Professional Documents
Culture Documents
Outline
• Brief History of HD • Strategic Analysis
• Where we are now – SWOT Matrix
• Vision and Mission – SPACE
• External Analysis – Grand Strategy Matrix
– CPM – IE matrix
– EFE – BCG
– Summary – Summary
• Internal Analysis • Possible strategies
– IFE – QSPM
– Financial ratio analysis • Recommendations
– Net Worth Analysis – Strategic implementation
– Summary 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 announces plans to create an independent software company,
to be known later as Claris.
• For the first time, Apple uses its HyperCard technology to distribute a
1987 HyperCard supplement on diskette for Macintosh personal
computers.
• Apple files suit against Microsoft and Hewlett-Packard to protect its
Macintosh audio visual display. The lawsuit is seen as having industry
wide implications regarding copyright laws.
• Apple reports first billion dollar quarter in its history as net
income rises 108 percent.
• 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
http://www.apple.com/macosx/newfeatures/over200.html
Apple in the Market (as of 4/22/05)
www.investor.stockpoint.com
Financial Ratios (cont)
Growth Rates % Company Industry Sector S&P 500
Sales (MRQ) vs Qtr 1 Yr Ago 36.28 12.54 18.89 13.40
Sales (TTM) vs TTM 1 Yr Ago 15.45 10.97 11.78 11.90
Sales - 5 Yr Growth Rate 0.88 7.09 14.52 9.30
EPS (MRQ) vs Qtr 1 Yr Ago N/A 34.00 35.07 28.69
EPS (TTM) vs TTM 1 Yr Ago 587.04 35.55 41.74 21.92
EPS - 5 Yr Growth Rate -29.16 6.85 13.18 12.15
Capital Spending - 5 Yr Growth Rate 28.95 2.65 1.99 4.06
Financial Strength
Quick Ratio (MRQ) 2.26 1.02 2.54 1.26
Current Ratio (MRQ) 2.53 1.25 3.02 1.76
LT Debt to Equity (MRQ) 0.00 0.38 0.23 0.68
Total Debt to Equity (MRQ) 0.07 0.52 0.29 0.85
Interest Coverage (TTM) 13.75 11.34 9.81 11.86
Profitability Ratios %
Gross Margin (TTM) 27.27 30.60 51.71 47.32
Gross Margin - 5 Yr Avg 26.65 31.08 51.13 47.01
EBITD Margin (TTM) 3.34 12.43 18.41 20.79
Financial Ratios (cont)
EBITD - 5 Yr Avg 2.87 12.18 16.18 20.82
Operating Margin (TTM) 1.63 8.70 13.63 20.33
Operating Margin - 5 Yr Avg 1.25 8.28 11.62 18.35
Pre-Tax Margin (TTM) 2.77 9.47 15.96 17.27
Pre-Tax Margin - 5 Yr Avg 5.34 9.76 14.77 17.54
Net Profit Margin (TTM) 2.03 6.02 9.90 13.12
Net Profit Margin - 5 Yr Avg 4.24 6.55 8.67 11.59
Effective Tax Rate (TTM) 26.74 29.57 27.57 31.31
Effective Tax Rate - 5 Yr Avg 22.62 30.59 32.39 34.20
Management Effectiveness %
Return on Assets (TTM) 2.09 8.44 6.07 6.40
Return on Assets - 5 Yr Avg 5.47 9.25 5.79 6.79
Return on Investment (TTM) 3.05 16.54 8.75 9.97
Return on Investment - 5 Yr Avg 7.90 17.57 9.30 10.93
Return on Equity (TTM) 3.26 30.10 12.17 18.71
Return on Equity - 5 Yr Avg 10.37 31.78 13.11 19.22
Efficiency
Revenue/Employee (TTM) 617,760 568,624 401,787 622,866
Net Income/Employee (TTM) 12,555 37,722 65,474 81,707
Receivable Turnover (TTM) 11.59 7.25 7.64 9.76
Inventory Turnover (TTM) 91.47 20.93 9.64 10.46
Asset Turnover (TTM 1.03 1.45 0.77 0.92
Net Worth Analysis
SE + Additional paid in capital + retained earnings 4,095M + 119M +2,325= 6.5B
9/28/02 Net income x 565M x 5 = 325M
Share price (10/17/03)/ EPS (10/17/03) x avg. net income (3years)
[22.75/ 0.49] x 275M =
12.7B
Number of shares outstanding x share price
358,958,989 x 22.75 = 8.1B
Method average = 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 debt—more 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 W-O Strategies
• Increase awareness through the web • Increase ties with Microsoft and
of the immunity of Mac products to Intel and their products.(W1, W2,
worms and viruses. (S5, O1)
• Advertise using individuals that will link
W4 O2, O3)
Generation X & Y to the iTunes and • Promote to business the safety of
other related products. (S1, O2, O4, having a worm and virus free
O5, O6) computer by using Mac. (W2, W4,
• Using movies and music groups that O1, O5, O6)
are geared towards Gen X and Y to
promote computers and laptops. (S3, W-T Strategies
S5, O2, O5, O6) • Improve relationship with Microsoft
S-T Strategies and Intel so that companies will
• Increase and promote the compatibility see them as compatible. (W1, W2
to Window operating system. (S5,T1) T1)
• Promote the originality of Apple • Increase productivity and turn
computers and the different style and around of high demand products
stable system that is slightly more but
worth the price difference in style, to compete with Dell and HP (W5,
stability and speed. (S2, S5, T2, T4, T2)
T5)
Space
SPACE Matrix
Matrix
Conservative FS Aggressive
CA IS
Forward Integration
Backward Integration
Horizontal Integration
Market Penetration Defensive Competitive
ES
Market Development
Product Development
Joint Venture
Grand Strategy Matrix
RAPID MARKET
GROWTH
Quadrant II Quadrant I
WEAK STRONG
COMPETITIVE COMPETITIVE
POSITION POSITION
Apple
Concentric Diversification Computer
Conglomerate
Quadrant III Quadrant IV
Diversification
Horizontal Diversification SLOW MARKET
GROWTH
Retrenchment
Divestiture
Liquidation
The Internal-External (IE) Matrix
Strong Average Weak
2.0 to 2.99 1.0 to 1.99
3.0 to 4.0
II
III
I
High
3.0 to 3.99
IV V VI
Medium
2.0 to 2.99
VII VIII IX
Market Penetration
International Market
Medium 0 Cash Cows Dogs Development
Product
Development
Sell
Low -20