CORPORATE STORY ON

“APPLE”
Presented By TEAM - A3
 INTRODUCTION
•Founder - Steve Jobs and Steve Wozniak
founded apple computer inc. in 1976.

•Incorporated in 1977

•In 2007 named changed

to Apple inc.

•Vision and Mission

 LOGO HISTORY

The original The Rainbow logo The logo reinvented

 Objectives and Goals
 Over the next 3-4 years Apple would like
to increase their product accessibility
(new stores).

 Increase their market share by 30%.

 Eliminate the need for new products in

order to raise sales.
WHY APPLE ?

OPERA
TIONS

MARKE FINAN
TING CE
 From Financial point of view
• Net sales has been increased almost near to
300% within 4 years.
• Net income has been increased by almost 429%
within 4 years.
• EPS has been raised almost 4 times.
From Operations point of view
Apple as the company with best
supply chain practices in the
world for the third year
running.
From Marketing point of view
HUMAN RESOURCE
ORGANIZATIONAL STRUCTURE
Recruitment policy

Compensation policy( individual

reward)

Training
APPLE MARKETING
strategies
 Apple’s Design Process
“When you first start off trying to solve a
problem, the first solutions you come up
with are very complex, and most people
stop there. But if you keep going, you can
often times arrive at some very elegant and
simple solutions.” -Steve Jobs
VISION: Apple identifies needs and use
cases to make decisions about function
and technologies.

FOCUS: Drops 20 % of non-required

functionalities to perfectly design 80 %
of key user needs.
 STRATEGIES
• Promotional Technique:
– Surprise element in each product launch.
– heavy speculation and curiosity regarding the
product .
• Positioning:
– hype surrounding Apple product was created due
to its unique advertising, word of mouth publicity
by the users and the look and design of the
product.
• SELL AT PREMIUM:
 STRATEGIES
• LOCK THE CUSTOMER IN: 125 m iTunes
accounts linked with credit card.
• CROSS SELLING THE PRODUCT LINE:
– Product line covers all markets, all price ranges,
all needs with an accurate segmentation.
– The iCustomer needs all Apple products to
maximize his user experience.
– Integration reinforced by retail strategy. Apple
Stores fosters the brand appeal and
consequently, the halo effect.
• THINK DIFFERENT: Fostering new Apple
environment.
 COMPUTING:

• Strategic Move:
– By moving to Intel processors in 2006, it became
possible to run Windows easily on Mac.
• High- End Consumers:
• iMac has 9% market share but it accounts for
90% of dollars spent on computers.
• Unlike Windows viruses are almost
nonexistent in Mac universe.
MUSIC REVOLUTION
 SMART PHONE
• Global Launch:
– Penetration in US market.
– Subsidized Handsets.
– Colaboration with AT&T.
– Higher profit due to more ARPU.
iPhone India: Has Apple dialed the wrong
number?

• Skiming the Indian market.

• Colaboration with Vodafone, Airtel.
• Reasons behind failure in Indian market.
With the iPod, Apple Generated A New Environment to Experience the Music
(“Music Access and Listening” Experience Environment)
 COMPETITIVE ADVANTAGE
SIMPLICITY: Technical complexity hidden behind
slick and intuitive user interface gives seamless
experience.

QUALITY: Thanks to hardware and software tight

integration Apple’s product offers great quality.

INNOVATION: Apple does not depend on its suppliers’

technical breakthroughs. It can innovate on hardware
and software at its own pace.
PERFORMANCE OF THE
COMPANY
How did Apple beat Google & Microsoft?
 Revenue Distribution:
• The iTunes Store represented only 11 % of Apple’s revenues
in 2009.
• iPhone (hardware) sales represented 22 % of Apple’s revenues
that amounts to $6.8 bn.
• 40 % of Apple revenues comes from Mac sales (desktop
and laptop).
• Revenue of $400 m that is less than 1% of total revenue
generated by App Store sales since its creation.
 Microsoft ----
Google ----
Apple ----

In 6 years, Apple’s market cap outweighed both the new and

old tech champions
 Computer sold in units
Million
14

12

10

8 Million
6

0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
 Apple’s Retail Stores Stand Out And Have
Been Highly Successful

