Professional Documents
Culture Documents
Jessica Bourgoin
Amy Kakuk
Beth Theriault
04/25/2005
Outline
Brief History of HD
Where we are now
Vision and Mission
External Analysis
CPM
EFE
Summary
Internal Analysis
IFE
Financial ratio analysis
Net Worth Analysis
Summary
Strategic Analysis
SWOT Matrix
SPACE
Grand Strategy Matrix
IE matrix
BCG
Summary
Possible strategies
QSPM
Recommendations
Strategic implementation
and desired results
Objectives & Goals
History 1976-1978
Wozniak and Jobs form the Apple Computer Company on April Fool's
Day.
Wozniak and Jobs finish work on a preassembled computer circuit
board. It has no keyboard, case, sound or graphics. They call it the
Apple I.
The Apple I board is released for sale to hobbyists and electronics
enthusiasts at the price of $666.66.
Apple's first formal business plan sets a goal for sales to grow to $500
million in ten years. As it turns out, the company will pass that mark in
half the time.
Apple I computer boards are sold through 10 retail stores in the U.S.
Apple moves from Jobs' garage to a building on Stevens Creek
Boulevard in Cupertino, California.
The new Apple II is unveiled at the first West Coast Computer Fair. It
is the first personal computer able to generate color graphics and
includes a keyboard, power supply and attractive case.
The Apple logo as seen today is designed by Rob Janoff, art director
for Regis McKenna Advertising.
Regis McKenna Advertising launches its first ad campaign for Apple.
Although advertising is initially aimed at electronics enthusiasts,
Apple will soon become the first company to advertise personal
computers in consumer magazines.
Monthly orders reach a $1 million annual sales rate.
http://www.apple-history.com/frames/?
History 1978
Apple introduces various interface cards for connecting
to most printers.
Apple's Disk II is introduced at the Consumer
Electronics Show. It is the easiest to use, lowest priced,
and fastest mini-floppy disk drive ever offered by a
computer manufacturer. It will make possible the
development of serious software. Production at first is
handled by just two employees, turning out 30 drives a
day.
In only its second year, Apple is one of the fastest
growing companies in America. Sales have increased,
and its dealer network has grown to over 300.
History 1979-1981
Apple's first printer, the Silentype, is introduced.
Apple opens a manufacturing plant in Carrollton, TX. Apple facilities
now occupy more than half a million square feet of floor space in the
U.S. and Europe.
Apple goes public. Morgan Stanley and Co. and Hambrecht & Quist
underwrite an initial public offering of 4.6 million shares of Apple
common stock at a price of $22 per share. Every share is bought
within minutes of the offering, making this the largest public offering
since Ford went public in 1956.
Apple's employee count breaks 1,000.
Apple's distribution network is the largest in the industry-800
independent retailers in the U.S. and Canada, plus 1,000 outlets
abroad.
Apple's first mass storage system, the 5MB ProFile(tm) hard disk is
introduced, priced at $3,499.
Apple becomes a household name. Surveys show that public
awareness rose from 10 percent to 80 percent in 1981.
History 1982-1985
Apple Dot Matrix printer introduced for $2,195.
Apple becomes the first personal computer company to reach
$1 billion annual sales rate. It throws a "Billion Dollar Party" for
employees.
Apple University founded to provide employee training
programs.
Apple enters the Fortune 500 at number 411 in under five years.
EVA (Employee Volunteer Action) is created to match the skills
of Apple employees with community needs.
Apple is elected to the Consumers Digest Hall of Fame for
responsiveness to consumer needs.
Apple II receives the 1984 Industrial Design Excellence Award
(IDEA) sponsored by the Product Industrial Designers Society
of America.
Apple announces a computer training scholarship program for
elementary and secondary school educators.
History 1986-1990
Apple reports net sales of $4.07 billion and net income of $400.3
million for fiscal year 1988.
Apple acquires Coral Software Corp., which markets programming
languages and artificial intelligence tools for Macintosh computers.
Apple introduces 32-Bit QuickDraw(tm) that allows Macintosh
personal computers to process and display photo-quality documents,
images and visualizations with exceptional color clarity.
Apple donates $2 million in computers to 23 schools to help at-risk
students.
