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Think DifferentlySteven Desteoglu

Business 497

Apple Inc


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Table of Contents

History.............................................................................3

Key Leaders....................................................................17

Tim Cook...............................................................18Scott Forstall..........................................................20

Jonathan Ive..........................................................21

Steve Jobs.............................................................22

Mission and Vision Statement

Mission Statement Analysis...................................24Vission Statement..................................................29

Organizational AssesmentIFE.........................................................................31

External Environmental Analysis

Porters 5 Forces.....................................................35

NACIS Code...........................................................37EFE.........................................................................38

Stakeholder AnalysisStakeholder Analysis...............................................42

Top 15 Stakeholders................................................44

Strategic Decision tools

Temporal SWOT.......................................................58

Performance Analysis

Financial Performance.............................................61

Appendixes

Appendix E..............................................................74

Works Cited........................................................................90


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History

Apple Inc. Is an American based company that operates out of Cupertino,

California where it all began. Apple Inc was originally named Apple Computers Inc by

two college drop outs, Steve Wozniak, 28 and Steve Jobs, 21. Their computer

partnership started in 1976 when they sold their most valued items, which included

calculators and a VW van so that they can raise enough money ($1300) to start a

company building computers. Their first orders came from a local retailer that order a

romping 50 computers, which didnt even include a power supply or a keyboard. The

duo built the computers computer in the garage of Steve Jobs mothers house (OGrady,

2008). During that same year they sold a total of 200 more to hobbyists in the San

Francisco area. They sold for a grand total of $666 each, ,which is over $2,000 today

(adjusted for inflation). Later that year, Wozniak started to develop the next computer

for apple.

While the Wozniak was designing the next computer for Apple, Jobs went on a

hiring spree, hiring local computer nuts to help build the circuit and mother boards for

the company. He also sought out retired electronic engineer, Mike Markkula, which

managed the marketing for Intel, to help Apple Computers to become a big company

( Linzmayer, 2004). Markkula ultimately paid $250,000 for 1/3 of the company and

helped Jobs with the companies business plan. Jobs hired Mike Scott as Apples

President, while Wozniak worked full time as an engineer. Jobs, recruiting of top


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executives didnt stop there. He landed the owner of one of the most successful firms for

advertising, Regis McKenna. Regis McKenna, was brought in to help devise an

advertising strategy for Apple. His first order of business was to to create the Apple

Logo and he began placing adds in consumer magazines for Apples computers

( Linzmayer, 2004). As a result of the hiring of McKenna, Apples annual sales reached

a cool $1 Million by placing the second generation of Apple computer, the Apple II into

retail stores. It wasnt what we think of a computer as of today. It had a television as the

screen, and it was the first microcomputer to use color graphics (Moritz, 2010). Since

the first Apple computer, Apple has been an innovator and it continued with the Apple II.

Wozniak, the brains behind a lot of the inventions coming out of Apple, invented the

Apple Disk II. The Apple Disk II allowed Apple to push the computers past the hobbyist

and on the consumer with the Apple Disk II allowing for programs to be produced for the

computers (Linzmayer, 2004).

The next year (1979), Apple introduced what was to be their 3rd generation of

computers, the Apple II+ which included a lot more memory in the computer, the

Silentype, Apples first printer, and an easier startup system. Later in 1979, the fist

microcomputer spread sheet, VisiCalc, was released and helped the Apple II+ sales

take off. Apples sales were up by 400% from the previous year with a sale of over 35,00

computers. Apple furthered their sales by introducing Fortran, a programming language

that allowed programers to create programs for Apples computers (OGrady, 2008).


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In December of 1980, Apple decided to go public and offer 4.6 million shares.

Each share sold for 22 dollars each and were sold out within minuets of the offering.

There was a second smaller offering of 2.6 million shares, but they also sold out quickly

in May of 1981 (OGrady, 2008).

In September of of 1980, Apple Computers released the fourth computer, the

Apple III. They released the computer without testing it adequately, so they had to halt

the production of the computer. The Apple III never really sold what it was suppose to

sell like and was over taken in the business sector by IBM ( Linzmayer, 2004). Ignoring

the problems that they had with the Apple III, Apple computers decided to continue on

by tripling the R&D budget. By tripling the budget to $21 million, it allowed them to open

offices in Europe, producing their first Hard Drive and releasing 40 new software

programs. By 1982 Apple had sold over 650,000 computers worldwide and in

December of 82, reached $1 billion in sales. The first personal computer company to do

so (Hogan, 1987).

1983 was a big year in Apples history. It wasnt a very positive year to say the

least. Apple, lost its spot as the top personal computer supplier in Europe to IBM

because their latest computer names LISA was a big flop. Apple tried to challenge to

IBM in the business sector, by introducing the mouse and pointer system that displayed

pictures instead of using a keyboard to enter commands. The problem that apple had

with this was that they had a tough time figuring out how to link the computer together


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(Hogan, 1987). These different innovations came out of Jobs vision to have one

computer that everyone (businesses, and personal users) can use. In 1983, Apples

stock plummeted to half of its 1982 sells to $35 per share. Jobs also replaced Markkula

as president of Apple with former Pepsi-Cola present John Sculley (OGrady, 2008).

1984 saw the debut of the Macintosh computer, which was Apples first true

personal computer. It offered all the innovations of the LISA, but just a portion of the

price tag that the LISA carried. This is the first computer that was specifically designed

for someone that had very little technical know how. Apple sold more than 70,000 of

these Macintosh computers within the first 100 days. This was also the first Apple

computer that was launched with a television commercial (Hogan, 1987). This is one of

the most famous commercials in history. It aired during the 1984 Superbowl and is the

commercial that has the athlete running toward the big screen of the guy talking with a

hammer in her hand. She stops and swings the hammer and breaks the screen. The

people walking are like the drones that the PC market has created and the athlete is

suppose to represent Apple as this new competitor and will break the mold with new

innovative things. However, with a favorable start the computer fell off and the internal

issues of Apple, continued and eventually came to a boiling point. Jobs, which is the guy

that brought Sculley in, decided that it was time for him to go, so he tried to oust Sculley,

but he eventually lost the perusing battle and with Scully reorganizing Apple in 1985,

Jobs and several other executives left Apple to form the computer Company NeXT

(Mortiz, 2010).


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In 1988, Apple severely mismanaged their inventory of chips. With the shortage

of memory getting worse, Apple purchased a huge supply of it, but the shortage ended

and they were faced with all these memory chips at a high price, so they sold their

machines for a higher price, but costumers were more inclined to purchase the lower

models or competing companies computers (Funding Universe, 2011). Apple also

produced software that allowed Mac based computers connect to the IBM based

computers. It was grew VERY fast. Apple had over 14,600 employees, $4.07 Billion in

profits, where $400 Million was from sales.

In 1988 Apple was reorganized, into four different divisions including, Apple USA,

Apple Europe, Apple Pacific, and Apple Products. Many executives didnt like this

divisions so they left. Sculley believed that this was good for the company because it

allowed for more creative innovation throughout the company (Funding Universe, 2011).

This division has allowed apple to become a larger supplier of computers and devices to

the education field and the personal consumer, which at the time and currently is the

fastest growing industry in the the United States and some would argue the world.

Decline in Apple

The early to mid 1990s saw the decline in Apple as a industry giant and as a

inovative company. Apple was soaring high after the success that they had in the


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1980s with their products of Macintosh computers. Apple had relied on their large

computers that had user friendly graphics, but as the competition figured this out, Apple

had to act fast. Apple saw their profit margins sinking with their high cost of

manufacturing. Apple, in 1991 laid off nearly ten percent of their staff, moved their

plants in cheaper areas, consolidated plants, and they also altered the organizational

charts dramatically (Apple Museum, 2010). Looking for new frontiers to move into,

Apple released their first laptop, the PowerBook, in 1991.

Apple saw one CEO after another in the 1990s fail miserable with many of the

products that apple produced. Apples CEO Michael Spindler, broke Apples tradition of

selling its own products, by licensing them to outside companies, which eventually tore

into their profit margins (Apple Museum, 2010). Spindler also watched over the Power

Macintosh in 1994. Apples Power Macintosh was huge success, but when they

underestimated the amount that they needed, Apple fell 1 Billion dollars behind in

orders, which the board of directors didnt like and within a 2 day period the Stock

Dropped to 15% in 1995.

