is following a lean management style and the philosophy of having less is more Apple has a selective hiring process to attract talented employees Apple offer a generous employee benefit program

Technology Development

Apple spend enormous amount of money on its Research & Development in order to push innovation further; thus stay ahead of competition.
(Apple spent 712 million in research and development in 2006)

Procurement

Apple has one of the most admired design and engineering in the world.

Apple chooses its suppliers based on its stringent standards of technology and quality.

Procurement of raw materials is supervised by Apple but carried out by Chinese manufacturers.

Production is Completely outsourced to various Chinese manufacturers. Apple supervises production to ensure it adheres to their strict quality control policy.

Finished goods are delivered directly to apple retail stores around the world

Apple advertises online, on TV and through print ads. Apple stores have various programmes to promote their products. Apple is also endorsed by their fiercely loyal customers. Products are sold by Apple resellers, through the Apple website and at 194 retail stores around the world.

PRIMARY ACTIVTIES

Applecare provides extensive customer support around the world. Updates of software are regularly released. Apples Genius Bar. Free Consultation

Inbound logistics

Operations

Outbound Logistics

Marketing/ Sales

Service

(Source: http://www.slideshare.net/thats4u83/apple-315791 )

APPLE Inc. Apple Inc. is a technology company which designs, produces and sells goods of the Computer, Music and Mobile-phone Industries. It is differentiated by its brandperception and identification. Over the last couple of years, Apple has become a cultbrand, thanking its iLife, iTunes, QuickTime and iMac line. In the long run, Apple aims for the top of the market, becoming the number one leader. Apple is also recognized as innovator in the areas of personal computers, software applications, computer operating systems, personal music devices, cell phones, and even marketing and retail. The company is organized to focus its core strengths with senior vice presidents overseeing Macs (PC computer), iPods, software engineering, computer applications, and worldwide marketing. Apple Inc. has incorporated numerous features that are unique and well known in the market today. We consider that there are several Apple products as with several appealing features such as: iMax, iPod, iPhone and iPad. These products represent a revolutionary era for the development of Apple. By placing such products in the market, Apple Inc. has attracted a lot of customers in one way or another. Highly advanced technology, simplicity and design, and the sense of luxury are the main features integrated in these products. Moreover the comfort and convenience that these products provide are very crucial. Think Different. Apple Inc has simple and luxurious image that Apple has created in the market over the years. Think differently which is an inspiring motto, made us believe that simplicity and creativity combined with luxury can lead to a successful and profitable company, such as Apple. Another component that we found to be challenging for was to understand Apples goals, objectives and their secret of being successful. A very important fact about Apple products today is that these products are globally spread. This has created among us the idea that Apple products are no longer luxuries but real necessities due to the technological developments. Moreover, what has motivated us most to select Apple Inc is the way we relate ourselves with its products. Each of us being an Apple consumer has build trustworthiness relationship with the products that this company offers. Owning an iPod or iPhone today definitely will make our life easy and simple.
A.

History

Apple Computers originated in Cupertino, California by three friends, Steve Wozniak, Steve Jobs, and Ronald Wayne. Wozniak was the computer nerd of the three and had been working on a computer design and once Jobs convinced him of finishing his model and selling it to the public the beginning of Apple computers was underway. On January 3, 1977 the hard work of the three friends became Apple Computer, Inc. Soon after Wayne sold his share back to Jobs and Wozniak, the two college drop-out Steves continued on creating one of the most successful companies that would in future years be known for their computers, music devices, cell phones, and software worldwide; with the motto of Think Differently. In the early 1980s, Steve Wozniak left the company and Steve Jobs hired John Sculley as the President of the company. After facing many failures, Apple launched its Macintosh computers for house hold users. In mid 1980s, Steve Jobs had to leave the company because of his controversial relations with the president. At that time John Sculley rejected the offer of Microsofts CEO, Bill Gates to license the Macintosh operating system to Microsoft. After this refusal, Gates developed DOS operating system and in late 1980s, the competition between DOS and Macintosh

