...Strategic Management Case plus Case Answer – Apple’s Profitable but Risky Strategy Case study Apple’s profitable but risky strategy When Apple’s Chief Executive – Steven Jobs – launched the Apple iPod in 2001 and the iPhone in 2007, he made a significant shift in the company’s strategy from the relatively safe market of innovative, premium-priced computers into the highly competitive markets of consumer electronics. This case explores this profitable but risky strategy. Note that this case explores in 2008 before Nokia had major problems with smartphones – see Case 9.2 and Case 15.1 for this later situation. Early beginnings To understand any company’s strategy, it is helpful to begin by looking back at its roots. Founded in 1976, Apple built its early reputation on innovative personal computers that were par-ticularly easy for customers to use and as a result were priced higher than those of competitors. The inspiration for this strategy came from a visit by the founders of the company – Steven Jobs and Steven Wozniack – to the Palo Alto research laboratories of the Xerox company in 1979. They observed that Xerox had developed an early version of a computer interface screen with the drop-down menus that are widely used today on all personal computers. Most computers in the late 1970s still used complicated technical interfaces for even simple tasks like typing – still called ‘word-processing’ at the time. Jobs and Wozniack took the concept back to Apple and...
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...Strategic Management Case plus Case Answer – Apple’s Profitable but Risky Strategy Case study Apple’s profitable but risky strategy When Apple’s Chief Executive – Steven Jobs – launched the Apple iPod in 2001 and the iPhone in 2007, he made a significant shift in the company’s strategy from the relatively safe market of innovative, premium-priced computers into the highly competitive markets of consumer electronics. This case explores this profitable but risky strategy. Note that this case explores in 2008 before Nokia had major problems with smartphones – see Case 9.2 and Case 15.1 for this later situation. Early beginnings To understand any company’s strategy, it is helpful to begin by looking back at its roots. Founded in 1976, Apple built its early reputation on innovative personal computers that were par-ticularly easy for customers to use and as a result were priced higher than those of competitors. The inspiration for this strategy came from a visit by the founders of the company – Steven Jobs and Steven Wozniack – to the Palo Alto research laboratories of the Xerox company in 1979. They observed that Xerox had developed an early version of a computer interface screen with the drop-down menus that are widely used today on all personal computers. Most computers in the late 1970s still used complicated technical interfaces for even simple tasks like typing – still called ‘word-processing’ at the time. Jobs and Wozniack took the concept back to Apple and developed their...
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...Strategic Management Case plus Case Answer – Apple’s Profitable but Risky Strategy Case study Apple’s profitable but risky strategy When Apple’s Chief Executive – Steven Jobs – launched the Apple iPod in 2001 and the iPhone in 2007, he made a significant shift in the company’s strategy from the relatively safe market of innovative, premium-priced computers into the highly competitive markets of consumer electronics. This case explores this profitable but risky strategy. Note that this case explores in 2008 before Nokia had major problems with smartphones – see Case 9.2 and Case 15.1 for this later situation. Early beginnings To understand any company’s strategy, it is helpful to begin by looking back at its roots. Founded in 1976, Apple built its early reputation on innovative personal computers that were par-ticularly easy for customers to use and as a result were priced higher than those of competitors. The inspiration for this strategy came from a visit by the founders of the company – Steven Jobs and Steven Wozniack – to the Palo Alto research laboratories of the Xerox company in 1979. They observed that Xerox had developed an early version of a computer interface screen with the drop-down menus that are widely used today on all personal computers. Most computers in the late 1970s still used complicated technical interfaces for even simple tasks like typing – still called ‘word-processing’ at the time. Jobs and Wozniack took the concept back to Apple and developed their...
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...player, online digital music shop, and smartphone with multi-touch screen which use finger for control. It literally changed the world. However, the growth of Apple Inc. almost went into a dead end during the 90s, until Steve Jobs was back. Company’s segmentation, targeting and positioning (STP) and pricing strategy are important issues that partially responsible for its fall and renascence. Since iPhone was so successful in personal cellphone market, should it shift to business market? Historical Strategies At late 70s, when Apple Inc. was founded, personal computers were meanly used in academic institute or industry. It is because of two reasons. First, computers back then require knowledge of “computer language” (programing) to use, and most of people didn’t have the skill. Second, computers were too expensive for personal users to afford. So, when Apple Inc. was founded, its market segment was those academic research institutes, financial institutes, and industrial businesses who require large amount of calculations and able to afford computers. So, Apple was targeting businesses as its main market. Which has been proven a right decision. The market share of Apple’s personal computer increased from 0 to 17% in first 4 years after it was found. At 80s, Apple was mainly targeting education and business market, due to graphic user interface and “mouse” device for control innovation, it had a bump on market share at 1984. But when Microsoft Inc. adopted the technologies and...