Which the gigantic mishap that Spindler had in 1995 with the Power Macintosh,

Apples board of directors decided to replace Spindler with Gil Amelio. Amelio was

suppose to be able to take Apple to the next level with his talents. But, just like Spindler,

Amelio couldnt. He cut apples payroll by 1/3, and slashed Apples cost of operation

(Apple Museum, 2010). The issue was that he failed to align himself with the vision of


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the company and comtinued to mount Apples losses with $816 million in 1996 and $1

billion in 1997. The Stock for Apple, which once valued at a staggering $70 per share,

now was traded for a mire $14 per share (Apple Museum, 2010)

Rise of the iDevice

1997 marked the worst years the Apple has ever seen. When Apple had its first

IPO, it was valued at $22 per share, now as Apple is valued at $14 a share the board

was looking for a drastic overhaul. Apple, bought Steves Jobs company NeXT for $377

million, which had sales of only $50 million. Jobs, was hired to be the special advisor to

the CEO, but only 2 months after Amelios exit from Apple, Jobs was named CEO of the

Company. Jobs, began a total overhaul of the company. He eliminated all but 4 of the

companies products, with marked the end of Apples involvement in printers, scanners,

PDAs and other products (Mortiz, 2010). Jobs then began laying off thousands of Apple

employees, sold stock to his rival competition, Microsoft Corporation, closed many of

their plants and ended license agreements with companies to make clone products. All

this amounted a $150 Million in cash infusion (Apple Museum, 2010).

In November of 1997 Apple launched the Apple Store which allowed people to

buy products from apple online. Apples organizational hierarchy underwent a massive

reorganization. The biggest indication of jobs return to the company came in the year

1998. Jobs, frustrated with Apples lack of interest in their computers that retailed for

under $2,000, decided to tap every available resource that Apple had at their disposal

and introduced a sleek, completely redesigned computer. The iMac, which had Apples


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vision, skill and creativity put into a colorful computer proved to the begining of the

irevolution (Apple Museum, 2010). This computer proved to be the turn around that

Apple had been looking for. Riding the back of Steve Jobs, Apple once again became a

profitable company. Apple was also looking to develop new software for Mac based

computers, purchasing Final Cut from Macromedia. Jobs, enlisted help form many

designers including one that led to many of Apples designs. Jonathan Ive, was Jobs

best designer with led to the designs of the iPod and iPhone.

Apple produced two new video editing softwares including final cut pro and

iMovie. Over the next coupe of years Apple worked on its software development over

everything else. Apple wanted to develop a core of software items. Apple developed,

what they hope would rival Microsofts Windows operating system. In March of 2001,

Apple releases its major operating system in years, Mac OS X. It was based on jobs

NeXT OPENSTEP and Unix. Jobs and Apple had wanted to create a operating that

could be used by professionals as well as just the normal consumer. One that had the

ease of use of previous operating systems, but had the security, reliability and stability of

the Unix system. The operating also was backwards compatible with Mac OS 9, in

terms of software use (Apple Museum, 2010).

Just two short months later, Apple did something that none of its competitors had

done. They opened two retail stores that sold ONLY Apple products. This had not yet

been done by any of Apples major competitors. Apple, bought Spruce Technologies,


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which was a DVD Authoring company in July of 2001. Later on in 2001 Apple ventured

outside of the world of computers. Jobs, saw this potential for what the future holds.

Jobs began creating a device that can hold music, but you can also bring it with you.

Apple announced in October of 2001, the creation of the 1st iPod. This was, up until

that date, the most innovative device to roll off Apples shelfs, selling over $100 Million in

the first 6 years of existence.

Beginning in 2001, Apple progressively abandoned the use of translucent colored

plastic that was used int the iMac G3 series. They started by using titanium for the

PowerBook, then a white polycarbonate iBook and finally ending with the flat-panel

iMac. Also, beginning in 2001, Jobs and Apple decided that they needed someway of

getting music to a person. And in 2003, they rolled out the Apple iTunes Store. The

store, which is similar to the Apple Store, sold music for 99 cents per download. It also

integrated the use of the iPod with iTunes for managing your music. This was a huge

success and continues to be. On February 24th 2010 Apples iTune Store hit its 10

billionth download, making it the largest digital store ever (Apple Museum 2010).

Apple made a huge move on June 6, 2005 announcing that Apple had decided to

start building computers that would have intel core duo processors. Why was this

significant? Its because intel computers are faster and better, especially for streaming

music, watching video and multitasking. Apple also announced that it had developed the

program, Boot Camp, which allowed Microsoft Windows to ran next to Mac OS X. Apple

also surpassed Dell in market cap, which evidentially Dells CEO said that he would just


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sell the company and pay out to stock holders, just nine years earlier (Hesseldahl, April

2006). Because of all the success Apple was seeing, they saw a tenfold rise in their

stocks.

MacWorld 2007, would prove to change the Smart Phone world. In January 2007,

Apple held their annual event, MacWorld. This would show case their new products that

they had developed. Well, on January 9, 2007 Apple CEO Steve Jobs announced that

Apple Computers will be known as Apple Inc, because they had shifted their emphasis

from computers. During the Keynote Jobs, wearing his famous black shirt and jeans,

announced that they had created a wide screen, iPod, a Phone and a internet

communication device. He then went on to say that they werent 3 separate devices,

but one called the iPhone. This device revolutionized the smart phone market. The tag

line for this was that Apple has reinvented the phone (Steve Jobs, 2007).

The iPhone helped Apples stocks skyrocket, as well as Apples sales. Apple

Launched the iTunes App Store in July of 2008, which sold applications for the iPhone

and iPod touch. Within the first month, the store had sold over 60 million applications

and were brining in $1 million daily (Flandez, August 2008). In October of 2008, Apple

became the third largest mobile phone supplier in the world. In December, Apple

announced that they will not be attending the MacWorld Conference after 2009 after 20

years of doing so. They instead created a World Wide Developers Conference that

show cased Apple products.


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On January 14th, 2009 Steve Jobs announced that he will be taking a medical

leave of absence until the end of June. 6 months, due to his health concerns. He stated

that it would allow Apple to focus on its product development more without the

interruption of constant questions about Jobs health and allowed Jobs to focus on his

health. The interim CEO of Apple was Tim Cook (Apple.com, 2011).

Apple focused on refreshing their product line every year. Every year brought

something new to the stage, whether it be a refreshed MacBook, iPod, or iPhone they

refreshed them all. On January 27, 2010 Apple propelled them selves into a whole new

product line or market the tablet device (Apple.com, 2011).

The tablet device wasnt something that a new thought. Microsoft tried to

introduce a tablet pc device in 2001, which wasnt taken over so well, and linux

introduced tg Nokia N800, which ran windows 98, but never made a splash, ad during

the 2007 MacWorld, Axioron introduced the Modbook, which was a modified MacBook,

but the wasnt successful (Apple Inc., Press release, 2010).

Apple, started the Keynote on that day saying that they are the largest mobile

device company, bigger than Nokia, Samsung and Sony. They started off by showing

that they are a mobile device company with their iPhone, iPod and MacBook laptops.


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They showed how everyone uses a smart phone and a laptop. They ask the question is

there room for a 3 device in the middle? Jobs then said that the device would have to be

better than both in Browsing the web, writing emails, photos, video, music, games and

eBooks. Jobs, says that people think that its a netbook, but he says that its not better

than anything. Jobs, then says that they developed something better. He then introduces

the iPad (Keynote, January 27, 2010).

Apples iPad revolutionized a new category just like the iPhone did in 2007. Apple

introduced this device that allowed you carry it easily around with you, read your books,

watch movies and play games on. It sold over 500,000 in the US in the first week alone.

That was an astronomical figure to reach (Apple Inc, press release, 4/2010).

In May of 2010, Apples market cap eclipsed that of its competitor Microsoft for

the 1st time since 1989. In June of 2010, Apple released the 4th generation of iPhones.

