BUS 523 Final Project - Analysis of that company

• Write a 900 word paper on your analysis of that company (Due 1 Dec)

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The company to be analyzed is Apple Inc. It was founded by Steve Jobs and Steve Wozniak in 1976.

Apple Inc. is a recognized innovator in the information industry and leader in multimedia technologies, creates powerful solutions based on easy-to-use personal computers, servers, peripherals, software, personal digital assistants and Internet content. Headquartered in Cupertino, California, Apple develops, manufactures, licenses and markets solutions, products, technologies and services for business, education, consumer, entertainment, scientific  and engineering and government customers in more than 140 countries.

The main products are Mac, iPod, iPhone, iPad and iTunes. It is a publicly held company, the stock symbol is AAPL. Steve Jobs is the Chief Executive Officer, Peter Oppenheimer is the Senior Vice President and Chief Financial Officer, and Tim Cook is the Chief Operating Officer.

The Company competes in highly competitive global markets characterized by aggressive price cutting, with resulting downward pressure on gross margins, frequent introduction of new products, short product life cycles, evolving industry standards, continual improvement in product price/performance characteristics, rapid adoption of technological and product advancements by competitors, and price sensitivity on the part of consumers.

SWOT Analysis:

Strengths

·         Apple has been amongst the well reputed brands in the industry of information technology. It also stood up to its name by introducing new products such as iPod, iPad and laptops in the market to impress customers with its innovation, portable and attractive designs.

·         Apple computers are well know for its quality hardware and softwares.

·         iTunes Music Store is an excellent source of revenue, especially with the iPod and the accessibility on Windows platform.

·         Apple Computer are expert in Developing own software and hardware.

·         Apple’s niche audience provides the company with some lagging from the direct price competition.

·         Giving a face-lift to desktop and notebook lines.

·         Web technology can be used to improve product awareness and sales.

·         Low debt—more maneuverable.

·         Apple Computers have good brand loyalty.

·         Partnership with Intel Computers in 2006 – Present.

·         Strong Research & Development  Department.

Weaknesses

•           Most visible weakness of Apple is high prices of products. Apple has to do some work to reduce the prices.
•           Apple operating system support limited software which push the people to use Microsoft Windows to run different applications.
•          Limited hardware upgrading option in Apple laptops.
•           Weak relationship with Intel and Microsoft.
•           Weak presence in business arena.
•          The product life cycle of Apple products are very small for that reasons revenues are more depend on launch of new products and services.
•           Weak presence in markets other than education and publishing.
•           Slow turn around on high demand products.
•           Apples market share is far behind from major competitor Microsoft.
•           In past the relationship between Steve jobs and employee were not good which result in reputation loss.
•          There is pressure on Apple to increase the price of its music download file, from the music industry itself. Many of these companies make more money from iTunes than from their original CD sales. Apple has sold hundreds of millions songs through its iTunes music store. It accounts for 82% of all legally downloaded music in the US. But if it gives in to the music producers, it may be perceived as a commercial weakness.

Opportunities

·         Increase the support of applications.

·         Allows easy hardware and software upgrades in laptops.

·         Reduce the prices to increase market share.

·         Increase in worms and viruses on PCs so the antivirus solution can be developed by Apple

·         Large population (Gen X&Y) which are extremely individualistic and name brand conscious.
The ties of apple other companies are weak, Apple can develop good relationship for joint ventures

·         Downloadable music and MP3 players are highly marketable.

·         The online sales of computer are increasing with rapid speed.

·         The laptop market growth is high; Apple Computers should focus to develop new models to cater the need of customers.

·         Podcasts are downloadable radio shows that can be downloaded from the internet, and then played back on iPods and other MP3 devices at the convenience of the listener. The listener can subscribe to Podcasts for free, and ultimately revenue could be generated from paid for subscription or through revenue generated from sales of other downloads.

Threats

·         Companies not seeing Apple as compatible with their software.

·         Apple facing strong competition from Dell, HP, Sony and Toshiba in laptop segment.

·         Downloading free music from other online source without paying cost is common it may impact the iTunes sales.

·         Apple software, Cell phone and hardware are expensive as compared to other competitors such as Dell.

·         The long lasting recession may impact the sales of the company due to higher prices of the products and services

·         Microsoft launched Microsoft Vista, Windows 7 which is gaining market share.

·         The switching in technology is very fast.

·         Being successful attracts competition, and Apple works very hard on research and development and marketing in order to retain its competitive position.

From Apple’s recent (October 18, 2010) Fourth Quarter Results, the company posted record revenue of $20.34 billion and net quarterly profit of $4.31 billion, or $4.64 per diluted share. International sales accounted for 57% of the quarter’s revenue.

With the performance and strength of the business, it generated almost $5.6 billion cash flow from operations during the quarter.

References:  apple.com, mba-turorials.com, oppapers.com, alacra.com, scripting.com,marketingteacher.com.

BUS 523 Chapter 8 Reflection

Chap 8 Strategic Control and Restructuring

Write a reflection about something you found interesting and post your reflection to the forum.

