Research Report Apple Inc.

– Principles of Management (MGT 1120)

Name:
Date:
Company Background

1. Apple Inc., which was previously conducting its business as named Apple Computer, Inc.

is one of the top American MNCs (using ticker id AAPL) and mainly headquartered at

California. Its operations are conducted internationally across 24 countries that comprises

major global markets such as San Francisco, Hong Kong, New York City, London, Paris

Sydney, and many more.

2. Apple Inc. has a diversified portfolio of its products and services because it not only designs

but manufacture and sell mobile and media devices, software, computer accessories. Not

only this but it also includes iPhone, iPad, Mac, Apple watch and Apple TV. Its services

varied from iOS, iCloud, Apple Pay and many other software (Vogel, 2007). iPhone comes

under the category of Smartphones consisting on the operating system that gave 62%

revenue to Apple in 2017. Introduced in 2007, Apple face many improvements and

successes after iPhone was made available for its customers due to its unique shape, style,

features, and innovative options. iPad comes in the tablet devices introduced by Apple also
 operates through operating system. Until 2013 after reaching to its peak it started to decline

in the market share that had given 18% revenue to Apple. However, it faced increase I n

the countries such as China and India. Mac is in the division of personal computers. It gave

quite a huge amount of revenue to Apple which is regarded as its best: $25.8 billion.

Services comprises of iCloud, AppleCare, Apple Pay reaching all time highest revenue

scale to almost $30 billion in 2017. iPhone X has been the most expected iPhone over the

past years for Apple Inc. introduced on the November 3rd. it is considered as the most

innovative phone introduced 10 years back that will design future paths for iPhones. It has

many innovative features namely face recognition which made it more popular among its

customers around the globe.

3. Apple Inc. was established by Steve Jobs, Steve Wozniak and Ronald Wayne in 1976

which was just a garage in California. It was founded with the purpose of selling the

Apple 1 Personal Computer that couldn’t meet much success. Later on after 5 years,

created the first Macintosh which proved to be a revolution in the design of personal

computers. Till this time, one partner, Ronald Wayne had decided to stand apart with the

newly born organization, and soon afterwards, Apple Inc. remained with only one

founder, Steve Jobs. After facing a huge deal of troubles and criticism, Apple has been

ruling the electronics market for last 20 years being one of the top brands in the world.

Apple has employed approximately 123,000 employees maintaining 504 retail stores in

more then 24 countries in the world with more than 1.3 billion products available world

wide in the global market.

4. Apple Inc. clearly indicates on its website stating their social responsibility that: “Apple’s

commitment is to ensure social responsibility and its standards such as safety in working
 conditions, workers’ respect is assured, and to use such a procedure which remains

environmentally protective during the entire manufacturing processes” Not only this but

Apple also makes sure to maintain healthy relationships with its stakeholders, employees,

host countries, and clients.

5. Apple Inc. – Financial Health:

In the technology field, Apple Inc. proves to be the top leader with a handful variety of

gadgets, software and accessories be it a cell phone or a computer. These contribute highly in

generating revenues for Apple. Not only this but Apple uses its innovation, creativity and

opportunities to retain its leading position in the global market so can retain its premium value.

In 2017, a study finds that Apple has reached all-time high revenue in all its segments except

leaving behind the iPad. The revenue of its services sector reached to the quarterly high of $8.5B

and Apple Watch had been facing the growth in its own unit of more than 50% for the

consecutive three quarters.

a. Company Financial Data: Current Market Value (Capitalization): The Market Cap of

Apple Inc. has increased to more than $900 billion in 2018.

b. Liquidity Ratios:

Current ratio = Current Assets

Current Liabilities

Current ratio = 131,339,000

116,866,000

Current ratio = 1.12

 Analysis: Apple Inc. shows a current ratio of 1.12 which means that no critical problem

would be faced in terms of its liquid assets. It can retain its position in the global market and may

need to foresee the contingencies that may arise in uncertain future.