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...Inc., formally known as Apple Computers. This story is innovative, includes traditional business strategies, an amazing record in leading change and unplanned successes. Steve Jobs, one of Apple’s founders, made the companies mission to be, “to bring an easy-to-use computer to the market” (Yoffie, 2008). When Apple went public in late 1980 the company immediately took on a new objective – to make the stockholders money. The company had several entrusted members that had different managerial strategies that were used to accomplish the objectives. Since the company was founded it has maintained a strategy of continuous innovation in product and application development. In the beginning Apple’s products were easy to use, revolutionary and profitable; however they struggled due to the lack of alliances with other industries. In the early 90’s Apple began reaching out to other industries to establish alliances and that proved to be a strategic move in order to ensure Apple achieved the company’s original mission as well as meet the stockholders demand of making money. Apple’s Leadership Steve Jobs along side of Steve Wozniak founded Apple Computers when they began producing personal computers in 1976 out of Jobs’ garage. The company quickly grew and began dominating the personal computer industry because of the graphics and sound integration. They had a particular strategy and that was to improve in innovation continuously. In 1984, the pair introduced a new computer...
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...Introduction Strategic planning is an organizational management activity that is used to set priorities, focus energy and resources, strengthen operations, ensure that employees and other stakeholders are working toward common goals, establish agreement around intended outcomes/results, and assess and adjust the organization's direction in response to a changing environment. It is a disciplined effort that produces fundamental decisions and actions that shape and guide what an organization is, who it serves, what it does, and why it does it, with a focus on the future. Effective strategic planning articulates not only where an organization is going and the actions needed to make progress, but also how it will know if it is successful. History Apple Inc: Apple Inc formerly known as Apple Computer Inc which provides corporate Server, MAC OS Systems and Operating System. Apples core product lines are the iPhone, iPod and Macintosh System. Steve Jobs and Steve Wozaniak, The founder of Apple has created the Apple Computer on 1st April 1976 and integrated in the company on 3rd January 1977, in Cupertino California. It has driven the Computer manufacturing market for more than two decades. Mr. Steve Jobs who was expelled in 1985 was return as CEO of the APPLE Inc in 1996 with new Ideas and corporate philosophy. With introduction of successful IPod Player in to 2001 Apple has again proved itself as a Market leader in consumer electronics. Latest era of extraordinary success of...
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...perspective, he wanted a unique and effective insight about how people wanted to interact with technology. Steve Job believes in the ideology of Henry Ford who once said. “If I had asked people what they wanted, they will say faster horses.” Further illustrating the ideology that customer’s main problem is thinking on what they know instead on what is possible. So Job and his colleagues thought about customer experience more deeply than the customers could. According to Steve Job, Apple’s mission statement is to contribute to the world by making tools for the mind that advance humankind, through the innovation of PC and mobile devices. Thus, this vision statement is satisfactory and suited to the condition of apple. However, Apple’s mission statement fails to indicate goals for other areas of the business. It lacks details about factors like innovation and market leadership. Apple mission statement is manageable, achievable and realistic but it is just too narrow to lead in the business world. Apple’s downfall was certain in 1976 went the company was almost declared bankrupt, but Steve use important marketing...
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...Consulting Team, UMAK Chapter RE: Analysis of Apple Company’s future and its competitive advantage BRIEF SUMMARY: This report aims to evaluate Apple Computer • past and present performance in order to most importantly stipulates the future position of this largely successful company. Being that the company’s objective centers on increasing profits, increasing market share, and maintaining brand image., this report tries to identify strategies that make their company more competitive. The analysis uses SWOT, IFAS, EFAS and other similar evaluative tools to reach an understandable and valid generalization. SITUATION DEFINITON: • CURRENT PERFORMANCE Today Apple’s operations are as diversified as they were never before. With its currently 13,599 employees worldwide it generated revenue of $63 million in the last quarter. It holds cash reserves of over %4.5 billion and has a ROIC of 3.05%. Apple’s operations are spread around the PC industry, computer peripherals and the software and service industry. In the overall PC industry Apple’s market share has diminished to a skinny 2.1%. Apple itself doesn’t look itself at the overall PC market, as it has defined 4 specific markets on which it currently focuses on. The market shares in these sectors are to some extent more significant. In the peripherals sector (besides the iSight digital video camera and displays), Apple has been particularly successful through its innovative iPod (digital MP3 music player) as the market...