It featured video calling, multitasking and a stainless steel design. Later that year

Apples exclusive contract with AT&T ran out and they began selling the iPhone 4 on

Verizons cell service. iPhone 4 is on sale in 88 different countries (Zayawa iPhone 4,

June 12, 2010).

In June of 2011, Apple revealed a new storage system with is called iCloud. It

allows you to store you music, documents and files in what they call the cloud-Apple.

This allows the user to retrieve their files from anywhere in the world, on any mobile or


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stationary device. They also announced their worlds most advanced operating system,

the Mac OS X Lion. This is seen to be the most advanced system by any operator

manufacture. Upon the 1st day of release, the OS was downloaded 1 million times.

Apple only released it through its Mac App Store, created in 2010. (Apple Inc. 2011).

The biggest news with Apple recently is the resignation of their Founder and

CEO, Steve Jobs. In a letter to the board on August 24, 2011 Jobs announced his

resignation from the position of CEO and asked to kept on as the director of the board.

He also recommended that Tim Cook, the companies COO, be named CEO of the

company, and the board accepted his recommendation and him as the director of the

board (Apple press release, August 24, 2011).

Apple has also grown exponentially since the time of Steve Jobs and Steve

Wozniak, building computers in Jobs garage. As of September 25, 2010 Apple Inc.,

employs 46,600 Full-time equivalent employees and an additional 2,800 full-time

equivalent temporary employees and contractors (Apple Inc. Annual report, 2010). This

include operating segments in the Americas, Europe, Japan and Asia-Pacific (Apple Inc.

Annual report, 2010). Apple currently has 345 retail stores world wide in 11 different

countries.


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Apple Has been at the for-front of the technology revolution. They have

revolutionized the way we use technology in our everyday lives. Apple is the worlds

biggest company and will stay that way for a long time.


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key leaders

Every company has those leaders that are above the rest and without them may

not be where they are today. Apple is one of those companies. Apple has had a their

share of CEO's and executives that they may or may not be proud of, as well as

employees. There are just a few people that influence Apple and the direction that they

are headed. These key leaders are the most influential people at Apple and will be

influential Apple for a long time coming. The key leaders for the company include

current CEO Tim Cook, current Senior Vice President of iOS Software Scott Forstall,

current Senior Vice President of Industrial Design Jonathan Ive, and finally former CEO

and current Chairman of the Board Steve Jobs.

Each of these men have their own importance to Apple and has had/haves a

huge hand in the way that the company is headed. These men are the top, most

important executives of the company.


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Tim Cook

Tim Cook became Apple's CEO on August 24 2011 when the former CEO, Steve

Jobs sent his letter of resignation to Apple. Cook has been the interim CEO of Apple on

two separate occasions when Jobs took medical leaves of absences, then most recent

being from January to June of 2011 (Gadget lab, 2011).

Cook has been seen as the man that is in charge at Apple. Tim Cook was hired

by Apple company in 1998 as the senior vice president of operations and was quickly

promoted in 2002 to world wide sales. Before coming to Apple, he was responsible for

managing Compaqs entire product inventory. Cook has helped perfect Apple's

inventory management. Apple, which will regularly launch big new products, has few of

the old products left in inventory at the end of their cycle. It has helped the the company

avoid having to discount the old ones in order to get them off their shelves (Gadget lab

2011).

Almost from the very first time that Cook turned up at Apple, he knew he had to

stop Apple from manufacturing its own products. Cook established relationships with

companies to manufacture Apples products and he closed all of Apples plants and

warehouses all around the world. Because of this, Apple's inventory, which is measured

by the time that was on Apples balance sheet quickly fell from months to days (Gadget

lab 2011).


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Tim Cook has made a huge contribution to Apple by doing this. It allows the

company to show a greater margin because the product isnt sitting on the shelves for

as long. You can think of it this way; A company has two main ways to create profit

margin. The first is to charge a high price for their product (which Apple does). The

second is by reducing their costs, which is what Cook did when he arrived at Apple

(Lashinsky, 2008).


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Scott Forstall

Who is Scott Forstall and why hasnt anyone really heard his name before? Well

it is because Scott is the Senior Vice President of iOS Software, meaning is he the man

behind the software that runs on every Mac, iPod, iPhone and iPad. He is extremely

important to the company and is one of the people that has helped Apple pull its self

out of the trenches (Caulfield, 2010).

Scott is the man that redesigned the operating system for mac, the OS X. He was

one of the engineers who followed jobs from NeXT computers. He leads the team that

has creatively come up with the user interface for the iPhone, iPod and iPad. This along

with his most notable recent release of the Mac OS X Lion, has proven that he is a

software genius and will continue to push the company in the right direction (Caulfield

2010).

Due to Apple Company culture of secrecy there isnt much on Scott Forstall.


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Jonathan Ive

Jonathan Ive is a british poly technical school graduate that went on to be the

design genius behind Apple's products (Waugh 2011). Fourteen years ago, Apple irked

Ive to start designing the next iMac. This would be Ive's first creation at Apple so he

wanted to make a splash. Ive went to a candy factory to watch the process of candy

making and to get inspiration for the color scheme of Apple's iMac that jobs wanted. Ive

chose colors that would let the consumer know that the iMac wasn't just for business but

also for fun (Waugh 2011).

Jonathan Ive was recruited to work at Apple in 1994. At that time he was working

out of a basement office producing a lot of prototypes. His prototypes weren't really met

with a warm reception and none of them were really built (Waugh 2011). Ive was ready

to pack it up and move back to England when in 1997 Steve Jobs came to town and

decided to tear down a lot of the product lines that they had and move Ive's office into


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the main building and beefing up the security that they had so that leaks wouldn't get

out. Ive was created is credited with the success of Apple from the design stand point.

Ive is credited with designing all Apple's current devices. Ive has designed all of

the current iMacs, as well as all iPhone, iPad, iPod and laptop models (Waugh 2011).

Ive has driven Apple's creations to a whole new level and has made Apple's products

the most iconic products in the world.

Steve Jobs

Finally the man that has been the driving force and visionary of Apple for the past

14 years, Steve Jobs. Jobs has been the man that has brought Apple back to glory

since his return in 1997.

In 1976 with nothing more than his friend Steve Wozniak and a garage he started

building the first Apple Computer. In 1985, with a depute with the executives of the

Apple, Jobs ended up leaving the company and starting NeXT computers.

NeXT Computers were only a brief stopping point for Jobs. Jobs, in 1997 sold

NeXT computers and its technologies to Apple and Jobs was brought back into the

Apple mix. Later in 1997 Jobs was named intern CEO and started to take to company to

heights that it wouldnt even been able to imagine. Jobs immediately redid the entire

company from top to bottom and got rid of 15 of the 19 product lines and began to think


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Mission and Vision Statement

Mission Statement

A companys mission statement defines who the company is and what it is that

they do. A companys mission statement is about who that they are now, not where they

are going. A mission statement helps a company become more successful, actually a

company with an operational mission statement is 30 % more likely to succeed (Finn,

2011).

According to David, some 90% of all companies have used a mission statement

over the past five years. This is an outstanding number of companies that are finally

catching on. According to David there are several things that effective missions

statements are. A few of them are that they are broad in scope, they arent excessively

specific, they reconcile the interests among the stakeholders, they motivate readers to

action, they arouse positive feelings and emotions, they reflect judgements, they are

dynamic in orientation, and a basis for generating & screening strategic options (David

2009).

According to David, mission statements vary in content, format, length, and

specificity. David has 9 essential components to it. They are;

1. Customer

Who are the firms customers?

2. Products or services

What firms major products or services?


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3. Markets

Geographically, where does the firm compete?

4. Technology

Is the firm technologically current?

5. Survival, growth and profitability

Is the firms committed to growth financial soundness

6. Philosophy

What are the basic beliefs, values, aspirations and ethical priorities of the

firm

7. Self-concept

What is the firms distinctive competences or competitive advantage

8. Concern for public image

Is the firm responsive to social, community and environmental concerns?

9. Concern for Employees

Are employees a valuable asset of the firm?

These nine components put together make up what a great mission statement.

