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Transcript of Apple
US based company (HQ in Cupertino, California)
Currently has 72000 full time employees
The worlds most valuable company (Financial Times (08/10/12))
On 29/11/12 the company had 250 US stores and 140 international stores Apple Inc. Apple is committed to bringing the best personal computing experience to students, educators, creative professionals and consumers around the world through its innovative hardware, software and Internet offerings. Products:
iPhone®,iPad®, Mac®, iPod®, Apple TV®
iOS and OS X® operating systems, iCloud®, iWork, iLife PROBLEMS Hyper-competition:
similar product offering with a lower price Investment into R&D – attaining better manufacturing processes
Exploiting advantages of Apples supply chain
Investment into Apple's design process Competitors are increasingly using Apple as benchmark Microsoft launched its tablet in tandem with Windows 8.
Threat to Apple: Cannibalization of its sales in the personal computers and tablet markets. This has led to numerous public patent battles Portfolio Digital Content/ Applications:
iTunes Store®, App StoreSM, iBookstoreSM, and Mac App Store
Product & Support Services:
AppleCare Successful product offering: innovative technology with an elegant, modern design that is simple to use.
Continual investment in research and development. Marketing and advertising is critical to the development and sales of products. Target market: small and medium sized businesses education and governments customers individual consumers Steve Jobs passed away on October 5, 2011. New CEO - Tim Cook, with 14 years’ experience in the company Product/Service Offering Macintosh Competitors iPod iPhone iPad Operating System Toshiba, Dell, Lenovo, Acer, HP Samsung, Sandisk, Creative, Microsoft’s Zune, Jens of Sweden Blackberry, Nokia, Google, Motorola Amazon’s kindle, Dell, Motorola, Samsung Microsoft Windows, Google’s Android OS Lawsuits Average cost per patent case - $20 million Apple is failing to meet consumer DEMAND
Increasing number of substitutes provided by our competitors
For some customers the price point is too high in comparison to our competitors
Foreign demand: In China sales have tripled over the last year Therefore customers turn to competitors increasingly similar offerings SOLUTION
No short-term solution to this problem (increasing working hours conflicts with the CSR problems) CSR department
Supporting Causes (carbon emissions, global warming, technology impact on environment)
Designing new light-weight packaging = ? RECOMMENDATIONS In the first 5 years the iPhone made $150 billion in profits Patents
These cases can have a serious effect on Apple’s reputation, as if they are portrayed to be copying or stealing intellectual property from competitors, they are no longer viewed as innovators. Stock value has increased by 44.39% since August 2011. $100 million donated to charitable causes at the beginning of this year. APPLE REVENUE BY PRODUCT
To continue its long term investment into manufacturing partnerships, while simultaneously pushing for CSR policies
Continued investment in R&D
To pursue the unification of the mac operating system (os) and iOS, bridging the gap between personal computers and mobile devices Value Chain and Supply Chain Value Chain
Design - Internal
Procurement - External (Samsung)
Manufacturing - External (Foxconn)
Distribution and logistics (online and retail stores)
Marketing and Sales (Added value of a unique buying experience at retail stores) Supply Chain
Apple achieves a non-standard supply chain by virtue of its order size
Elpedia switch - $10 billion reduction in market value of Samsung
Apple doesn’t have to estimate demand but rather underestimate it filling up backlog orders to allow for manufacturing to catch up. iPhone 5 - £529 Nexus - £239 SOLUTION SOLUTION
Increased synergy between products: integration of 2 operating systems.
The portability and scalability is the key. Breaches on Apples' patented technologies. Apple’s recent success has caused competition to become more reactive (Eg. Samsung) SOLUTION:
To continue to patent Apple’s technologies and processes. Long-term investment in specific manufacturers.
This helps to build strong, credible relationships with manufacturers without having to manufacture the products themselves. Apple is currently doing this with Foxconn (already invested 10bn), but we suggest that Apple look to do the same with more of its manufacturers all over the world. Lack of CSR Policies
Bad publicity regarding hazard management practices, working conditions and carbon emissions.
Long working hours, suicides, staff quarters, under age workers. Samsung – leader in innovative eco-friendly products – by 2013 want all their products to exceed good eco-product criteria Staying Innovative
With the recent loss of Steve Jobs, there is a great concern that future products will not meet the expected criteria
Weakened Shareholders Confidence: share prices falling to 20% their value, biggest drop in recent history. Product Portfolio Through investing in the manufacturing outlets, Apple could pay more attention to working conditions in suppliers’ factories.
More frequent quality checks SOLUTION iPhone 4s very similar to iPhone 5 iPad - only 7 months between 3rd and 4th generation High market growth rate but a low market share at the moment. App and iTunes stores accounts for $1.9 billion of Apples annual revenue On the contrary, if others are seen as copying Apple, it helps strengthen their reputation as key innovators in the industry.