1. Debt Management Ratio:

Debt-to-Equity Ratio = Total Liabilities

Shareholders’ Equity

Debt-to-Equity Ratio = 258,578,000

107,147,000

Debt-to-Equity Ratio = 2.41

Analysis: Since its better to have low debt ratios because they indicate less risks to the

organization; whereas, higher ratios should be taken into consideration on immediate

basis. Here, it can be observed that Apple need to keep an eye on its debts and assets

ratios for future references.

Analysis of Company: The analysis of the above-mentioned information clearly indicates the

sound financial health of Apple Inc. The operating percentage is above 30 showing the growth in

its revenue in double figures. Apple shows positive results in its quarterly earnings which

according to one estimation in a research is EPS $ 1.96 versus $1.88 estimated. However, it can

also not be denied that changes in the macroeconomic conditions around the globe may affect

Apple’s stability which must be considered as a high concern.

Mission/Strategy/Goals/Stakeholders

1. Mission Statement

Apple Inc. mission statement has been through many changes over a period of time because

of the changing requirement of the market and industry and their prevailing environment.
 Apple’s mission statement shows commitment to providing best experience in the

computing field using its innovative and creative designs to the individuals around the

globe. This can be taken as a corporate mission statement which states specific

organizational outcomes such as iPad, iPods, iPhones and Mac.

 Goals and Objectives

o To provide quality services to customers by employing staff who keep

knowledge of all its products and services.

o Through its innovative designs, giving the user-friendly experience to its

customers.

o To have its own designed systems in terms of operating systems, hardware,

software, and different application services.

o To open more stores around the globe, introduce more products.

o To use more smart marketing strategies.

2. Apple implements differentiation strategy at its business level because of its concerns for

high quality products and services and innovation and creativity. It enables Apple Inc. to

establish brand loyalty offering great design and high quality performance. Not only this,

from a different perspective, it can also be well-observed that Apple follows growth

strategy since its focus is on designing and providing highly innovative products to the

individuals around the glob.

3. Apple is focusing on creating more creative product designs, focusing on building strong

customer relationships by opening more retail stores in the world. These goals are specific,

they can be measured in terms of how many products to what extent should be created or

designed, attainable because these can be easily kept by individuals; result-oriented

 because Apple has to decide what result they want from that particular product design,

what would be the customers’ thoughts and desires, and targeted as Apple Inc. has been

focusing on targeted market and has set targets of to which market what design has to be

delivered and in what shape.

4. Apple Inc. has several stakeholders in which first are the Customers who are Apple’s top

priority because these are the individual or organizational buyers of its products. Customers

require best product at affordable price option; however, Apple’s price is bit higher than

others, still it is in demand and purchased because of its high quality performance and

innovative designs. Therefore, Apple remains its customers satisfied considering them as

the most important asset in terms of the stakeholders of the business. Second, its

Employees are the important part of Apple Inc. Looking forward towards better

compensation strategies and career growth, thee are the backbone of the organization

because if Apple fulfills its social responsibility in proper and effective manner only then

these will be able to deliver what Apples’ customers need are. Third important one is the

Supplier that are also in significant importance to the organization because without them

Apple would not be apple o deliver its high quality to the customers. Analog Devices, Inc.

(ADI) established in Norwood is the main supplier of the touchscreen controllers for the

iPhones designed by Apple Inc.

5. In general environment, global factor is the most important one to be taken care of because

as the changes occur in demographic Apple would find less number of young consumers

since Ageing issue has been a key concern globally.

Organizational Structure – Apple Inc.

1. The chart of the organizational structure (see attachment A) indicates that it is hierarchical

in its form.

2. The hierarchy of Apple Inc. highlights strong control by the senior management. However,

communication may not be much effective here since the structure doesn’t allow its

members to pass the flow of information easily. It means they have to follow a certain

chain of command in order to report or either provide valuable suggestions. Here at Apple,

the organizational structure positively bring together effectiveness and rapid success which

is the most important factor in the growth of any business.

Management Analysis

1. Key leaders and managers of the company

A. Chief Executive Officer

 Tim Cook

 Since 2011, he has been on the leading position and responsible for all over

company’s operations and guides employees, orders them. He also was the head

of the Mac Division in Apple while making it sure to establish healthy relationships

between the company and the customers. Before being part of Apple, he was

serving as Vice President at Compaq for Corporate Materials. And was responsible

for procurement and management.