Apple Inc, is no different from any other company out there. They know that it is very

important to have a mission statement. According to Apples website their mission

statement is as follows;

Apple designs Macs, the best personal computers in the world, along with OS X,

iLife, iWork, and professional software. Apple leads the digital music revolution with


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its iPods and iTunes online store. Apple reinvented the mobile phone with its

revolutionary iPhone and App Store, and has recently introduced its magical iPad

which is defining the future of mobile media and computing devices.

The chart below shows the nine components that David states along with if Apple

incorporates that in their mission statement.

Component Apple Inc. Mission Statement Piece

Customer Apple designs Macs, the best personal computers in

the world,

Products or Services iPods, iTunes, OS X, iLife, iWorks, professionalsoftware, iPhone, AppStore, iPad

Markets Apple designs Macs, the best personal computers inthe world

Technology Apple reinvented the mobile phone

Survival , growth profitability Has recently introduced its magical iPad which is

defining the future of mobile media and computingdevices

Self Concept

Concern for public Image

Concern for Employees

Philosophy Recently introduced its magical iPad which isdefining the future of mobile media and computing

devices.

As you can see even though Apple is the top company in the industry, they dont

have all 9 components of a good mission statement. I propose the following as a

mission statement.


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Apple Inc is devoted to being the best in the mobile computing business, while

upholding the highest standards of integrity. Apple plans on doing this by using

our innovative mobile device, such as our iPod, iPhone, and iPad, iTunes, App

Store as well as our line of personal computers, professional and creative

software to deliver the best possible products to our customers world wide.

Apple is also committed to distributing these products with care for our

employees, environment and keeping Apple as the number one company in

mobile devices.

It covers all 9 of the basic elements of the mission statement as laid out by David.

Finns 3 Questions

In addition to Davids nine criteria Dr. Finn has his 3 additional questions that

should be asked. They are essential to what a mission statement is and to see if its a

true driving document (Finn 2011).

1. Does a Mission Statement Exist?

Yes and no. They have something like it, but its more of a value

statement compared to a true mission statement.

2. Do the People working at Apple know the mission statement?

Yes they do. I personally went into the Apple Store and asked

them and multiple employees told me that they had the mission

hanging in the back.


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3. Can you see the mission?

Yes, you can see what they have as a mission statement being

implemented at the stores and in the company. They do have

the most innovative products and they are at the forefront of the

technical revolution.

These three questions allow the company to view their mission statement and

move in the right direction. As shown in David and as told by Dr. Finn, a company that

has a operational mission statement is 30 % more likely to succeed.


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Internal Factor Evaluation

An internal factor evaluation or IFE is considered to be one of the strategic

management tools for auditing the companies major strengths and weaknesses in the

businesses functional areas (Maxi-pedia, IFE Matrix). The IFE shows us what is

identified as our internal strengths and weaknesses and then we give it a weight to show

how important it is to our business. They rang for our major weakness (1) to our major

strength (4). After each strength and weakness is given a score then we multiply the

score by the weight and then add all of the weighted score together and come out with

one total weighted score (Maxi-pedi IFE Matrix).

Apple Inc, even though one of the biggest and most successful companies

around, arent adverse to having to deal with some weaknesses that they might have,

and they have them, every company does.


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Key Internal Factors Weight Rating Weighted Score

Strengths

1) Brand Name 0.12 4

2) Low debt 0.12 4

3) Growing device Sales 0.10 4

4) Niche Audience 0.07 3

5) Increase of Retail Stores 0.09 3

6) iTunes/ App Store 0.08 3

7) Developing Software/ NewTechnology

0.05 4

Weaknesses

1) Legal Proceedings 0.06 2

2) High price for products 0.06 23) Losing Prototypes 0.09 3

4) Slow initial turnaround 0.05 3

5) Lack of presence in Business field 0.06 1

6) Certain Software not Compatible 0.05 4

Total

Strengths

Apple has made their money off being the best and making their brand name.

Their brand image is one of their major strengths that Apple has. It has become a

recognizable symbol across the globe. Another one of their strengths is that they have

a low debt being carried. They dont own manufacturing plants, or anything that is

related to manufacturing. They own their campuss across the globe. They have a large

cash on hand and able to pay for everything straight out with their cash. Their devices

are top of the line. There isnt a company that compares to them in the device. Their

iPad continues to out sell any other tablet device on the market. Apples iPhone and

iPod are the leading the industry in their respective categories.


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Apple has had the uncanny ability to produce the software that meet the need of

their target audience. They have produced a lot of the needed software that people

would use on their machines. They have been able to create software that customers

that use a windows pc are able to migrate their files and their programs. Apple has the

iTunes and App Store which is very important to their lively hood, because they are able

to make a lot of money off that store.

Weaknesses

One of their biggest weaknesses has came in recent years. Their biggest

weakness in recent years has been them losing their prototype iPhones. They have lost

3 prototypes in the past 2 years at bars in california. They have been dropped or left by

people testing these phones outside of the Apple Campus. This is a big issue for Apple

because apart of their lore is their new phones and updated devices and if they are

letting them out of their sight, people all around the world will lose interest.

Another issue that they have dealt with in recent years is the capability of certain

software not being compatible with their computers. They have created this program

called boot camp that allows windows to be ran next to the Mac OS X on the Apple

computer.

Apple is also tied up in a bunch of legal proceeding but that is to be expected

from such a large company. Most recent is Apple vs. Samsung in the EU, and Australia.

Apple claims that Samsung has infringed on their patents and has had a judge block all

of Samsung Smart Phones and Tablets from being sold in the EU and in Australia.


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Apple has been dealing with their weaknesses and have been implementing

measures to make sure that they are dealt with. They have also been playing off their

strengths to create this culture to Apple that has almost become a cult. I would suggest

that Apple continues to implement the measures needed to make their strengths

stronger and weaknesses a strength.


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Porters 5 Forces

Porters five forces is a model that discusses a focus on the external environment

the company has to be able to cope with in their ability to plan for the future. Apple Incs

industry is really undefinable. They used to be in only the computer industry but as we

all can now tell, they are more of a mobile device company. Yes, they still make the

personal computer but their bread and butter are their mobile device division. It is

necessary for us to do a five forces analysis for all of their divisions and not just Apple

as a whole. Below is Porters Generic five forces model;


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The five forces are as follows

1. Threat of new Entrants

Development Channels

Government Regulation

Patnets

Assets

Purchasing economies of scale

Competitor Retaliation

2. Bargaining power of suppliers

Is there a huge cost to switch suppliers

The power of suppliers tends to be the inverse of the buyers power

The brand name of the supplier is powerful

Does suppliers want to enter your market

Fragmented customer

3. Bargaining power of buyers

There are few buyers that have significant market share

Buyers buy most of the distribution

Buyers want to buy your competitors

4. Threat of substitute products or services

A substitute product is available for the consumer

5. Rivalry among existing firms


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Reduced prices among competitors

Increased advertising

Product differential

These are the five forces that influence the way or direction that the company is going.

The easiest way to show the five forces model is put it into a chart as shown below;


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Personal Computer Music Players Mobile devices

Threat ofEntry

Low

- The cost of R&D is veryhigh

- Product Differentiation:Apple Computers run on

their own OS and theyare unique to their own

- Cost Advantage: Highdemand at the collegelevel as well by the art,music and educationsectors

Low

- Product Differentiation: iPod andiPhone has its own music store, iTuneswhich allows customers downloadmusic conveniently.

- Cost Advantage: High demand inproprietary technology. Apple hasseveral patents for iPod.

Low

- High R&D

- Product Differentiation:iPhone and iPad have add-on functions with

technology from their ownPC and MP3 player

.- Cost Advantage

Threat of

Rivalry

Low

- There are relatively fewcompeting firms

compared to a lot ofother industries, andhappy has the mostMarket Cap.

- Lower priced PC makerslike Dell has been barelyfloating

Moderate

- There are various competing firmssuch as Samsung, Sony, i-River, etc., but

iPod has almost 80% of the marketshare.- But if it does not keep the productsinnovative, the other companysproducts which are lower in price thaniPod can be a significant threat inanytime.

