1. Evaluation of the External Environment

a. Introduction

i. Apple Computers originated in Cupertino, California by three friends,

Steve Wozniak, Steve Jobs, and Ronald Wayne. Wozniak was the

computer nerd of the three and had been working on a computer design

and once Jobs convinced him of finishing his model and selling it to the

public the beginning of Apple computers was underway. On January 3,

1977 the hard work of the three friends became Apple Computer, Inc.

Soon after Wayne sold his share back to Jobs and Wozniak. The two

Steve’s continued on to create one of the most successful companies that

would in future years be known for their computers, music devices, cell

phones, and software worldwide. Apple took off after Wozniak’s Apple I

adding numerous versions of the Apple, the Macintosh line, the iPod,

iPhone, and iTunes products, and numerous other computer/software

products to the Apple Computer, Inc. family. Apple has made its mark on

the technology industry by continuing to be successful innovators that

lead their numerous product markets.

b. Identification of the Current Corporate Level Long-Term Strategies and Tactics

i. Apple has two major long-term strategies and tactics that they focus on.

The first being strategic alliances that they have with IBM, Microsoft, and

AT&T. The alliances they formed with IBM and Microsoft have enabled

Apple to further their computer growth and guarantee software that is

available and familiar to consumers all over the world. The alliance with

AT&T was a recent alliance that was formed when Apple came out with

their iPhone. Their contract with AT&T ends in 2010, and the phone

world is anxiously waiting to see if they will continue this alliance or

create a new one. The second strategy is concentration on internal

growth which they are implementing by developing new products for the

markets they have already established and by finding new markets for

their current products. For example Apple created a new market for

their Macintosh computers by pushing them into the education market

and creating their mark among students and teachers.

c. Identification of the Current Corporate Level Short-Term Strategies and Tactics

i. Currently Apple does not seem to have any short-term strategies and

tactics. This could be very risky for Apple, but at the time being they

seem to be successful without it. They may want to rethink their lack of

strategy soon due to the illness of Steve Jobs and implement a plan

incase they lose their leader.

d. Identification of the Current SBU Level and Tactics

i. Apple’s current strategies defined by Porter are product differentiation

with a focus on a broad market. This can be seen by Apple’s many

products including the iPod, the iPhone, and all their Mac books that are

priced and designed to fit every person’s needs and wants. Apple’s

current strategy defined by Miles & Snow is being a prospector. Apple

creates new products and services, such as their iTunes when legally

downloading music was needed, to changing market conditions. They

also respond rapidly and try to be the first mover. By doing this they set

a benchmark for their competitors and place their products in

consumer’s mindset first.

e. Identification of Apple’s Current “Green” Efforts

i. Apple has been making large strides in order to make their company a

“green” company. Looking at the transformation of their MacBook Pro

from 2006 to 2008 you will see that they have gone from having BFR,

PVC, mercury, and arsenic in their 2006 version to having none of them in

their 2008 version. They have also been reducing their packaging to both

save materials and to make it possible to store more packages on one

mode of distribution, thus reducing the amounts of trips it would have

had to make. Last but not least, Apple has also been putting more of

their attention on getting more recycling centers set up for their

products. One of their ways of doing this is having a program within their

stores that allows a customer to bring in their old Apple product they

don’t want anymore, and the store will take care of the recycling process.

Apple’s efforts are a great way to start their journey to being a

completely “green” company (Apple.com).

f. Current Mission and Need for Change

i. Apple’s current mission statement is:

“Apple ignited the personal computer revolution in the 1970 with the

Apple I and reinvented the personal computer in the 1980’s with the Macintosh.

Today, Apple continues to lead the industry in innovation with its award-winning

computers, OS X operating systems and iLife and professional applications.

Apple is also spearheading the digital media revolution with its iPod portable

music and video players and iTunes online store, and has entered the mobile

phone market with its revolutionary iPhone.”

Apple’s mission statement is not very good, because it is more of

description of their company rather then an explanation of their direction

and purpose.