 Tim did his MBA from Duke University and did a Bachelor of Science degree in

the field of Industrial Engineering from Auburn University.

 B. Senior Vice President and General Counsel

 Katherine Adams

 Formerly she was a partner at Sidley Austin LLP in New York. She served Law

career for Supreme Court Justice Sandra Day O’Connor and others.

 Comparative Literature was her choice in her Bachelors from Brown University

and did Law from the University of Chicago Law School.

C. Senior Vice President, Retail

 Angela Ahrendts

 Joined Apple in 2014, she has developed Apple’s business in terms of physical and

digital retail to create a high quality customer experience for more than a billion

visitors with her aim to educate, motivate, entertain communities.

 Angela has Marketing and Merchandising degree which she did from Ball State

University, Indiana and awarded an honorary doctorate of humane Letters in 2010

 Angela was an honorary dame commander of the British Empire where an award

of coat of arms was given to her in 2014.

2. Board of Directors – Apple Inc.

 Attachment B indicates the chart of board of directors.

 Arthur D. Levinson

o Chairman of the Board at Apple Inc.

o He was a Former Chairman and CEO at Genentech

 James A. Bell

o Former Corporate President and Former CFO – The Boeing Company

 o He excels in finance, strategy and leadership in complex structure of

organizations. His career spreads on 38 long years of expertise.

 Albert Gore Jr.

o Former Vice President of USA

o His devotion is to resolve climate crisis. He had been a part of Kleiner

Perkins Caufield & buyers. His documentary movie, “An Inconvenient

Truth” has won two Oscars in the year 2006.

3. Tim Cook as a CEO at Apple Inc.

Tim Cook proves to be a Democratic leader who uses democratic style of leadership. He was

formerly misunderstood as he was replacing Steve Jobs, yet came out to be more charismatic and

thoughtful CEO focusing greatly on existing products thinking how to make them better providing

excellent quality and high performance to its existing customers as well as to its potential

customers. Cook has well cooperative style when it comes to communicating with his employees

so that proper and effective delivery of messages can be made possible. His democratic style

clearly indicates that he allows his subordinates to come up with innovative ideas, focusing on the

mutual consensus.

4. How is the Corporate Culture Transmitted?

Apple Inc. is the place where innovation and creative ideas are always welcomed warmly by the

top management to ensure the exact picture be delivered to its customers, where employees get

good compensation benefits, external factor in general environment is also taken into account and

most importantly employees are provided with ample space for career growth and development.
Corporate Culture

Apple Inc. stands for having such corporate culture which focuses on creative innovation.

Its culture highlights the factors to maintain high level creativity to challenge the conventional

methods od developing products and services for its valued customers. Apple has the policy of

hiring the top class employees. Although, Steve Jobs was very keen to shunt out the employees

who were not capable to meet the required criteria however the organization also give much

opportunity for employees’ career development. Not only this but maintaining secrecy is also one

of the important factors at the Apple Inc. because it is generally believed that keeping an eye on

the competitors and their movements is better but it is best to maintain own pace in providing best

and high quality performance in the form of innovative products and services. Therefore, Apple

doesn’t take any risk in the form of its secrecy and keep a keen eye on its competitors such as

google, Amazon, Sony, Samsung, Microsoft, dell and fitbit. Apple inculcate such corporate culture

which ensures employees safety both physical and career, providing them ample chances to

nourish and enable them abide by the procedures being implemented at the organization. It is

ensured at the Apple Inc. that aims and objectives be in focus and are clearly highlighted in both

the short and long term planning. However, the hierarchy at the organization makes it possible that

planning should always be implemented in the most effective and efficient manner so that

customers may find it innovative and creative.

Conclusion

Apple Inc. is undoubtedly world’s leading organization converting a dream of high quality

performance and accuracy into reality for its customers around the globe since it operates in more

than 24 countries having more than 500 retail stores that not only promise to fulfill customers
needs and requirements but also integrates Apple’s corporate cultural strategy of growth and

differentiation.