Moderate

- There are a high number offirms getting into the

business, but as seen with therecent failure of HPs touchpad, Apple is highly ahead ofthe pack

Threat ofSubstitutes

Moderate

- Many companiesincluding Apple have

came out with tablets,which can replace acomputer

Moderate

- The substitutes for MP3 player can bea CD player, MD player, radio, etc.; but

cheaper and easier access to MP3 fileshas been making customers leave fromthe other music players.

Low

- Mobile phones can besubstituted by home phones,

internet messengers, etc., butthe main convenience ofmobile phones which is theportability cannot be easilysubstituted.


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Threat of

Suppliers

Moderate

- The major suppliers arehighly proprietary intechnology and has the

power to impact price

High

- The suppliers for raw materials andlabor can be the threat, but the supplierwho holds the main profitability is the

song writers, singers and players.- Another big threat is the illegal freemusic download websites or P2P file-sharing sources. Easy and cheap accessto MP3 files can encourage the MP3player market, but on the other hand,this can be the threat to iTunes.

Low

- Todays phone has a lot offunctions in addition tocalling/receiving

- Apple which is already inthe industry of PC and MP3mostly deals with internalmediates and suppliers.

Threat ofbuyers

Moderate

- The number of buyers ishuge and growing as newtechnologies are

introduced at a fast pace.-Apple has made themselfs different by creatingtheir own operatingsystem.

Low

- The number of buyers is continuallyincreasing and they keep demandingnew andupdated products.

- iPod has relatively loyal customers.

Low

- The number of buyers iseven bigger than the PCs.Also the buyers keepincreasing with the newmarket of other developingcountries.

Apple is in the position to be the leader in everything that it does. Apple currently

leads the industry in market cap among its competitors. Apple has a reputation that is

unmatched by anyone and anything. According to the Porters five forces analysis the

highest level of threat is in the personal computer division, because Apple is more

focused on the mobil aspect of it, compared to being chained up to your computer at

home. Yes, there are lower cost computers out there but Apple has a following that is

unmatched by any company. I am one of those people and I wont buy a windows based

pc anymore, as well as a lot of my friends.

Apple is very smart in their profitability and the way that they handle the devices

and new innovations. Apple has made it clear that they are on the forefront of

technology and that they arent going anywhere.


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NAICS Codes

334111 - Electronic Computer Manufacturing

334119 - Other Computer Peripheral Equipment Manufacturing

511210 - Software Publishers
http://galenet.galegroup.com.ezproxy.strose.edu/servlet/BCRC?vrsn=unknown&locID=nysl_ca_csr&srchtp=glbc&cc=1&iType=naics&ste=82&mode=i&tab=256&tbst=tsIS&cind=334111+-+Electronic+Computer+Manufacturing&ccmp=Apple+Inc.&mst=Apple&n=25&bConts=13247http://galenet.galegroup.com.ezproxy.strose.edu/servlet/BCRC?vrsn=unknown&locID=nysl_ca_csr&srchtp=glbc&cc=1&iType=naics&ste=82&mode=i&tab=256&tbst=tsIS&cind=334119+-+Other+Computer+Peripheral+Equipment+Manufacturing&ccmp=Apple+Inc.&mst=Apple&n=25&bConts=13247http://galenet.galegroup.com.ezproxy.strose.edu/servlet/BCRC?vrsn=unknown&locID=nysl_ca_csr&srchtp=glbc&cc=1&iType=naics&ste=82&mode=i&tab=256&tbst=tsIS&cind=511210+-+Software+Publishers&ccmp=Apple+Inc.&mst=Apple&n=25&bConts=13247http://galenet.galegroup.com.ezproxy.strose.edu/servlet/BCRC?vrsn=unknown&locID=nysl_ca_csr&srchtp=glbc&cc=1&iType=naics&ste=82&mode=i&tab=256&tbst=tsIS&cind=334119+-+Other+Computer+Peripheral+Equipment+Manufacturing&ccmp=Apple+Inc.&mst=Apple&n=25&bConts=13247http://galenet.galegroup.com.ezproxy.strose.edu/servlet/BCRC?vrsn=unknown&locID=nysl_ca_csr&srchtp=glbc&cc=1&iType=naics&ste=82&mode=i&tab=256&tbst=tsIS&cind=511210+-+Software+Publishers&ccmp=Apple+Inc.&mst=Apple&n=25&bConts=13247http://galenet.galegroup.com.ezproxy.strose.edu/servlet/BCRC?vrsn=unknown&locID=nysl_ca_csr&srchtp=glbc&cc=1&iType=naics&ste=82&mode=i&tab=256&tbst=tsIS&cind=334111+-+Electronic+Computer+Manufacturing&ccmp=Apple+Inc.&mst=Apple&n=25&bConts=13247


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External Factor Evaluation

An External Factor Evaluation is an effective strategic-management tool that that

is used to asses the current conditions. The EFE is used to asses the external factors

that contribute to your overall business strategic plan. The EFE Matrix takes your

external opportunities and your external threats and places them in the matrix with

weigted totals, based upon how the company has been responding to theses factors

(David, 2011).

Below is the External Factor Evaluation of Apple Inc.

External FactorEvaluation

Matrix (EFE)

Opportunities Weight Rating WeightedScore

Expansion into BusinessSector

0.05 2

Expansion of Retail Stores 0.07 4

Expansion in Education Field 0.05 4

Product line expansion 0.10 4Global Sales Expansion 0.05 4

Easier products for Retirees 0.05 3

Cell phone 4G LTE 0.10 3

Threats Weight Rating WeightedScore

Competitors Technology 0.10 4

Competitor Pricing 0.06 4

Low Software availability 0.10 3

Substitution 0.07 3

Recession 0.06 3Increasing SmartphoneMarket

0.09 4

Other Music downloadStores

0.05 4

Totals


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As I had mentioned above the EFE measures the external environment and the

opportunity and threats that the company faces. Each opportunity and threat is

weighted, then it is giving a rating based upon the way that Apple is reacting to it (David,

2011). They are rated from 1 being that they arent dealing with it, to 4 where they are

reacting and dealing with it in the way that they are using it or changing it into a strength

(David 2011).

Apple is one of the best and most expensive companies in the world. With that

said, they still have opportunities that they can participate in even though they are in

many different fields. One thing that they havent really dealt with is expansion into the

business sector. They tried to get into the business sector but they were unsuccessful

in the 1980s. They havent tried to hard to get back in the business sector, but

according to the 2011 October Apple event keynote, 99% of fortune 500 companies are

testing or running application on an iOS device.

Two of the biggest opportunities that Apple have are Product line expansion and

mobile device 4G LTE. These two things are being dealt with extensively through Apple.

Apple has expressed interest in expanding their product line that already consist of the

iPhone (4, and 4S), iPad (1 & 2), iPod shuffle, touch and nano, the MacBook family, the

iMac family, AppleTV, and wireless devices. They have expressed renewed interest in

printers, as well as a new interest in televisions (MacWorld). They have been

researching and starting to test different televisions devices that they might be able to

produce. This could be a huge asset for Apple to invest in. Apple has had a huge


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success with their iMac display and hi res displays. They have been able to show that

they can take Apple into the Television category.

The two biggest threats that the company has is that they have a low software

availability ratio compared to windows, and the recession. The software availability issue

has been that apple and their partners have been solving at a furious rate. Apple has

been adding more and more software to their products. They have also capitalized on

the popularity of the app store for an iOS device and brought the app store to their Mac

OS X operating system. Here you are able to download any mac software that you

need. They have also made it so that you never need to have a CD in order to re-install

it. All you have to do is log in to your account and re-download the software that you

have already purchased through the app store from anywhere or any computer. This is

something that they used for the new operating system. Apple has said in many

statements that they are dedicated to being a green company and by doing this they are

able to eliminate waste from the CDs. This was apparent this in July when Apple

released their newest OS Lion. According to their press release on July 21, 2011 Apple

OS X lion, which was ONLY available by download through their online store, top over 1

million downloads in the first day available (Apple press release, 7/21/2011).