2. Opportunities and Threats-

Assessment of Remote Environment

Totals: Opportunities-53 Threats- 38

Opportunities

10- Technological Innovations-T

10- Global Expansion-I

9- Increase in world mobile technology market-I

9-Increased use of MP3 technology-T

8- Increase online sales-E

7- Create more compatibility with Microsoft-T

Threats

8- Recession-E

8- US Market Saturation- E

7- Drop in US consumer spending-E

6- Environmental Concerns-Eco

5- Viruses-T

4- Regulation-P

i. These two lists illustrate that Apple’s opportunities far out way their threats.

With a score of 10 in the opportunities column technological Innovation is by far

the most important thing that Apple needs to accomplish in order to continue

being successful. In the technology industry innovation is essential to long term

market presence. Global expansion is also very important for Apple because

there is a huge consumer market in foreign countries that Apple has not even

started to serve. Alone with expanding to foreign markets Apple can take

advantage of the large mobile technology market of consumers wanting

handheld devices like the iPhone. When the iPhone was released in Europe the

sales were much higher than expected. With a score of 8 we feel that an

opportunity for Apple is an increase in online sales. Apple has stores all over the

United states and they are currently opening stores in many other countries

even with this fact many consumers would prefer to shop online and Apple has a

very user friendly website where people can long on and get exactly what they

want. Apple could use marketing tactics to get more consumers to use this form

of purchasing their products.

ii. The threats facing Apple in their remote environment are definitely challenging

the first being the recession. We ranked the recession as an 8 and we believe

that because Apple’s products are at the higher end of prices in the technology

industry, consumers being hit by the recession make choose to go with a lower

cost substitute. Also ranked with an 8 is market saturation, Apple currently holds

a commanding 70% of the MP3 and online music sales market. Although this

shows their amazing success in these markets in the past it also shows a possible

weakness in the future. If consumers already have an ipod they are less likely to

buy the newest version especially with the current economy. Another threat to

Apple is the rise in consumer awareness of environmental concerns. Apple needs

to combat this threat by making environmentally friendly products and

expanding their recycling program.

Assessment of Industry (Task) Environment

Totals: Opportunities-57 Threats-43

i. In the industry environment Apple again has more opportunities than threats.

Traditionally schools and businesses have gotten contracts with PC manufactures

such as Dell and Hewlett-Packard, this gives Apple an opportunity to try to break

into these markets and show that Apple computers have a place in the office and in

Threats

(10)- Bargaining Power of Consumers

(9)- High Rivalry Among Competitors

(7)- Substitute Products

(6)- Bargaining Power of Suppliers

(5)-Increased pressure from music industry to raise MP3 prices

(5)- Ease of Entry for New Companies

Opportunities

(10)- Business Consumers

(10)- Public Contracts

(9)- Green Products

(8)- Strategic Alliances

(7)- Continue to Produce High Quality Products

(6)- Increase brand loyalty by entering new markets

schools. Another opportunity that we feel is very important is the growing demand

for green products. If Apple can produce products that are environmentally superior

to other products on the market it could give them a competitive advantage and

give consumers a valid reason to spend the extra money that Apple products cost.

Apple is a very independent company mostly because of Steve Jobs; we feel that this

has created an opportunity for them to make strategic alliances with other cell

phone carriers and technology industry companies. Apple is known for their high

quality and extreme brand loyalty, these two factors have created an, “Apple

Culture,” and Apple has an opportunity to enter new markets and add more

members.

ii. Apple’s threats in the Industry Environment are led by bargaining power of

consumers. We ranked this threat a 10 because consumers hold a lot of power in the

technology industry and because Apple’s products are at the higher price points of

the industry consumers have many lower cost options. The high rivalry among

competitors in this industry also poses a threat to Apple. In the United States it

seems that people are either PC users or Mac users and it is difficult to switch a

person from one side to the other. Since PC computers are much more popular and

most people have had more exposure to them Apple faces an uphill battle in

converting PC users. Apple’s itunes online music store generates huge profits for the

company and a threat to this is the music industry pressuring Apple to raise the

prices on online music. If Apple and other online music providers were forced to

raise prices this would severely hurt their bottom line.