decreased Apples sale, workforce and resignation of John Sculley. So, Apples CEO planned to purchase Next Step operating tem of Jobs in order to improve the Macintosh operating system. In late 90s Jobs again became the CEO of the company and he started surprising relations with Microsoft by developing a Macintosh version of office software. Apple also took cost saving measures like streamlining the product line, production of printers. Steve Jobs brought Apples focus on two concepts of consumer series with the prefix I for internet like iMac, iBook laptop and professional with prefix power such as PowerMac desktop and PowerBook laptop series. Under Jobs, Apple again becomes the innovator of market. His leadership leads the company to USB and Fire-wire ports, introduction of iPod and iTunes website put Apple in digital computing age. Apple manages its business on geographic locations having offices in Americas, Europe, Japan and Asia Pacific. Apples sale is continuously growing. In the era of 2000, Apple opens 86 retail stores in USA and two international stores in Tokyo and Osaka which increases its sales. It introduces eMac line of cathode ray screen, but its most impressive and fastest growing market is of iPod line of digital music players and iTunes music store website. The three major competitors of Apple are Dell, Hewlett-Packard and IBM; however Apple also competes with Microsoft in software industry. Dell is the largest computer manufacturer with extremely low cost production strategy. Dell has entered the in the line of music against Apple by its Jukebox. Hewlett Packard is a big brand name and leading provider of technology. Apple combined with IBM enjoyed profit jointly but now Lenovo took over IBM and become a competitor of Apple. .Apples new products like speech recognition program will help take industry into a new age of computers and is according to the companys motto and it is hoped that it will double the profit margin in the near future. Overall, Apple is continuously growing and its future seems bright. With the slight change in their strategies, they can become giants in technology industry. A. SWOT An alysis

a)

Strengths:
Produce innovative products using innovative technology Produce aesthetic/stylish products They make diversified products Customers of Apple computers are brand loyal Have technology of interacting with computer using human senses They have virus free systems First company which adapt calligraphic font style Introduce USB and fire wire ports for digital connection Make music website.

b)

Weaknesses

Apple has high manufacturing and inventory cost Management is not stable Has low market share in software industry Majority of retail stores located in U.S.A. No compatibility options in their soft wares Decline in sales of iMac Less emphasis on marketing issues to create awareness for their innovative products. c) Opportunities

Should expand on the basis of sales Should open retail stores in different countries Should target government and educational institutions Should make compatible soft wares Should capitalize on the basis of virus free systems Should introduce the speech recognition program They should focus on customized products for customers Should start making their own microprocessor chips

c)
B.

Threats
Merger & acquisitions of competitors High cost can be a limitation in future High market share of Microsoft Windows Competition increases in music downloading sites Strategies and Tactics Corporate Level Long-Term Strategies and Tactics Apple has two major long-term strategies and tactics that they focus on. The first being strategic alliances that they have with IBM, Microsoft, and AT&T. The alliances they formed with IBM and Microsoft have enabled Apple to further their computer growth and guarantee software that is available and familiar to consumers all over the world. The alliance with AT&T was a recent alliance that was formed when Apple came out with their iPhone. Their contract with AT&T ends in 2010, and the phone world is anxiously waiting to see if they will continue this alliance or create a new one. The second strategy is concentration on internal growth which they are implementing by developing new products for the markets they have already established and by finding new markets for their current products. For example Apple created a new market for their Macintosh computers by pushing them into the education market and creating their mark among students and teachers. Corporate Level Short-Term Strategies and Tactics Currently Apple does not seem to have any short-term strategies and tactics. This could be very risky for Apple, but at the time being they seem to be successful without it. SBU Level and Tactics Apples current strategies defined by Porter are product differentiation with a focus on a broad market. This can be seen by Apples many products including the iPod, the iPhone, and all their Mac books that are priced and designed to fit every persons needs and wants. Apples current strategy defined by Miles & Snow is being a prospector. Apple creates new products and services, such as their iTunes when legally downloading music was needed, to changing market conditions. They also respond rapidly and try to be the first mover. By doing this they set a benchmark for their competitors and place their products in consumers mindset first.

Apples Green Efforts Apple has been making large strides in order to make their company a green company. Looking at the transformation of their MacBook Pro from 2006 to 2008 you will see that they have gone from having BFR, PVC, mercury, and arsenic in their 2006 version to having none of them in their 2008 version. They have also been reducing their packaging to both save materials and to make it possible to store more packages on one mode of distribution, thus reducing the amounts of trips it would have had to make. Last but not least, Apple has also been putting more of their attention on getting more recycling centers set up for their products. One of their ways of doing this is having a program within their stores that allows a customer to bring in their old Apple product they dont want anymore, and the store will take care of the recycling process. Apples efforts are a great way to start their journey to being a completely green company (Apple.com).

C. EFAS
External Factors Weight Rating (1-5) 2 Weighted Score 0.20 Comments

0.10 S hou l d ex pan d on t h e bas i s o f sa l e s Should target government and educational institutions Should capitalize on the basis of virus free systems Should introduce the speech recognition program They should focus on customized products for customers T hrea ts M e r ger & ac qu i s it ion s o f com pe t ito r s High cost can be a limitation in future High market share of Microsoft Windows Competition increases in music downloading sites TOTAL 0.15 0.15 0.10 0.05 1.00

Emphasize on the sales of innovative products

0.15 0.15 0.10 0.05

3 4 3 3

0.45 0.60 0.30 0.15

Find a propitious niche Give advanced security Give new meaning to technology Cater the segment in a better way

3.5 4.5 3.0 2 3.47

0.7 0.67 0.30 0.10

Rival companies become giants and good name It is a question for Apple Well positioned rival