The second threat, which is a threat to every company, the recession. The

recession has hit every company across the board, but Apple has dealt with it because

they use one of their biggest strengths to combat the downfall of the economy. Acording

to a 2010 article in TG Daily, Apple has continued to define the economy and continues

to out sell any of their competitors (TG Daily, 2010). This is also shown with their recent


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release of their newest handset, iPhone 4S. According to Apples October 10, 2011

press release, Apple sold over 1 Million iPhone 4S handsets in the first day (Apple

Press release, 10/10/2011). The way that they are able to attain these heights are by

using their brand image, to harness the millions of fans to buy into their ideas and

products.

What does this mean for Apple as a company? This mens that Apple has to

continue to work on their threats and opportunities to make them their strengths. All that

they have been doing, they need to continue to do. Apple has built a company around

their brand image. This has been apparent with the strong sales of their products, even

after the death of their iconic leader. They need to follow the plan that Jobs, laid out for

them and continue to build upon their success. Apple, really need to start focusing on

the business sector, even though they havent really attacked the segment, but it is

something that is there and is penetrable.


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Stakeholders Analysis

As in any corporation that wants to succeed, Apples stakeholders are very important to

them and the way that they operate their business. According to David, Stakeholders are

individuals and groups of people that have some sort of special stake in the company (2011).

This means that anyone that has any stake, whether they are positive, negative, or persuadable is

considered a stakeholder. Stakeholders can include, but arent limited to employees,

stockholders, customers, managers, Board of Directors, creditors, distributors, the general public,

distributors, governments (local, state, federal and foreign), environmental groups, competitors

and labor unions (David 2011). All these different types of groups are considered stake holders

of a company because they are all affected by or they effect the company in some way, shape of

form (David, 2011).

There are two different types of stakeholder that are recognized by the company (David

2011). The first type of stakeholder that is recognized by a company are internal stakeholders.

The internal Stakeholders are made up mostly from the most important people within the

company. They are the CEO, Chairmen of the Board, the Board of Directors, Top Management

team, major share holders, trusts, unions, employees, and investors (David 2011). These internal

stakeholders have a very high interest in the company and are perusable based upon the strategic

plan that is being implemented (Finn 2011).

The second type of stakeholder is an external stakeholder. These stakeholders are

affected by or effect the business but they dont have any direct input to the company and their

business model (David 2011). Thses types of stakeholders are the media, foreign governments,

local governments, the general public, and local communities (Post 2001).


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There are two types of stakeholder models that we use. The first is a basic stakeholder

model.

In the stakeholder model above you would place your stakeholders according to their interest in

your company, the power that they have and whether the interest is positive or whether it is

negative. Then you would draw rings to see where your more important stakeholders are and

deal with each stakeholder that way (Finn 2011). Why is this stakeholder model not that good to

use? Its because you need to know how to deal with each stakeholder in different ways.

According to this model, Apple would deal with their TMT the same way that they deal with

their competitors. This should not be the case. You have to deal with you competitors in a

manner that they have different information than your TMT does. You cant be giving them the

same updates as you do your executives.

NEGATIVE

POSITIVE0

0

I

N

T

E

RE

S

T

POWER0 +


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The second Model is the Finn Stakeholder model. This will be explained further down.

Top 15 Stakeholders

Apple Inc, is one of the worlds largest companies and is probably the largest mobile

computing company, but just like any other company need to know who their stakeholders are.

This is the hard thing for a company to figure out, because they dont understand they these are

the people that essential decides whether your company succeeds or dies. As stated on previous

pages, a stakeholder are individuals or groups that have some sort of stake or claim to the

company (David 2011). Some stakeholders are more important to the company than others,

because they have more power, or interest in the company than others and will be listened to

more than others (David 2011). The following stakeholders are what I believe to be the top

fifteen stakeholders in Apple Inc.

1. Tim Cook

2. Board of Directors

3. Share holders

4. Competitors

5. Cell Companies

6. Chinese Government

7. The Music Industry

8. Software Developers

9. App Developers

10. Suppliers


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11. Manufactures

12. Employees

13. Human Rights Groups

14. US Government

15. City of Cupertino

Tim Cook- Apple CEO

Tim Cook became Apple's CEO on August 24 2011 when the former CEO, Steve Jobs

sent his letter of resignation to Apple. Cook has been the interim CEO of Apple on two separate

occasions when Jobs took medical leaves of absences, then most recent being from January to

June of 2011 (Gadget lab, 2011).

Cook has been seen as the man that is in charge at Apple. Tim Cook was hired by Apple

company in 1998 as the senior vice president of operations and was quickly promoted in 2002 to

world wide sales. Before coming to Apple, he was responsible for managing Compaqs entire

product inventory. Cook has helped perfect Apple's inventory management. Apple, which will

regularly launch big new products, has few of the old products left in inventory at the end of

their cycle. It has helped the the company avoid having to discount the old ones in order to get

them off their shelves (Gadget lab 2011).

Almost from the very first time that Cook turned up at Apple, he knew he had to stop

Apple from manufacturing its own products. Cook established relationships with companies to

manufacture Apples products and he closed all of Apples plants and warehouses all around the

world. Because of this, Apple's inventory, which is measured by the time that was on Apples

balance sheet quickly fell from months to days (Gadget lab 2011).


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Tim Cook has made a huge contribution to Apple by doing this. It allows the company to

show a greater margin because the product isnt sitting on the shelves for as long. You can think

of it this way; A company has two main ways to create profit margin. The first is to charge a

high price for their product (which Apple does). The second is by reducing their costs, which is

what Cook did when he arrived at Apple (Lashinsky, 2008).

Apple Board of Directors

Apples Board of Directors is made up of 5 men and 2 women which has a significant

stake in the company. The members of Apples BOD are;

William V. Campbell- Chairmen of the Board

Tim Cook- CEO

Mildard S. Drexler

Albert A. Gore Jr.- Former US VP

Andrea Jung

Arthur D Levinson

Ronald D. Sugar

With these people making up Apples it means that Apples BOD is well connected to

many other businesses. The Board easily effects the company and is affected by the company

and the business direction that they go in. The board consists of thes 7 members and are broken

down into their own committees which are the compensation committee, nominating committee,

auditing committee and the board co-lead (Apple Governance, 2011).

These men and woman represent the biggest and most important stakeholders in the

company. They are educators, CEOs, and former Vice Presidents. Because they are such a


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diverse group of people they have 3 factors. They have action, Resources and Attention. Since

they are all from many different walks of life and they all are on different boards, they have a

great ability to network with other companies and other agencies (Apple Governance 2011).

Top Management Team

As we have learned in the past four years at Saint Rose, the top management team

includes the people that are responsible for the day-to-day operations of the company. These

people are the Chief Executive Office (CEO), Chief Operating Officer (COO) and the Chief

Financial Officer (CFO). It also includes the executive VPs of the company

CEO-Tim Cook

COO (Senior VP Operations)- Jeff Williams

CFO- Peter Oppenheimer

SVP internet Software and Services- Eddy Cue

SVP iOS Software- Scott Forstall

SVP Industrial Design- Jonathan Ive

SVP Retail- Ron Johnson

SVP Mac Hardware engineering- Bob Mansfield

SVP Worldwide Product Marketing0 Phillip W. Schiller

SVP General Counsel- Bruce Sewell

These people combined make up the daily day to day happenings of the company and

keep the company going. These are the most important people in the company and they have

very strong networking skills that help the company succeed. They have to in order to keep the

company functioning and running. They have to be able to network with the people within the


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company and outside the company. The TMT, are the most important people inside the company

and make the run. They resources, including capital and including natural resources.

Shareholders

Shareholders are very important to the company and the way that they do their business

because they want them to continue to invest in the company. So to make sure that they continue

to invest in the company they will have to make sure that they are listening to them and keeping

them happy.

Competitors

Competitors are some of the most important stakeholders in a company. This may sound

odd, but its true. Competitors are very important stakeholders, because they have the most to

risk. Competitors that look upon Apple for what they are doing include;

Microsoft

Google

Samsung

Research in Motion

Hp

HTC

Motorola

Dell

Aser


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These are just a few of Apples biggest competitors that they have to watch. Apple has to

make sure that they dont allow their competitors to get ahead of them or get their secrets. They

have to also make sure that they keep their competitors close, meaning that they keep informed

on what their competitors are doing.