• 160+ retail stores

• Revenue per square
foot: $2,489
• Compared with $971
per square foot at Best
Buy.
 External Audit
Opportunities
 Increase in worms and viruses
on PCs.
 Large population (Gen X&Y)
which are extremely
individualistic and name
brand conscious.
 Downloadable music and MP3
players are highly marketable.
 Increase sales of computers
online by 25 percent.
 Increase sales of laptops by 20
percent.
Threats
 Companies not seeing Apple as
compatible with their software.
 Dell and HP are major
competitors.
 Increasing competition with
music downloads.
 Dell does not invent but
provides computers at a more
cost effective rate for
customers.
 Strict product control and
vertical diversification.
 Internal Audit
Strengths Weaknesses
 iTunes Music Store is a good source  Weak relationship with Intel and
of revenue, especially with the iPod Microsoft.
and the availability on Windows  Weak presence in business arena.
platform.  Dependency on new product launches.
 Developing own software and  Weak presence in markets other than
hardware. education and publishing.
 Apple’s niche audience provides the  Slow turn around on high demand
company with some insulation from products.
the direct price competition.
 Revamping desktop and notebook
lines.
 Web technology can be used to
improve product awareness and
sales.
 Low debt—more maneuverable.
 Good brand loyalty.
 SWOT MATRIX
S-O Strategies
 Increase awareness through the
web of the immunity of Mac
products to worms and viruses.
 Advertise using individuals that
will link Generation X & Y to the
iTunes and other related products.
 Using movies and music groups
that are geared towards Gen X and
Y to promote computers and
laptops.
S-T Strategies
 Increase and promote the
compatibility to Window operating
system.
 Promote the originality of Apple
computers and the different style
and stable system that is slightly
more but worth the price
difference in style, stability and
speed.
W-O Strategies
 Increase ties with Microsoft and
Intel and their products.
 Promote to business the safety of
having a worm and virus free
computer by using Mac.
W-T Strategies
 Improve relationship with
Microsoft and Intel so that
companies will see them as
SWOT Matrix
compatible.
 Increase productivity and turn
around of high demand products
to compete with Dell and HP.
 Apple’s Marketing Lessons
Make the customer king
Apple customers have tremendous brand loyalty.

Mac users (Mac Marines) would protest to journalists

who wrote derogatory articles about the iPod’s shorter
than expected battery life that many journalists would
avoid writing about Apple's struggles altogether.

Mac User Groups were vocal in their attempt to keep

Apple executives focused on quality when they
perceived the company was lowering its standards.

Apple patrons feel as if they are part of a community -

the result of the "us against them" mentality. Customers
are loyal and have a sense of independence and an anti-
establishment perspective.
 Apple’s Marketing Lessons
Break the marketing mould
Company motto
Jobs did away with “Big Box” stores
Opened 1st retail store in Virginia in
2001
June 2008 - 215 stores
Global chains (Australia, Canada,
China, Italy, Japan, UK)
Retail strategy a huge success - the
“Nordstrom of technology”
1997 Macworld Expo Conference that
Apple would be selling Microsoft 5% of
the company for a $150 million, and be
working with their archrival on new
projects (Microsoft)
APPLE’s – LOGISTICS
AND SUPPLY CHAIN
SUPPLY CHAIN MANAGEMENT - MAIN COMPONENTS
Apple's supply chain judged best
in world again
 A report by AMR Research has named Apple as
the company with best supply chain practices in the
world for the third year running.

In
a feature exploring the secret behind Apple’s succes
s
, it was found that company’s ability to bring
together two sides of the supply chain (digital and
physical) efficiently and at increasingly low cost.
Digital supply chain is a new media term that
encompasses the process of the delivery of digital
media, be it music or video, by electronic means
from the point of origin (content provider) to
destination (consumer).
The main processes of a digital supply chain are
as follows:

1.) True on-demand product availability

2.) Ease of use and speed for content search and

activation.

3.)Pricing and subscriptions

4.) Quality management built on licensing and

refunds
APPLE iPHONE SUPPLY CHAIN
From a high-level, we speculate that the following are
the material suppliers of the Apple iPhone:

 Samsung: The Singapore facility manufactures CPU and

Video processing chips.
 Infineon: The Singapore facility manufactures Baseband
Communications hardware.
 Primax Electronics: The Taiwan facility manufactures Digital
Camera Modules.
 Foxconn International: The Taiwan facility manufactures
internal circuitry.
Entery Industrial: The Taiwan facility manufactures
connectors.
Cambridge Silicon: The Taiwan facility manufactures
bluetooth chipsets.
Umicron Technology: The Taiwan facility manufactures
printed circuit boards.
•Catcher Technology: The Taiwan facility manufactures stainless
metal casings.