Assessment of Competitive Environment

Totals: Opportunities- 34 Threats-28

i. Apple’s competitive environment is very intense and the rivalry’s are fierce. In the

competitive environment we again feel that Apple’s opportunities outweigh their

threats. As previously stated Apple has a large opportunity to expand into global

markets that have countless potential consumers. The user friendliness of Apples

products in an opportunity for them, most people can learn fairly easily how to use

Apple products such as their ipod products and their iphone. This is part of the

reason that these products have been so wildly successful. In the future Apple has

the opportunity to create more user-friendly products and continue to be successful.

Apple currently has a very loyal customer base and the opportunity for the future is

to expand this customer base by exposing more users to their products. Apple also

has an opportunity to get public and private contracts with schools and businesses.

ii. Apple’s biggest threats in the competitive environment are Dell and Hewlett Packard

both raked at an 8. Dell and Hewlett Packard both offer customers a range of prices

and options to suit the tastes of almost everyone. This is a huge threat to Apple

Opportunities

(10)- Global Expansion

(9)- User friendly products

(8)- Loyal Customer Base

(7)- Contracts with Schools and Businesses

Threats

(8)-Dell

(8)- Hewlett Packard

(6)- Android and new Android phone

(6)Low cost substitutes

because their computers only appeal to customers with a higher price point. In these

difficult financial times this could prove to be a problem for Apple. Another threat

for Apple is Android and the new Android phone. These two items will rival Apple’s

iphone and the iphone apps. With Android most of the apps are free and the

Android phone and monthly service are less expensive than those of the Apple

iphone.

Summary- Most Crucial Opportunities and Threats

O-T Final Score= 2.5

i. Apple has many great opportunities and also great threats in their future. The most

important opportunity for Apple is technological innovation, in the past this has

been one of Apple’s greatest strength’s and this will continue to be the case in the

future. Global expansion is an extremely important opportunity for Apple because

there are so many consumers that they can reach around the world. Since Microsoft

and PC’s have traditionally been the operating system and computers used by the

majority of the population it would benefit Apple greatly if they can create more

compatibility with them. We also feel that an important opportunity for Apple would

Opportunities

(10)- Technological innovation

(10)- Global expansion

(9)- Increase in world mobile technology market

(8)- Creating more compatibility with Microsoft products

(7)- Strategic Alliances

Threats

(10)- Economy

(8)- High rivalry among competitors

(7)- Decrease in demand

(7)- Dell / HP

(6)- Low cost substitute products

be to create more strategic alliances with cell phone carriers and with computer

companies to create lower cost products.

ii. Apple’s most prominent threats are led by the economy ranked at 10. This top

threat is an obvious one considering the prices of Apple products. For almost every

product Apple has there is a similar low cost alternative and in the current economic

times even people who would like to but Apple products will be forced to go with a

lower cost substitute. The high rivalry among competitors in the technology industry

makes it very important that Apple stay ahead of the curve with innovation. In this

industry the company that has long-term success is the company that offers

customers the newest and latest technology. Along with a slower economy comes

the threat of decreased demand, this is a threat to Apple especially because of their

limited product line.

3. Identification of the Internal Environments

a. Apple currently holds a very strong financial position. Over the last several years

they have experienced an increase in their growth, sales, net profit, and stock

price. One of Apple’s top financial strengths is the fact that they do not pay out

any dividends. This enables them to re-invest the money into capital structures.

Part of Apple’s financial strategy is to spend a high amount of money on R&D;

allowing them access to the latest technology, which keeps them a leader in

industry innovator.

b. Ratio Analyses, Z-Value, and g*

2009 Financial RatiosIndustry Apple Microsoft Dell HP

Current Ratio 1.91 1.88 1.82 1.36 0.98Quick Ratio 1.54 1.86 1.58 1.06 0.67

ROA (%) -48.69 10.59 18.71 9.35 7.35ROE 9%) -415.91 20.49 36.83 58.02 21.39ROI (%) -370.59 20.49 33.64 40.17 17.87Net Profit (%) -50.25 15.61 24.93 4.06 7.04