Cell Companies

Cell phone companies are a huge Apple Stakeholder. Apple is in many different countries

and deal with many different cellular companies. Below are all the Wireless carriers that apple

deals with worldwide;

AT&T

Verizon Wireless

Sprint

T-Mobile

AMC

3

Orange

A1 Telekom Mobistar

Telenet

GLOBUL

Mtel

VIPNet

02

Vadafone

Telenor

Telia

EMT Sonera

DNA

Elsia

Bouygues

Virgin Mobile

SFR


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Cosmote

Wind

Emobile

Meteor

TIM

LMT Swsscom

Omnitel

Tango

LUXGSM

KPN

Optimus

TMN

Beeline

Si.mobile

Movistar Sunrise

Tesco

TurkCell

Avea

China Unicom

GTA

Aricel

Telkomsel

XL

Softbank

Olleh

CTM

SmarTone

DIGI

Celcom

Maxis

Globe

SinTel

M1

Starhub

Chunghwa Telecom

FarEas Tone

Taiwan Mobile

AIS

Dtac

TrueMove

Viettel


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VinaPhone

Bell

Fido

MTS

Rogers

Sasktel Telus

Lime

Claro

Personal

Tigo

Oi

VIVO

Mobily

STC Saudi

Etisalat DU

These are all of the carriers world wide that carrier the iPhone. They are all important to Apple

because they bring Apple revenue from the iPhone sales.

Chinese Government

Apple is very particular about their products and the way that they are produced and

where they are manufactured. Apple, has many assembly plants in China and many of the parts

that they use for the assembly come from here, so it isnt hard to see why the Chinese

government plays a major role in the development of Apples stakeholder model. Apple wants to

keep the chinese government happy because they have to do business over there. Apple

assembles all their product in china ( Apple 2011).

Music Industry


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Apple has licensing deals with record labels to use their vast song catalogs by artists from

the Beatles to Led Zeppelin to Lady Gaga in the new service. As the world's biggest music

retailer, with longstanding label deals for iTunes, Apple had the clout to make these deals where

Amazon, Google and Spotify could not. The deals allow Apple to scan a user's hard drive and

make copies of the songs in the cloud, rather than forcing users into the cumbersome process of

uploading their collections. "You don't have to store every track. Which Amazon and Google

do," says former CEO Steve Jobs at Apples WWDC in 2011 (Apple 2011).

Apple entered the music business in 2002, when it made digital-music deals with major

record labels still shell-shocked from Napster and illegal downloading. In so doing, the computer

company almost singlehandedly transformed the record business' longstanding sales model from

selling $15 to $18 CDs to far less profitable 99-cent digital tracks. Apple did not give music

companies a cut of the iPod, iPhone or other devices, however, and record executives have

loudly complained as Apple's shares have skyrocketed during the same period labels have laid

off staff, cut artist rosters and in the case of once-powerful EMI, flirted with bankruptcy (Apple

museum 2011)

Software Developers

Software developers are very important to the company. They are the ones that create

programs and items to for the Mac. Apple has listened to them and created a Mac Development

program in which a developer buys a years subscription for $100 and then Apple gives you all

the tools and pre-release software you need in order to create and test the software (Apple

Developer 2011).


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The tools that are included are ;

Apple Developer Forums

Development Videos

Development Tools and Documentation

Pre release Software

SDKs

Bug reporting

These tools allow developers a chance to develop software for the Mac and there for

staying loyal to them. They are stakeholders because they make is possible for software to be

developed.

iOS App Developers

iOS App developers are very important to the company. They are the ones that create

programs and items to for all the iOS devices. Apple has listened to them and created a iOS

Development program in which a developer buys a years subscription for $100 and then Apple

gives you all the tools and pre-release software you need in order to create and test the software

(Apple Developer 2011).

Included in this section of development is;

Pre-release iOS

Pre-release Mac Software

Developer library

Developer Forum

How-to videos


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Sample codes

Documentation

Iad producer

Xcode SDK

iTunes Connect

Support Center

These Features allows the developers to create apps easily and submit them easily for

approval. This also allows Apple to track the use of the site by the developers and see how it is

being used.

Suppliers

Apple is committed to ensuring the highest standards of social responsibility wherever

our products are made. We insist that our suppliers provide safe working conditions, treat

workers with dignity and respect, and use environmentally responsible manufacturing processes.

Apples program is based on our comprehensive Supplier Code of Conduct, which outlines our

expectations for the companies we do business with. We evaluate compliance through a rigorous

auditing program and work proactively with our suppliers to drive change. (Apple Supplier

Responsibility 2011).


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Apple has taken steps in the right direction with making sure that their suppliers are

following ethical and moral resposibilty with their auditing for compliance and beyond

compliance sections (Apple Supplier Responsibility 2011).

Apples suppliers are very important to the company because they want Apple to succeed

because if they do Apple will order more and more parts for their devices. Apple has set out

code of conduct for their suppliers which include;

Labor and human Rights

Health and Safety

Environmental impact

Ethics

Management Commitment

These Facilities that supply Apples products are often under strict watch and are always being

audited by Apple employees.

Employees


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Apple trains their employees very well and they are given every opportunity in the

company to succeed. Apple compensates them for their hard work with store discounts, as well

as Apple related products and good pay (Apple 2011).

Apple employees want Apple to succeed and they are the front line in most cases with the

costumer. If Apple doesnt succeed they will lose their jobs and be unemployed, so why

wouldnt they want to work hard? After talking to several Apple employees in the Crossgates

mall Apple Store, they told me that Apple is an exciting place to work and that they allow your

creativity to flow without too many restrictions.

Human Rights Groups

Human rights groups are very interested in Apple and Apple has to keep an eye on them.

They have been increasingly targeting Apple due to their recent issues with a factory employee

jumping off the roof of a building. They have also had to deal with the groups that think that its

not right for them to be mining for certain minerals in Africa that they need (Campus Progress

2010).

They have used minerals and paid for them knowing that the money goes to help fund

genocide. These minerals are essential minerals for Apple to use in their electronics.

What does this mean for Apple

For Apple this means that they have a wide range of stakeholders that they have to

satisfy. Apple needs to find a way to satisfy all of these stakeholders, but in the same time find a


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balance of information given out. Apple has been doing a good job at making sure that everyone

is being kept in the loop to the point where they are still secretive about their products.


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Temporal SWOT

A temporal SWOT analysis is a tool that used to asses the companys internal strengths

and weakness that they current hold today, as where the external factors, the opportunities and

threats, are identified what may occur in the next 5-10 years down the road. All the factors that

accompany the temporal are important to the company in order to make an informed decision.

The temporal uses a grading system in order to rank each strength, weakness, opportunity and

threat. They are ranked based upon the action that they have or havent taken with each.

Strength Rank Grade What does this mean for Apple

Product Mix 1 A Apples product mix gives them a huge variety ofproducts for people of all types of backgrounds

Brand Loyalty 2 A Apples Brand name is recognized globally. Apple hascreated a cult following.

Strong R & D 4 B+ Product updates every year, new and futuristic features

iTunes Music store 5 B+ The biggest online music store. Partnership with manydifferent labels

Retail Stores 3 A Over 200 stores from all over the world.

Weakness Rank Grade What does this mean for Apple

Presence in Businesssegment

5 C Apple has shown interest in this market with their iOSdevices being used in the business arena

Loss of Steve Job 4 B Loss of their visionary CEO will hurt them, but they

have the correct people in place to continue Apple

Short product life cycle 3 A Products have to be update every year

Human Right Violations 2 A Recent Human rights violations and workers comittingsuicide, has Apple being watched by human rightsgroups

Slow turnaround on highvolume items

1 A Items have recently begun to take longer and longer toship out


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Strength Rank Grade What does this mean for Apple

Product Mix 1 A Apples product mix gives them a huge variety ofproducts for people of all types of backgrounds

Brand Loyalty 2 A Apples Brand name is recognized globally. Apple hascreated a cult following.