•Broadcomm: The U.S. based facility builds touch screen

controllers.

•Marvell: The U.S. based facility builds 802.11 specific parts.

China facility assembles the hardware, holds inventory, and

handles the pick, pack, and ship steps of the fulfillment process.

The iconic iPod and iPhone maker took the top spot
due to "an intoxicating mix of brilliant industrial
design, software interfaces and consumable goods
that are purely digital”.
BENEFITS APPLE GOT FROM ITS SUPPLY
CHAIN:-

 Cost
 Reduced inventories
 Reduced waste
 Reduced total manufacturing costs
 Service
 Establishment of a collaborative framework
 Near real time information flow
CHINA -THE ASSEMBLY HUB OF APPLE
 FINANCE

“LIFE BLOOD AND NERVE CENTRE OF BUSINESS”

 Balance sheet of apple (in million $)
2007 2008 2009
current assets
cash and cash equiv 9,352 11,875 5,263
short term marketable securities 6,034 10,236 18,201
Accounts Receivable, Net 1,637 2,422 3,361
Inventories 346 509 455
Deferred Tax Assets 788 1,044 1,135
Other Current Assets 3,544 3,920 3,140
Total Current Assets 21,701 30,006 31,555

Long-Term Marketable Securities 2379 10528

Property, Plant and Equipment, Net 1832 2455 2954
Goodwill 38 207 206
Acquired Intangible Assets, Net 299 285 247
Other Assets 1008 839 2011
Total Assets 24878 36171 47501

Current Liabilities:
Accounts Payable 4970 5520 5601
Accrued Expenses 3023 4224 3852
Deferred Revenue 1113 1617 2053
Total Current Liabilities 9106 11361 11506

Deferred Revenue - Non-Current 554 768 853

Other Non-Current Liabilities 687 1745 3502
Total Liabilities 10347 13874 15861

Shareholders' Equity:
Common Stock 5368 7177 8210
Retained Earnings 9100 15129 23353
Accumulated Other Comprehensive Income/(Loss) 63 -9 77
Total Shareholders' Equity 14531 22297 31640
 Common size statement for the year ended
2007 2008 2009

current assets
cash and cash equiv 37.59% 32.83% 11.08%
short term marketable securities 24.25% 28.30% 38.32%
Accounts Receivable, Net 6.58% 6.70% 7.08%
Inventories 1.39% 1.41% 0.96%
Deferred Tax Assets 3.17% 2.89% 2.39%
Other Current Assets 14.25% 10.84% 6.61%
Total Current Assets 87.23% 82.96% 66.43%

Long-Term Marketable Securities 6.58% 22.16%

Property, Plant and Equipment, Net 7.36% 6.79% 6.22%
Goodwill 0.15% 0.57% 0.43%
Acquired Intangible Assets, Net 1.20% 0.79% 0.52%
Other Assets 4.05% 2.32% 4.23%
Total Assets 100.00% 100.00% 100.00%

Current Liabilities:
Accounts Payable 19.98% 15.26% 11.79%
Accrued Expenses 12.15% 11.68% 8.11%
Deferred Revenue 4.47% 4.47% 4.32%
Total Current Liabilities 36.60% 31.41% 24.22%
0.00%
Deferred Revenue - Non-Current 2.23% 2.12% 1.80%
Other Non-Current Liabilities 2.76% 4.82% 7.37%
Total Liabilities 41.59% 38.36% 33.39%

Shareholders' Equity:
Common Stock 21.58% 19.84% 17.28%
Retained Earnings 36.58% 41.83% 49.16%
Accumulated Other Comprehensive Income/(Loss) 0.25% -0.02% 0.16%
Total Shareholders' Equity 58.41% 61.64% 66.61%

Total Liabilities and Shareholders' Equity 100.00% 100.00% 100.00%

 Comparative Balance sheet(Amount in million $)
2007 to 2008 2008 to 2009
current assets inc/dec inc/dec (per) inc/dec inc/dec(per)
cash and cash equiv 2,523 26.98% -6,612 -55.68%
short term marketable securities 4,202 44.93% 7,965 67.07%
Accounts Receivable, Net 785 8.39% 939 7.91%
Inventories 163 1.74% -54 -0.45%
Deferred Tax Assets 256 2.74% 91 0.77%
Other Current Assets 376 4.02% -780 -6.57%
Total Current Assets 8,305 88.80% 1,549 13.04%