Debt/Equity (%) -14.89 0 9.49 44.44 19.71Debt/Assets (%) 10.36 0 7.39 7.59 15.75

Dividend Pay/Share (%) 0 0 2.10 0 0.84Dividend P Ratio (%) 0 0 31.71 0 9.56

i. Apple’s current ratio is slightly lower than the industry which suggests

that Apple has fewer resources to pay its debts. Although this is true, all

of the competitors have fewer resources available to pay back their debt

than Apple. This ratio suggests that Apple would be considered to have

good short-term financial strength. When looking at the quick ratio it is

clear that when Apple is compared to the industry, Apple is better able to

meet their current liability obligations by using their liquid assets. When

compared to Microsoft, HP, and Dell, Apple is more liquid. Apple’s return

on assets is on the higher end when compared to the listed competitors.

This suggests that Apple’s assets are profitable in generating revenue.

The industry has a negative ROA, suggesting a low amount of earnings

derived from each dollar of assets. This means the industry’s assets are

not profitable in generating revenue. Apple has a low return on equity in

comparison to its competitors. This means that Apple isn’t as efficient in

generating profits from their shareholder’s equity. Again, the industry has

a negative ROE, which makes Apple highly appealing. Apple has a

significantly lower return on investment than the competition. This

means that the Apple gains less money on their investments. Apple

doesn’t pay out any dividends; they instead reinvest the money into

active capital structures.

ii. Apple has a current Z-Score of 3.018. This z-score indicates that Apple has

a very good financial standing and is not in any immediate danger of

bankruptcy. Apple’s g* is -1.03. This indicates negative growth, which is

mostly due to their high increase in assets. Even though their growth is

shown to be negative, they are still having successful growth and can

make it positive again.

c. Income Statement, Balance Sheet, and Cash Flows

Comparative Income Statementin millions

Industry Apple MicrosoftSales $ 110,599 100% $ 36,537 100% $ 58,437 Cost of Goods Sold $ 79,015 71% $ 22,694 62% $ 9,864 Admin. Expenses $ 18,938 17% $ 5,482 15% $ 25,589 Depreciation $ 2,223 2% $ 703 2% $ 2,291

i. This comparative income statement for Apple, the technology industry,

and three major competitors shows why Apple is such a successful

company. When comparing Apple’s sales to Microsoft, Dell, and HP one

may conclude that Apple isn’t selling nearly as much; however, Apple is a

much smaller company than the competitors presented above. When

comparing cost of goods sold, Apple’s remains relatively low compared to

Dell and HP, but are significantly higher than Microsoft. This could

indicate that although Apple’s products are relatively expensive, they are

able to produce their products at a lower cost than Dell and HP. However,

Microsoft appears to produce their products at the lowest cost. It is

worth noting that Apple spends the least amount of money on

administrative expenses when compared to Microsoft, Dell, and HP.

Lastly, Apple by far has the highest earning per share on its stock.

Comparative Balance Sheetin millions

Industry Apple MicrosoftCash and Cash Equivalents $ 36,202 39% $ 23,464 44% $ 31,447 Inventory $ 2,018 2% $ 455 1% $ 717 Other Current Assets $ 13,020 14% $ 8,985 17% $ 5,924 Total Current Assest $ 64,304 69% $ 36,265 67% $ 49,280 Property Plant and Equipment $ 6,926 7% $ 2,954 5% $ 7,535 Other Assets $ 4,853 5% $ 3,651 7% $ 1,878 Total Assets $ 93,062 100% $ 53,851 100% $ 77,888

Long Term Debt $ 3,000 5% $ - $ 3,756

ii. Apple has the lowest amount of inventory on hand when compared to

Microsoft, HP, and Dell. Part of Apple’s strategy is to invest their capital

into assets which are actually active because inventory creates an

expense. Apple currently has the highest amount of long term

investments in relation to its major competitors. This indicates that

Apple’s management is focused on long-term growth. Apple and

Microsoft are the only firms in this data set who actually have a higher

level of equity in comparison to their liabilities. This is crucial for Apple

because it allows them to generate enough equity from their resources to

pay off their debts.

Apple 5 Year Statmenet of Cash Flowsin millions

2009 2008Operating Activities $ 10,159.00 $ 9,596.00 Investing Activities $ (17,434.00) $ (8,189.00)

iii. This year Apple has experienced its first negative cash flow in four years.

