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APPLE CASE STUDY

An analysis of the case study Apple Inc., 2008.
by

Ronald Everson

on 20 February 2014

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Transcript of APPLE CASE STUDY

Brief History
Company Analysis
& Strategies
Financial Analysis
Action Plan
Agenda
Brief History
Company Analysis
Financial Analysis
Action Plan
Key Facts (Profits)

2013 Smartphone Profits
56% iPhone (more than all others combined)
53% Samsung (maker of high end Androids)
HTC, LG, Blackberry, & Motorola Lost Money

2013 Smartphone Apps Profits
Apple made over 50% of the profits on apps on 18% of Sales

Advertising Revenue
More people surf the web and make purchases on iPhone
More purchases than any other Smart Phone.
Apple Makes more off advertising Revenue than Android.

Financial Analysis

Forward Integration
Gaining ownership with increased control over distributors or retailers

Examples
Availability is limited (cannot buy Apple products everywhere)
Apple Retail Store, Apple Online Store, & Best Buy are some the only places to buy Apple laptops and computers
Many computer technicians solely work on PC’s; very few can fix Macs
Prices are higher than most, however consumers are still willing to pay more
Industry is continuously growing
Customers are always looking for better, faster, and smaller.










Analysis of Apple's Strategies

Market Penetration
Seeking increased market share for present products
Services in present markets through greater marketing efforts

Examples of Market Penetration
Seeking increased market share for present products or services in present markets through greater marketing efforts
Apple is always looking for ways to increase their presence and gain more customers.
Strategy to increase the number of customers was to start out with just AT&T and the Apple store selling their products
Gradually added Verizon, Sprint and lastly T-Mobile
Number 2 leader of smart phone sales behind Android
Still very dominate because of brand loyal with consumers










Analysis of Apple's Strategies

Apple went public on December 12, 1980
Apple started out with just personal computers
The first iPod was released in 2001
iTunes music store went online in 2003
The first Apple Retail store was opened on May 19, 2001 in Tyson’s Corner
iPhone was released in 2007
First iPad was released in 2010










History

History

iQuestions?
Apple Case Study


or, Possibly

Action Plan


Use Cash Position to Diversify Product Line

Wearable Technology
Watch
Glasses

Develop a Revolutionary Emerging Market Device
Easy to use
Reliable
Inexpensive
Internet Access
Communications

Action Plan

Review
Heavy Cash Position ($137b)
Market Share Flat (around 10%)
Stock Dropping Off Historic Highs
Lost Visionary Leader in 2011
Reputation and Business Strategy Built Around Innovation, Ease of Use, & Style


Action Plan

Review

Market Opportunities are in Immerging Markets
Lower price point consumer
Less concern for style
Skipping computers
Just officially entered China to underwhelming response
Difficulty making headway in India

Heavy Reliance on Two Products
Products are in Cash Cow Phase (BCG)
Need products in Stars or even Question
Mark phase

Action Plan

World Market Share

Financial Analysis

Research & Development

Financial Analysis
Cash Position ($137.1b)
More than all of HP’s Revenues for the year
More than Vietnam’s GDP

Cash Per Share $45.70

Financial Analysis

Product Development
Seeking increased sales by improving present products or services
Developing new ones
Forward integration which is gaining ownership
Increased control over distributors and retailers
Examples
Very successful products
The products sell out in days if not hours
Prices are higher than most
However, consumers are still willing to pay more
The computer, tablet, and smart phone market are very saturated
However, Apple is still the main competitor and the one to beat










Analysis of Apple's Strategies


Elon Musk (Tesla’s CEO)
Adrian Perica (Apple’s Chief of Mergers and Acquisitions)

Think Really Big!
iCar
Action Plan


Fill Visionary Void
Angela Ahrendts (CEO Burberry)
Sterling Record
Know as a Collaborator
Apple’s New Retail Chief

Don’t Be Afraid to Shake Things Up and Take Chances
Action Plan

Key Facts (Sales)
71% of Apple’s 2012 Revenues were from iPhone & iPad.

2013 Smartphone Sales
81% Androids
12.9% iPhones

2013 Smartphone Apps Downloaded
75% Android
18% Apple

Financial Analysis

Stock Price
EPS $40.23 Steve Jobs‘76 to ‘85 & ‘97 to ‘11




Financial Analysis




Founded on April 1, 1976
Headquartered at 1 Infinite Loop, Cupertino, CA
Founders were Steve Jobs, Steve Wozniak, & Ronald Wayne








Over 400 Retail Locations
Products include:
Mac, iPod, iPhone,Pad, iPad Mini, Apple TV, OS X, & iLife
Services include:
Apple Retail Store, Apple Store online
App Store, iBooks, & iCloud
Apple Case Study
Team Apple
Norris Henderson, Ronald Everson, & Larry Manning
Management Strategy
BSA 444
Dr. J. Scott Frampton
Workshop Six
February 20, 2014

NeXT
Apple, Inc.
Steve Jobs & Mike Markkula
Analysis of Apple's Strategies
Lack of price point range (low, medium, high)
Apple has mostly high price point products
Most products target high end consumers
Apple's strategy has been to innovate new products
Get to market first
Collect monopolistic profits (high, only product available
When copies catch up move onto another product
Recent roll out of iPhone 5c & 5s was an exception
Critics consider it a repackaged iPhone 4

Analysis of Apple's Strategies
Largest market growth is overseas
China & developing countries
Not ideal customer base for expensive product line
Recent iPhone roll out in China was underwhelming
New Apple stores in India has struggled

Analysis of Apple's Strategies
High dependence on a limited range of products
Mac-Is there market growth left?
iPod-Revolutionized MP3 players beginning in 2001
Foundation for the iPhone
Sales are flat and possibly dropping
iPhone benchmark phones
Lower cost copies are gaining ground
Jobs' vision to "reinvent the phone" 2007
iTunes locks in customers to Apple products
Competitors have lower cost alternatives
Visionary Void - Tim Cook is an influential business executive, not a creative genius
Full transcript