Opportunity Rank Grade What does this mean for Apple

Venture into a newmarket

1 A Apple has proven that they are ahead of the learningcurve. Now they are able to break into new markets

that they havent yet. Ie Television

Joint Ventures 5 B They have the opportunity in the next 5-10 years tohave joint ventures with some of the big names in

computing

Cloud based Computing 2 A Cloud based computing is up and coming. With Applemaking iCloud operational, they can capitalize on it and

take it to the next level

Large niche community 4 A- They have a niche community that they are in.

Specifically Education and the arts. They can expandon that to include the business segment

Growing Generation 3 A The growing population shows signs of becoming moreand more technologically advanced. Apple is in the

position that they can capitalize on it and market and

grow.

Threats Rank Grade What does this mean for Apple

Growing Tablet market 4 A Apple has the best tablet on the market and is

continually developing it to stay ahead of the rest

Growing Smartphone

Market

3 A Apples iPhone 4S just sold 1 million devices in the 1st

24 hours. Apples iPhone is the leading smartphone inthe world.

Free Music

Downloading

2 A Apples iTunes is the biggest music store out there.

They are able to fight against the illegal downloading ofmusic with this store. Apple faces a challenge in

keeping it this way.

Long-term Recession 1 A+ The U.S Economy is in the toilet, but yet they continueto turn in multi million dollar revenues each quarter.

Their products are priced high, but seen to be the beston the market


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Threats Rank Grade What does this mean for Apple

Non CompatibleSoftware

5 B+ Yes, software for mac is hard to come by sometimes,but a lot of companies are seeing how much they can

profit from it and are starting to develop their software

to be Mac friendly. Example; Microsoft Office

What does this mean as a whole for Apple Inc?

You cant just look at one chart and say this is what Apple should do. You need to look at

what they are strong at now and see how they can plan for the future. Apple is a very strong

company, especially at their design and for-seeing where the consumer electronics market is

heading, but without their visionary leader this is very difficult for them to do. Apples CEO has

the insight that Jobs did and Apple believes that he can capitalize on their strengths and eliminate

their weaknesses and threats that are forming. The biggest strength that Apple currently holds is

their brand image. Apples brand image is next to non. Watching a news cast from the day after

Steve Jobs passed away, the Japanese and Chinese citizens think highly of Apple and when

someone looks at the Apple logo they know exactly what company it belongs to. Apple can use

their brand image to enter into the new markets like, the television segment. Apple has been

developing a television that is slated to be released in 2012 (Appleinsider 2011). They are able to

use their brand image to get into the market, because people will buy it just because its Apple.


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Financial Analysis

The overall performance of Apple Inc has shown great progress over the years. For each

one of the ratios there was a year or two that they fell short of their goals but this is an

explanation of what each one of the different ratios means and how Apple Inc has been affected

by them.

The current ratio, one of the two liquidity ratios, shows the overall progress of the

company. Its purpose is to show whether or not the company is becoming successful or losing

business. From 2006 to 2010 the percentage has gone from 2.24 to 2.01 which shows that since

2006 that Apple has been able to make more of a profit.

The quick ratio, the other liquidity ratios, is used to show the companies ability to meet

its short term obligations with its assets. Between 2006 and 2010 the percentage has ranged from

2.20 to 1.96 which shows a constant ability to meet its short term obligations, much like the

current ratio. Apple Inc has constantly been able to over that 1% bubble although, it isnt as high

as they would like. That 1% bubble explains whether or not a company will get to a point where

they cant meet there short term obligations with their assets because they have more payments

than assets. This is explained best by the way that Apple is turning up retail stores from all over

the world. Apple has almost 250 retail stores throughout the world (Apple 2011).

Debt to total assets, one of the leverage ratios, is used to show the percentage that a

company has with regard to more assets than debt or more debt than assets, depending on the

percentage. Between 2006 and 2010 the percentage ranged from 2.3823 to 1.5219 which is a

great improvement. This shows that Apple was able to cut their debt in significantly over these

few short years. This shows a constant progress and the capability that Apple has to handle their


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debt so that it doesnt take over their success. Apple debt has dramatically dropped off because of

the way that they handle their supply issues and the fact that they dont own many of their

building. They are currently in the process of building their new campus in Cupertino, CA which

will cost a significant amount (Steve Jobs Presentation, 2011), this will increase their debt.

Debt to equity, also a leverage ratio, is used to show the leverage that a company has in

its industry financially although a high debt to equity can be a bad decision for investors because

they usually tack on interest rates that can be somewhat high. Between 2006 and 2010 the

percentage ranged from .72 to .57 which is a sign that Apple has the ability to create different

services that have given them a leg up in their industry with being able to keep it low.

Long term debt to equity, a leverage ratio, is used to show the way the company handles

their long term debt in comparison to their financial leverage in the industry. Between 2006 and

2010 the percentages have ranged from .075 to .13 which shows that Apple has encountered

more long term debt over these four years. Although it has been an increase in debt, it has not

increased by a substantial amount to put the company in danger. Apple has also been accruing

more longterm debt with the acquisition of supplier companies.

Time interest earned, a leverage ratio, shows if the company is able to pay the interest

that has accrued on the debt that they have. What this means is that a high percentage shows that

the company has been able to cut down the amount if interest that they have to pay off. Between

2006 and 2010 the percentages have ranged from 2.82 to 18.5. This shows that the interest that

was owed byApple was much higher in 2006 than it was in 2010. It is a good improvement for

this company because it also shows the capability that they have to cut their interest on their

Appledebt.


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Inventory turn over, an activity ratio, is used to show how effective a company is when it

comes to the money they spend on their inventory versus how quickly they need to produce

more. This is a great way to see if a company can be cost effective. Between 2006 and 2010 the

percentage ranged from 63.07 to 52.51 which shows that Apple has cut the amount of money that

needed to be spent on their inventory turn over. They have become more cost efficient with the

money that they need to spend in order to keep themselves in business and making a profit. It

also shows that Apple has been able to push their products out quicker and more efficiently,

mostly by creating such a hype for their products.

Fixed assets turnover, an activity ratio, which shows how productive a company is with

regard to the money they make along with their assets. The percentage from 2006 to 2010 are

18.41 to 16.89 which shows they have been able to cut down on how much they are turning over

their assets. It is an improvement to cut down on how much they are turning over their assets.

Accounts receivable turnover, an activity ratio, which helps to show how many times per

year the accounts receivable is collected over a period of time, usually a year. Between 2006 and

2010 the percentage has ranged from 17.99 to 14.71. This dropped means that they are collecting

their accounts less frequently. This can be seen as a good thing because they havent had any

issues with people paying them back.

Average collection period, an activity ratio, explains just how long it takes for a company

to collect the money that they are owed by customers or potential investors. Between 2006 and

2010 the percentage has ranged from 20.29 to 18.5 which is a small drop off. This shows that the

average time that people have been paying Apple back has dropped off. This doesnt mean that

their sales have dropped, it just means that they have been collecting faster.


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Gross profit margin, a profitability ratio, is explained as what the company still has left

over after they have paid their financial obligations. This can determine the success that a

company has or hasnt had along with the ability to continue to profit or lose money. From 2006

to 2010 the percentage for Apple has gone from 28.98 to 39.38 which is a sign of success. This

means that they have found a way to continue to make money while keeping their bills relatively

the same so that they can continue to profit.

Operating profit margin, a profitability ratio, is used to show if the way a companys

pricing strategy for their product has been efficient or not. This too can determine if a company

has been able to efficiently price their product in order to continue to be productive and profit.

Between 2006 and 2010 the percentage has gone from 12.70 to 28.19 which shows a huge

increase in the way that Apple has been able to price their products to move. This shows that

customers are more interested than they were in the past. Even with the economy the way that it

is, customers still believe in Apples products and are still purchasing them.

Net profit margin, a productivity ratio, is used to show how effective a company has been

over time at controlling their cost. This is one determinant of how successful a company can

make themselves in the future by how much they are spending and how much is left over. The

percentage from 2006 to 2010 has gone from 10.30 to 21.48. This is close to the operating profit

margin because the decisions that Apple has made have affected both areas which shows a

common decision.

Return on total assets, a productivity ratio, is used to show the money the company

makes before interest and taxes. This helps

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