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...may fit. I will then use five financial ratios to analyze the past three years of the company’s financial data. Based on my review I will determine the risk level of the company indicating key strategies they may use in order to minimize the perceived risk. Finally, I will provide my recommendations of Apple Incorporation as a potential investment opportunity. Investing in Apple Incorporation Rationale for Investment Consideration of several factors is imperative while making investment decisions. An investor should evaluate the company’s growth potential before channeling their funds for investment (Brigham & Houston, 2011). Apple is renowned for its leadership in innovations. The company has revolutionized the technology industry through a remarkable change. The introduction of iPhones and the evolvement of the iPhones to the latest iPhone 6 and six plus is incredible. Innovation continues to take a lead in Apple Inc. With the introduction of Apple watch and Apple apps, there is a positive outlook for Apple stock for potential investors. The company has invested in a vertical acquisition to spur growth. For instance, Apple acquired Beats Electronics, which has gone a long way towards growing Apple’s business. There are higher prospects of future growth in Apple. Apple’s brand equity ensures high demand for its products. Most people have developed a strong appeal towards its products since they are aimed at transforming lives. Every product and service offered...
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...in its choices to over time, risk or indecision in its operations along with financial reports to show uncertain activities and risky, their non-price competitive strategies, regulations of the government that affect Apple’s operations, the increase including the decrease of its product cost over period of time including why they varies, the inputs utilized by the company’s challenges and production function to safeguard these inputs, analysis that Apple is one of those companies that you enjoy their products or you them, and the new products that Apple has presented into the markets. Many of this occurs because of their leadership along with attitude of the business in the past. At the current time Apple is quite successful they are on the top of their market, it’s very important for Apple remain to make great choices. Steve Jobs death along with having new senior managers currently making choices for the company means they are being looked at very closely this will create great rise and fall in the company. This company began in 1976, and then they unified as Apple Computer, Inc. in 1977. In January 2007 the expression “Computer” was disconnected from its original name, after opening of the IPhone it showed its move towards consumer electronics. In the market of electronics corporations Apple is the world’s largest along with ultimate profitable consumer following Samsung Electronics, and being the world huge mobile phone produced after Samsung and Nokia. In Fortune Magazine...
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...Apple took off after Wozniak’s Apple I adding numerous versions of the Apple, the Macintosh line, the iPod, iPhone, and iTunes products, and numerous other computer/software products to the Apple Computer, Inc. family. Apple has made its mark on the technology industry by continuing to be successful innovators that lead their numerous product markets. b. Identification of the Current Corporate Level Long-Term Strategies and Tactics ii. Apple has two major long-term strategies and tactics that they focus on. The first being strategic alliances that they have with IBM, Microsoft, and AT&T. The alliances they formed with IBM and Microsoft have enabled Apple to further their computer growth and guarantee software that is available and familiar to consumers all over the world. The alliance with AT&T was a recent alliance that was formed when Apple came out with their iPhone. Their contract with AT&T ends in 2010, and the phone world is anxiously waiting to see if they will continue this alliance or create a new one. The second strategy is concentration on internal growth which they are implementing by developing new...
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...sapient institute of management studies 2012 Project report on Marketing Mix of Apple Inc. Guided By:- Dr.Vishal Khasgiwala Submitted By:-Hussain RatlamWala Aziz RatlamWala Contents SL no. | Particulars | Page no. | 1 | Introduction of sector | 3 | 2 | Introduction of Company | 4 | 3 | Organization structure | 6 | 4 | The 4 p’s | 7 | 5 | Unique Selling Proposition | 10 | 6 | Comparative analysis | 10 | 7 | Recommendation | 14 | 8 | Conclusion | 16 | Page no (2 of16) IT Industry in India | | | | IT Industry in India comprises hardware, software, and ITES (Information Technology Enabled Services). As per McKinsey-NASSCOM report, India's annual revenue from the IT industry for 2008 has been projected at US $ 87 billion. This includes IT services, software products and services, IT enabled services and e-businesses. The distribution of US $ 87 billion has been worked out as: * IT Services generating a revenue of US $ 38.5 billion * Software products and services contributing with a revenue of US $ 19.5 billion * IT enabled services (ITES) generating a revenue of US $ 19 billion * E-business earning a revenue of US $ 10 billion * Other vital observations of the NASSCOM-McKinsey report about Indian IT industry are: * Of the total Indian exports, IT will constitute 35% * FDI (foreign direct investment) of almost US $ 5 billion will be attracted by the IT industry * Software and services...
