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APPLE INC.

Presented To Dr.Sarwar Presented By: Shahbaz Idrees Khubaib Belal Umair Shafeeq

Industry Scope
Growth in technology industry is high in emerging market(china,india,Middle East). By 2010 more than one billion PCs were used around the world. Industry is growing with 6.6%(2009)
(www.news.cnet.com/8301-1001_3-20002117-92.html)

Pcs shipment increase by 57% and were expected to reach 70% in 2012.

Trends
Increased demand for portability. People used App store for downloading application. Rapid change of technology almost in 9 months. Appliance are used for education, cooperate, entertainment, data transfer. Decrease in MP3 player sales.

DEEP List Analysis


Demographic Emerging markets China and India Use and experience apple software on retail store 280 store in 10 countries Preference shifted towards features phone attractive hardware design and user friendly interface. Developers App sales. Next generation mobile devices. Encroach on functionality. Education marked focused. Home consumer life style.

Economic Factors
Premium price of Apple s products Price sensitive buyers loved the prices. Large enterprises bought directly from buyer. CPU prices dropped since 1970 30% per year. Price competition in emerging market Grey markets (unauthorized use of I Phone) Subsidized and unsubsidized I Phone Low cost I phone

Social Factors
Online music stores discounted prices Social networking services. User friendly. Download applications on to the mobile phone. New consumer behavior. 1997 launched website for direct sales. White box channel.

Technological factors
Advance micro devices, VIA Technology Key application software (word processing,graphic,desktoppublishing,internet
browsing)

3G network in iphone A4 link Intel Atom (ipad) low power ,fast processing speed

Ecological
Worlds greenest line up of note books that were energy efficient and used recyclable materials.

Porters Five Force Model


Bargaining power of buyers Bargaining power of supplier
(Process chips, graphic card software,pherpheral equipment)

Threat of substitute Intensity of rivalry


(Dell,HP,IBM,Tosheba,Sony)

Threat of new entrant

Strategic Issue
Apple is facing a projected decline in earnings per share in 2009 and must assess the future leadership of the organization

KSF
Research and development Innovation in features and design Advertisement Distribution network Brand image Sales and marketing Ability to effectively sell products

SWOT ANALYSIS
Strengths Brand Loyalty Steve Jobs strong leader Corporate culture innovation Research and Development(9%) Strong distribution network(280stores in 10
countries)

Successful advertising campaign


Slogan (The ultimate all in one design)

Weakness
Apple depends on software of Microsoft. High price Mac speed was low as compared to Microsoft. Mac Mini had limited memory and few expansion option. Steve Jobs dependency Niche Market, Less Penetration

OPPORTUNITIES
Less expensive new product lines with quality. New car models with ipod connectivity. Emerging market(China ,India ,Middle East)

Threats
Pressure from competitors. Substitution effect Technology changes at a rapid rate. Forced to develop new products. Short product life cycle. Economy downfall

Current Scenario
Sales

Competitors of PCs
Hewlett Packard (HP) Acer Dell Lenvo

Competitor Analysis
HP
World largest technology company diversifying into services servers and storage Strong retail presence through 110000 world wide outlets

Acer & Lenvo


Active in emerging market Use Taiwan based gateway Acer strength innote books &netbooks Worldwide PC shipment grew 22% in 2009

Lenvo Dominant position in china where it commanded a 3rd position of the market Dell Devoted 1% of revenue to R&D Contract with Taiwan and china foe design and testing Consumer friendly and low cost

Products of Apple
I pod
Sleek design,simpler user interfae,large storage 1000 songs can store 70%market share MP3 market 40% Gross Margin in 2007 I pod touch 3.5inch screen , multi touch graphic interface

I-Tunes
Music down load per pay song I-tune store is the No.1 music store in the world Feb 2010 sold 10 billion songs 8000 moves can be rented or download from Ipod 113000 IPod sold per quarter (August)

I Phone
Development cost 150m 3.5 inch touch screen In 1st generation sold 6m unit in 5 quarter 3GB,8GB,16GB model 30% of apple total revenue Capturing 14%market shares

I Pad
Use Apple own branded chip A4 like Intel's A tom 450000 IPad sold on its 1st week

Competitor Environment

Value Creation Process


Apple I,II,III

Mac

FF
Focus On Education

C o n v e r g e n c e

eMac
Music Strategy (iTunes) Video Strategy (iMovie) Lifestyle Strategy

Adding Value

Internet Strategy (iTools) Digital Hub

iMac

Apples Problems
Prices Too High Low Customization

Low Market Share

Differentiation Strategy
Unique Features and characteristics Commands Premium Price High Customer Service Superior Quality Prestige Rapid Innovation
Sustainable Competitive Advantage

Strategic Alternatives
Problem Strategy Alternative
Extend their current product line to include some products with a lower price point. Ex. Re-launch Mac Mini Low Market-Share Price Differentiation

RECOMMENDATIONS
FOR COMPANY: Lowering the cost of products and maintaining the same quality standards Can form joint ventures Knowledge Management More number of retail stores for easy access Continuous innovation to expand Be unique and different

Questions????

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