Fiscal 1990 revenues surpass $5.5 billion.
History 1991-1995
Apple announces it will restructure the company over the next
12 months to reduce operating expenses. Apple's workforce is
reduced approximately 10 percent.
Apple and IBM sign a letter of intent to cooperate on major
technology initiatives for the 1990s.
Apple, IBM, and Motorola finalize milestone technology
alliance.
Apple announces a new Token Ring 4/16 NB Card, for the
Macintosh product line. It is the first product to emerge from
Apple and IBM alliance.
Apple and Kodak announce that they are working together to
integrate support for Photo CD images into future versions of
QuickTime.
The U.S. Environmental Protection Agency officially releases
the Energy Star emblem for display with energy-efficient
computers and peripherals. Apple has more than 20 products
that meet the EPA's the technical requirements.
Apple's Macintosh celebrates 10th birthday!
Apple in 2005
Mini Mac
The Apple Mini Mac is a
compact desktop
computer. It is 2 inches
tall and weights 2.9lbs.
The Mini Mac starts at
$499 and comes
standard with iChat AV
desktop video
conferencing, Mail,
Address Book,
QuickTime, iSync, and
a DVD Player.
Graphics from: http://www.apple.com/macmini/
http://www.apple.com/pr/library/2005/jan/index.html
iPod Shuffle
The iPod shuffle is a
smaller version of the
original iPod. It is much
smaller and lighter and
can double as a portable
USB flash drive with up to
1GB of storage space to
back up personal files
and exchange them
between computers. For
$99 you can purchase the
512MB holding up to 120
songs or the 1GB holding
up to 240 songs for just
$149.
http://www.apple.com/pr/library/2005/jan/index.html
Graphics from: http://www.apple.com/ipodshuffle/
Mac OS X Tiger
On April 29, 2005, the
Mac OS X Tiger will be
released. This is an
advanced operating
system that requires a
Macintosh computer with
a PowerPC G3, G4 or G5
processor, Built-in
FireWire, 256MB of RAM,
and 3GB of available
hard disk space. It cost
$129 for a single user
and $199 for a 5 license
family pack
http://www.apple.com/macosx/newfeatures/over200.html
External Audit
Opportunities
Threats
Computer Market
Dell
Weight
Rating
Weighted
Score
Rating
Weighted
Score
Rating
Weighted
Score
Market Share
Price
Financial Position
Product Quality
Consumer Loyalty
Advertising
Management
Global Expansion
Innovation
Web Development
0.10
0.10
0.15
0.15
0.15
0.04
0.06
0.06
0.14
0.05
1
2
3
3
4
2
4
2
4
3
0.10
0.20
0.45
0.45
0.60
0.08
0.24
0.12
0.56
0.15
3
3
2
2
2
3
3
2
2
2
0.30
0.30
0.30
0.30
0.30
0.12
0.18
0.12
0.28
0.10
4
4
3
4
3
3
3
3
2
3
0.40
0.40
0.45
0.60
0.45
0.12
0.18
0.18
0.28
0.15
Total
1.00
2.95
2.30
3.21
Weight
Rating
Weighted
Score
0.15
0.60
0.6
0.18
Large population (Gen X & Y) which are extremely individualistic and name
brand conscious.
0.15
0.60
0.04
0.12
0.05
0.15
0.10
0.40
0.07
0.14
0.03
0.09
0.10
0.40
Dell does not invent but provides computers at a more cost effective rate for
customers.
0.06
0.18
0.04
0.08
0.15
0.30
TOTAL
1.00
Opportunities
Threats
3.24
External Summary
Apple has rated the Increase in worms and
virus on PCs, Large population (Gen X & Y)
which are extremely individualistic and name
brand conscious, and the Creating more ties
with Microsoft products as their three highest
opportunities.
Apple has rated that the fact of Dell and HP
being such huge competitors as their top
threat.
Internal Audit
Strengths
Weaknesses
Weight
Rating
Weighted
Score
iTunes Music Store is a good source of revenue, especially with the iPod and the
availability on Windows platform.
0.15
0.60
Apples niche audience provides the company with some insulation from the
direct price competition.