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...12 Apple Inc. Strategy Review and Recommendation Group: E2 12 Apple Inc. Strategy Review and Recommendation Group: E2 Content 1. Company Background 4 2. Report Aim and Scope 4 3. Analysis of the Current Environment 5 3.1. PEST Analysis 5 3.2. Porter’s Five Forces 7 3.3. Resource Portfolio Analysis 8 3.4. Current SWOT Analysis 10 4. Analysis of the Future Environment via Scenario Planning 11 4.1. Impact of Scenarios on Apple’s Five Forces 12 4.2. Impact of Scenario Planning on Internal Environment (VRIN) 13 4.3. Future SWOT 15 5. Evaluation of Existing Strategies 16 6. Analysis of Apple’s Organizational Direction 16 7. Strategic Option Generation 18 7.1. Generic Strategy Model 18 7.2. BCG Matrix 19 7.3. Directional Policy Matrix 20 7.4. ANSOFF Matrix 21 7.5. TOWS 22 8. Strategy Evaluation through SAFe 23 8.1. Corporate Level Strategic Evaluation 23 8.2. Media Devices & Mobile Communications SBU Strategic Evaluation 24 8.3. Personal Computers Strategic Evaluation 24 8.4. Portable Media Players Strategic Evaluation 25 8.5. Software Strategic Evaluation 25 9. Comparison of New and Existing Strategies 25 10. Conclusion 26 11. Report Limitations 28 12. References 29 1. Company Background Apple Inc was founded in April 1976 by Steve Jobs and Steve Wozniak. The company that invented the first personal computer has diversified into designing and producing a vast range...
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...Porter’s Five Forces 17 3.3 The Implications for Strategic Development are; 21 4.0 QUESTION 3 21 4.1 Critical Analysis Lessons from Apple’s risky but profitable strategy 21 5.0 REFERENCE: 23 1.0 EXECUTIVE SUMMARY OF APPLE AND NOKIA CASE Apple chalked some initial success with its invention of the Macintosh (Mac) computer but with the introduction of the Windows 1.0 from its rival company (Microsoft), it was faced with a threat in the industry. Their earlier strategic decision of not cooperating with rivals in the industry was seen as a weakness which Microsoft capitalized on to make their software available to other computer manufacturers for a license fee. Apple, diversifying into a new market (mobile telephone industry) with the introduction of user friendly products sought industry cooperation when it came to the launch of subsequent products including the iPod and iPhone. This strategic decision was inspired by its past experience. The introduction of innovative products into the mobile phone industry threatened Nokia’s global dominance in the industry. In an attempt to maintain its competitive advantage, Nokia strategically introduced similar products to prevent its loyal customers from switching to Apple’s products. However, Apple continuously revised its strategies to gain competitive advantage by...
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...Assignment 3 1. Design a multifactor model with at least 2 factors besides the market factor, and answer the following questions. a) What makes your choice of factor a “factor” in multifactor model? b) Does the factor of your choice co-move with the market factor? If yes, should you include it along with the market factor? c) Describe how the stock return would be affected when the factor of your choice changes. d) Describe a scenario where one can benefit from trading on the factor of your choice. a) There is a variety of factors that can determine the returns on security. The market based factor is the return on the broad market index such as S&P 500. This market return is one of the factors in the model. Other factors include the following: • GDP growth rate. This factors shows overall macroeconomic conditions that tend to affect a stock’s performance. • Risk free rate of return. • 10 year T-bond interest rate that shows the required return on 10-year government bonds. • A company’s ROE as an indicator of its profitability. Therefore, the model will look like this: [pic], where betas show the sensitivity of return to the factor, rm is the market rate of return, rf is the risk-free rate, T-bond is the 10-year T-Bond rate and ROE is the return on equity (ROE). Generally, GDP has a positive effect on a stock return. Higher economic growth leads to more business opportunities...
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