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Strategic controls consist of systems to support managers in tracking process toward organizational goals and ensuring that organizational processes and the behavior of organizational members are consistent with those goals. There are three different types of control: feedback, concurrent, and feedforward.

Restructuring typically involves a renewed emphasis on the things an organization does well, combined with a variety of tactics to revitalize the organization and strengthen its competitive position. Popular restructuring tactics include refocusing corporate assets on distinctive competencies, retrenchment, and organizational changes. In some extreme cases, a firm may be forced to consider reorganization under Chapter X1 of the bankruptcy code, or a buyout. Organizations may use any one or a combination of these strategies in restructuring efforts. Strategic restructuring ranges from alliances like jointly managed programs and consolidated administrative functions to organizational integrations, like full-scale mergers.

BUS 523 Chapter 7 Reflection

Chap 7 Strategy Implementation

Write a reflection about something you found interesting and post your reflection to the forum.

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Once strategies have been agreed on, the next step is implementation; this is where most failures occur. It is not uncommon for strategic plans to be drawn up annually, and to have no impact on the organization as a whole.

Strategy implementation usually involves the introduction of change to an organization. Managers may spend a lot of time evaluating and selecting a strategy. Frequently this strategy is announced to the organization with the expectation that organization members will automatically see why it is the best one and will begin implementation immediately.  If a strategic change is poorly introduced, managers may actually spend more time implementing changes resulting from the new strategy than was spent in selecting it.  Strategy implementation involves both macro-organization issues, and micro- organizational issues. Macro-organizational issues are large-scale, system-wide issues that affect many people within the organization. Micro-organizational issues pertain to the behavior of individuals within the organization and how individuals in the larger organization will view strategy implementation.

BUS 523 Chapter 6 Reflection

Chap 6 Corporate Strategies

Write a reflection about something you found interesting and post your reflection to the forum.

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Corporate Level strategy is an action taken to gain a competitive advantage through the selection and management of a mix of business competing in several industries or product markets.

Corporate strategy is what makes the corporate whole add up to more than the sum of its business unit parts.

The three broad approaches to corporate strategy are single business/concentration, vertical integration and diversification, which is divided into two broad categories, related and unrelated.

Evidence shows that unrelated diversification is associated with higher levels of risk than other strategies. Unrelated diversification places significant demands on corporate –level executives due to increased complexity and technological changes across industries.  However, large company like GE performs well in this strategy as they have skills and resources  to help its businesses overcome problems of unrelated business areas.

BUS 523 Chapter 5 Reflection

Chap 5 Business-Level Strategies

Write a reflection about something you found interesting and post your reflection to the forum.

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This chapter dealt with business-level strategy, which defines an organization’s approach to competing in its chosen markets.

The competitive strategies discussed in this chapter are cost leadership, differentiation, and best cost. In differentiation strategies the emphasis is on creating value through sustainable uniqueness. Uniqueness can be achieved through product innovations, superior quality, and superior service, then sustained and leveraged through creative advertising, brand-building, and strong supply chain relationships. For a differentiation strategy to succeed, customers must be willing to pay more for the uniqueness of a product or service than the firm paid to create it. If the costs are too high relative to competitor, a firm may be able to recover enough of these additional costs through higher prices. The only way a differentiation strategy will work is if buyers value the uniqueness to pay a higher price for it. If a firm is successful at differentiation of its products or services, it will quickly become the target of the imitative efforts of competitors.

BUS 523 Chapter 4 Reflection

Chap 4 Strategic Direction

Write a reflection about something you found interesting and post your reflection to the forum.

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Strategic direction is defined in terms of a firm’s vision of where it is heading, the business in which it is involved, and its purpose. To set and define strategic direction: 1) describe the most critical issues facing your organization; 2) write a statement, which describes your organization’s core competencies; 3) describe what you see as the longer-term vision of what your organization can become; 4) write your organization’s existing mission statement; 5) possible changes in mission statement for the future; 6) revised mission statement (the purpose of the organization). For practical purposes, a firm’s vision is often embedded in its mission statement. 7) Developing / updating vision statement (depiction of future state of organization and customers). 8) Developing/updating values statement (overall priorities in how organization operates).

BUS 523 Chapter 3 Reflection

Chap 3 Organizational Resources and Competitive Advantage

Write a reflection about something you found interesting and post your reflection to the forum.

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Human resources hold excellent potential for sustainable competitive advantage. Possible sources of advantage include excellent human resources, superior top managers, or an excellent system of corporate governances. Managers serve as agents for the shareholders. When they act in their own interests at the expense of the shareholders, an agency problem exists.

Agency problems happen in large companies like Novell Inc., Exxon Mobile, IBM and Time Warner. CEOs’ high salaries reduce the amount of earnings available to the shareholders. CEO compensation packages for the large US companies typically reach into the millions of dollars annually. Since research and development expenditures reduce current earnings and often do not provide financial benefits for many years, CEOs who are compensated based on profitability levels have a built-in incentive not to approve research projects.  Bad performance CEOs tend to use ‘reorganization’ or ‘restructuring’ of the company to cut thousands of jobs to show the ‘earnings’ of the company and hence get a big bonus.  I think this is very immoral.