0.10
0.30
0.10
0.30
0.06
0.24
0.14
0.42
0.05
0.15
0.10
0.40
0.06
0.06
0.07
0.07
0.03
0.06
0.10
0.10
0.04
0.08
Total
1.00
Strengths
Weaknesses
2.78
Industry
Sector
S&P 500
69.70
26.87
33.52
24.01
277.96
54.58
64.14
45.41
6.84
17.34
19.55
16.26
Beta
1.75
1.60
1.91
1.00
1.41
1.84
5.08
3.33
2.20
7.56
4.78
4.29
2.26
8.77
6.53
7.56
37.64
19.69
25.48
17.32
45.13
23.77
28.26
28.97
% Owned Institutions
63.21
50.31
48.14
64.19
Dividend Yield
N/A
0.70
0.75
2.04
0.00
0.34
0.27
1.48
NM
7.94
1.50
6.48
0.00
7.99
9.34
26.78
Valuation Ratios
Dividends
www.investor.stockpoint.com
Company
Industry
Sector
S&P 500
36.28
12.54
18.89
13.40
15.45
10.97
11.78
11.90
0.88
7.09
14.52
9.30
N/A
34.00
35.07
28.69
587.04
35.55
41.74
21.92
-29.16
6.85
13.18
12.15
28.95
2.65
1.99
4.06
2.26
1.02
2.54
1.26
2.53
1.25
3.02
1.76
0.00
0.38
0.23
0.68
0.07
0.52
0.29
0.85
13.75
11.34
9.81
11.86
27.27
30.60
51.71
47.32
26.65
31.08
51.13
47.01
3.34
12.43
18.41
20.79
Financial Strength
Profitability Ratios %
2.87
12.18
16.18
20.82
1.63
8.70
13.63
20.33
1.25
8.28
11.62
18.35
2.77
9.47
15.96
17.27
5.34
9.76
14.77
17.54
2.03
6.02
9.90
13.12
4.24
6.55
8.67
11.59
26.74
29.57
27.57
31.31
22.62
30.59
32.39
34.20
2.09
8.44
6.07
6.40
5.47
9.25
5.79
6.79
3.05
16.54
8.75
9.97
7.90
17.57
9.30
10.93
3.26
30.10
12.17
18.71
10.37
31.78
13.11
19.22
Revenue/Employee (TTM)
617,760
568,624
401,787
622,866
12,555
37,722
65,474
81,707
11.59
7.25
7.64
9.76
91.47
20.93
9.64
10.46
1.03
1.45
0.77
0.92
Management Effectiveness %
Efficiency
Method average =
6.5B
325M
12.7B
8.1B
6.9B
Internal Summary
Apple has rated their iTunes Music Store being a good source of
revenue, especially with the iPod and the availability on Windows
platform, their low debtmore maneuverable, and their Web
technology being used to improve product awareness and sales as
their 3 highest strengths.
Apple did not rate any of their weaknesses higher than a 2. they
should work on being able to direct more attention to those areas
and especially concentrate on the two areas of dependency on new
product launches and the weak presence in business arena.