Although the company’s history showed that it might have been into troubles after the sad

demise of its CEO Steve Jobs however, When Tim Cook took over the position of Chairman and

CEO of Apple it not only sustained its position, yet it gained more success in the form of generating

highest revenues. Following a strict chain of command Apple Inc. not only holds strong grip on

the reporting professional but also it is an undeniable fact that it allows them to come up with their

innovative ideas. Another important factor that contributed in Apple success story is it s hiring

policy that explains that it is not possible for an employee to stay for a long time with poor or

ineffective performance; whereas, on the other hand Apple also provides wide opportunities for

the growth and development of one’s career so that if a person is working under the department of

marketing must not only be limited to that specific knowledge but be given an opportunity through

job rotation to learn and understand work procedures of other departments as well. Yet it can also

not be avoided that Apple carries a huge variety in its product lines which in future may create

trouble of being obsolete and may not be updated with the passage of time. Therefore, Apple must

think about its existing products and services line which comprises of huge list of:

 iPhone

 Apple Watch

 Apple iPad Family

 Macintosh

 iPod

 Apple TV

 HomePod
  Garrage Band

 Numbers

 Final Cut Pro

 Keynote

 Logic Pro

 Pages

 iWork

 WatchOS

 TVOS

 iLife

 iCloud

 MacOS

 iOS

Thus it can be well-summarized that Cook has played his part so professionally that Apple has

been facing revenues, innovation, increasing number of retail stores, yet ultimately increasing

number of its potential customers around the globe. Not only this but his focus has been on those

remaining countries where he wants to penetrate with his innovative products and services.
 References

 Apple, Inc. (NSDQ:AAPL), 2017

 The statistical portal www.statista.com/statistics/263795/number-of-available -apps-in-

the-apple-app-store/, Accessedd 2017

 Apple Inc. “Form 10-Q 3Q 2017” SEC Edgar, 2017.

 Apple website (https://www.apple.com/leadership/)

 Apple’s Social Responsibility.https://www.onlinedissertationwriting.co.uk/corporate-

social-responsibility

 Product line https://medium.com/s/story/apples-product-line-is-a-mess-5a9a5730cafa

 Financial Data, current ratio, debt management ratio and balance sheets

(yahoo.com/financials)

 Apple Hierarchy Structure http://panmore.com/apple-inc-organizational-culture-features-

implications

 https://www.apple.com/leadership/tim-cook/

 Apple strategy

http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.720.3278&rep=rep1&type=pdf
 Attachment A

1st Tier Includes:

 Chief Executive Officer

 Senior Vice President, Retail & Online Stores

 Senior Vice president, Internet Software & Services

 Senior Vice President, Software Engineering

 Chief Design Officer

 Senior Vice President & CFO (Chief Financial Officer)

  Senior Vice President, Hardware Engineering

 Senior Vice President, Worldwide Marketing

 Senior Vice President and General Counsel

 Senior Vice President, Hardware Technologies

 Chief Operating Officer (COO)

2nd Tier Includes:

 Vice President, Senior Projects

 Vice President, User Interface Design

 Vice President, Communications

 Vice President, Industrial Design

 Vice President, Environment, Policy & Social Initiative

 Vice President and Dean, Apple University

 Vice President, Worldwide Human Resources

 Attachment B

Board Committees
Name Title Board role
Arthur D. Levinson Former Chairman and CEO, Chairman of the Board
Genentech Audit Committee
James A. Bell Former CFO and Corporate President, Audit Committee
The Boeing Company
Tim Cook CEO, Apple
Albert A. Gore Jr. Former Vice President Compensation
of the United States Committee
Nominating
Committee
Robert A. Iger Chairman and CEO, Nominating
The Walt Disney Company Committee Chair
Compensation
Committee
Andrea Jung President and CEO, Grameen America Compensation
Committee Chair
Nominating
Committee
Ronald D. Sugar Former Chairman and CEO, Audit Committee
Northrop Grumman Corporation Chair
Susan L. Wagner Co-founder and Director, BlackRock Audit Committee