Long-Term Marketable Securities 2,379 25.44% 8,149 68.62%

Property, Plant and Equipment, Net 623 6.66% 499 4.20%
Goodwill 169 1.81% -1 -0.01%
Acquired Intangible Assets, Net -14 -0.15% -38 -0.32%
Other Assets -169 -1.81% 1,172 9.87%
Total Assets 11,293 120.75% 11,330 95.41%

Current Liabilities:
Accounts Payable 550 5.88% 81 0.68%
Accrued Expenses 1,201 12.84% -372 -3.13%
Deferred Revenue 504 5.39% 436 3.67%
Total Current Liabilities 2,255 24.11% 145 1.22%
0.00% 0 0.00%
Deferred Revenue - Non-Current 214 2.29% 85 0.72%
Other Non-Current Liabilities 1,058 11.31% 1,757 14.80%
Total Liabilities 3,527 37.71% 1,987 16.73%
0.00% 0 0.00%
Shareholders' Equity: 0.00% 0 0.00%
Common Stock 1,809 19.34% 1,033 8.70%
Retained Earnings 6,029 64.47% 8,224 69.25%
Accumulated Other Comprehensive Income/(Loss) -72 -0.77% 86 0.72%
Total Shareholders' Equity 7,766 83.04% 9,343 78.68%

Total Liabilities and Shareholders' Equity 11,293 120.75% 11,330 95.41%

 Income statement

2007 2008 2009

Net sales:
Domestic $14,683 $20,893 $22,325
International 9,895 16,598 20,580
Total net sales 24,578 37,491 42,905

Costs and expenses:

Cost of sales 16,426 24,294 25,683
Research and development (R&D) 782 1,109 1,333
Selling, general and administrative (SG&A) 2,963 3,761 4,149
Total Operating Expenses 3,745 4,870 5,482
Operating income 4,407 8,327 11,740
Other income and expense 599 620 326
income before provision for income taxes 5,006 8,947 12,066
Provision for income taxes 1,511 2,828 3,831

Net income 1,511 $6,119 $8,235

 Common size income statement
2007 2008 2009
Net sales:
Domestic 59.74% 55.73% 52.03%
International 40.26% 44.27% 47.97%
Total net sales 100.00% 100.00% 100.00%
0.00% 0.00% 0.00%
Costs and expenses: 0.00% 0.00% 0.00%
Cost of sales 66.83% 64.80% 59.86%
Research and development (R&D) 3.18% 2.96% 3.11%
Selling, general and administrative (SG&A) 12.06% 10.03% 9.67%
Total Operating Expenses 15.24% 12.99% 12.78%
Operating income 17.93% 22.21% 27.36%
Other income and expense 2.44% 1.65% 0.76%
income before provision for income taxes 20.37% 23.86% 28.12%
Provision for income taxes 6.15% 7.54% 8.93%
0.00% 0.00% 0.00%
Net income 6.15% 16.32% 19.19%
 Comparative income statement
2007 tO 2008 2008 t0 2009
inc/cec inc/dec(per) inc/dec inc/dec(per)
Net sales:
Domestic $6,210 42.29% $1,432 6.85%
International $6,703 45.65% $3,982 19.06%
Total net sales $12,913 87.95% $5,414 25.91%
$0 0.00% $0 0.00%
Costs and expenses: $0 0.00% $0 0.00%
Cost of sales $7,868 53.59% $1,389 6.65%
Research and development (R&D) $327 2.23% $224 1.07%
Selling, general and administrative (SG&A) $798 5.43% $388 1.86%
Total Operating Expenses $1,125 7.66% $612 2.93%
Operating income $3,920 26.70% $3,413 16.34%
Other income and expense $21 0.14% ($294) -1.41%
income before provision for income taxes $3,941 26.84% $3,119 14.93%
Provision for income taxes $1,317 8.97% $1,003 4.80%
$0 0.00% $0 0.00%
Net income $4,608 31.38% $2,116 10.13%
 RATIO ANALYSIS:
ratios 2007 2008 2009

Current ratio 2.38 2.64 2.74

Net profit ratio 6.15 16.32 19.19

Operating profit 17.93 22.21 27.36

ratio
 EARNING PER SHARE
EPS
7

4
EPS

0
2004.5 2005 2005.5 2006 2006.5 2007 2007.5 2008 2008.5 2009 2009.5
Over view about the company
 THANK YOU
And start thinking different from today…..