SWOT Matrix
S-O Strategies
S-T Strategies
W-O Strategies
Increase ties with Microsoft and
Intel and their products.(W1, W2,
W4 O2, O3)
Promote to business the safety of
having a worm and virus free
computer by using Mac. (W2, W4,
O1, O5, O6)
W-T Strategies
Improve relationship with
Microsoft and Intel so that
companies will see them as
compatible. (W1, W2 T1)
Increase productivity and turn
around of high demand products
to compete with Dell and HP (W5,
T2)
Space
SPACE Matrix
Matrix
Conservative
FS
CA
Aggressive
IS
Forward Integration
Backward Integration
Horizontal Integration
Market Penetration
Market Development
Product Development
Joint Venture
Defensive
ES
Competitive
Quadrant II
Quadrant I
WEAK
STRONG
COMPETITIVE
COMPETITIVE
POSITION
POSITION
Apple
Concentric Diversification Computer
Conglomerate
Diversification
Horizontal Diversification
Retrenchment
Divestiture
Liquidation
Quadrant III
Quadrant IV
SLOW MARKET
GROWTH
Average
Weak
3.0 to 4.0
2.0 to 2.99
1.0 to 1.99
II
III
High
3.0 to 3.99
IV
VI
Medium
2.0 to 2.99
VII
Grow and
Build
VIII
IX
Low
1.0 to 1.99
Segments
Revenue
Profit
EFE
IFE
Domestic
54%
52%
3.5
2.6
International
46%
48%
3.0
3.0
Medium .50
Low 0.0
Stars
High +20
Question Marks
Domestic
International
Cash Cows
Medium
0
Market
Development
Dogs
Product
Development
Sell
Low -20
Segments
Revenue
Profit
EFE
IFE
Growth Rate
Domestic
54%
52%
3.5
2.6
17
0.3
International
46%
48%
3.0
3.0
0.2
IE
SPACE
GRAND
COUNT
Forward Integration
Backward Integration
Horizontal Integration
Market Penetration
Market Development
Product Development
Concentric Diversification
Conglomerate Diversification
Horizontal Diversification
Joint Venture
Retrenchment
Divestiture
Liquidation
QSPM
Key Internal Factors
Weight
Start
producing
Wintel
compatible
Strengths
Expand
production into
Asia
AS
TAS
AS
TAS
0.15
1.00
0.15
3.00
0.45
0.20
4.00
0.80
3.00
0.60
0.20
4.00
0.80
3.00
0.60
0.15
4.00
0.60
3.00
0.45
0.15
4.00
0.60
1.00
0.15
0.15
2.00
0.30
4.00
0.60
SUBTOTAL
1.00
Weaknesses
3.25
2.85
QSPM
Key External Factors
Weight
Start producing
Wintel
Expand production
into Asia
Opportunities
AS
TAS
AS
TAS
0.15
.30
.45
0.06
1.00
0.12
4.00
0.48
0.15
1.00
0.10
4.00
0.40
0.08
1.00
0.08
4.00
0.32
0.10
4.00
0.12
2.00
0.08
0.10
1.00
0.10
3.00
0.30
0.06
1.00
0.06
3.00
0.18
0.15
1.00
0.05
3.00
0.15
SUBTOTAL
1.00
Threats
0.93
2.36
4.18
5.21
Recommendations
Strategy 1
Open six computer retail stores (not just peripheral and accessories). Apple currently has
stores opened throughout the United States with only peripheral and accessories for their
computers. Adding the hardware should generate more hands-on awareness and use
already established locations.
This will increase product accessibility for those who wish to view items other than just
accessories and increase awareness of the originality of Apples products.
2 percent increase over the next 2 years in sales representatives for the computer
hardware.
Strategy 2
Contract music spokesperson to attract the upcoming generation who are attending high
school and college. This will invoke a sense of style and linking apple with a distinctive and
memorable top 10 hit. This will stay in the customers awareness and influence future
purchase decisions.
Contracting one music spokesperson estimated $6 million.
Strategy 3
Add more features to current products for greater Wintel compatibility. Features such as
iTune software compatible with windows based computers, Office programs loadable from
PC installation disk (This would require a software agreement with Microsoft). In late
October 2003 Apple released an iTune software package that is PC ready.
It will increase the United States market share at least 30 percent for the next 2-3
years.
$50 million is the estimated cost for Research and Development.
Cost of Recommendations
Open 6 computer retail stores (not
just peripheral and accessories)
Contract music spokes person
(Sarah McLachlan | 50 cent) for a
cost of
Start production of Wintel
compatible software for a cost of
100M
6M
50M
156M
EPS/EBIT Analysis
Common Stock
Financing
EBIT
Interest (6%)
EBT
Taxes (30%)
EAT
# Shares
EPS
Debt Financing
50/50 Combination
Financing
High
Low
High
Low
High
Low
20,000.00
6,000.00
20,000.00
6,000.00
20,000.00
6,000.00
0.00
0.00
3,900.00
3,900.00
1,950.00
1,950.00
20,000.00
6,000.00
16,100.00
2,100.00
18,050.00
4,050.00
6,000.00
1,800.00
4,830.00
630.00
5,415.00
1,215.00
14,000.00
4,200.00
11,270.00
1,470.00
12,635.00
2,835.00
5,653.00
5,653.00
1,837.00
1,837.00
3,747.00
3,747.00
2.48
0.74
6.14
0.80
3.37
0.76