This is not only due to the fact that they spent more than double the

amount of money on capital expenditures than last year, but that they

weren’t able to generate enough money from their operating activities to

offset the major expenditures. This suggests that Apple needs to work

on increasing their revenue and decreasing their expenses in order to see

a positive cash flow next year.

d. Profitability Explanationi. Apple is showing a great level of profit for several reasons. First, and

probably the most important is that they do not have any long term debt.

The continually choose not to provide dividends in order to reinvest the

money into capital infrastructures. Apple also has a very small amount of

liabilities in comparison to the industry and its competitors. They

generate enough equity from their resources to cover their short term

debt. Another great indicator of their profitability is their high earnings

per share. Apple is also currently growing faster than the industry. In

order to sustain their profitability they need to make sure to continue to

increase their growth rate.

e. Industry Financial Numbers and Explanationsi. The industry as a whole is doing quite well. When comparing the industry

and Apple’s income statement it’s clear that both have experienced an

increase in sales and have come out with a positive net income. Apple’s

sales constitute about 33% of the entire industries sales. Considering the

size of Apple and the amount of time they have been a major player in

the industry, they are surely showing their potential. Both the industry

and Apple have an extremely high earning per share when compared to

Dell, HP, and Microsoft. This demonstrates the attractiveness of Apple for

investors along with their profitability. When comparing balance sheet

statements, the industry has a lot of inventory on hand, a lot of long term

debt and current liabilities. In fact, the industry has more liabilities than it

has generated equity. Clearly, the industry as a whole has a difficult time

generating enough equity from their resources to pay off their debts.

However, Apple has no problem here. They are very capable of paying off

their debts. In conclusion, Apple is currently performing better than the

industry.

f. Financial Problem or Success Statementi. Apple is currently experiencing financial success. Although Apple has seen

an increase in their profitability, sales, stock price, and assets the

industry. Some major factors that need to be improved upon are

increasing their ROA, ROE, and ROI. In addition, they need to work on

decreasing their cost of goods sold because as of now it represents over

60% of their expenses. They also need to make sure that their growth

rate continues to increase.

Analysis of Marketing Position

a. Sales/Company and Industry Growth Including Regression

ii. Apple is currently growing faster than the industry. Apple’s growth rate is

9.30% while the industry is at 5.37%. Although the industry is in a strong

position, Apple’s growth is soaring due to their innovative strategies.

b. Market Share vs. Industry and Competitors for 5 Years

5 Year Market ShareIndustry Apple Microsoft Dell HP

2009 110,599 36,537 33% 58,437 53% 61,101 55% 118,364 107%2008 109,422 32,479 30% 60,420 55% 61,133 56% 104,286 95%2007 97,413 24,006 25% 51,122 52% 57,420 59% 91,658 94%2006 90,359 19,315 21% 44,282 49% 55,908 62% 86,696 96%2005 75879 13,931 18% 39,788 52% 49,205 65% 79,905 105%

i. Apple’s current market position is very strong. Microsoft, HP, and Dell

currently hold a higher percentage of the market than Apple. Although

this is true, Apple has proven to be an industry innovator. Virtually every

product they have developed has created a huge sensation among

consumers. Apple’s marketing efforts are truly one of kind. They rely

heavily on guerilla tactics and celebrities to draw consumers in. The only

downfall Apple faces is the fact that its competitors such as Microsoft,

HP, and Dell have been able to create strong brand names over a long

period of time. Apple has just recently become a major competitor in the

industry. Even though this is true, they have done an impeccable job

sustaining their position. They have successfully proven to provide high

quality products and create a very strong brand name.

c. Marketing Tactics Humorous commercials Hip and fun campaigns Cutting edge technology Easy to use operating systems User friendly Products Environmentally Friendly Products Innovation Sleek Designs

i. Apple has an unmistakable marketing style and it has been very

successful for them in the past few years. Apple is known for their

humorous commercials and hip and fun campaigns which draw in the

young and the young at heart. Apple provides products that are cutting

edge and in their commercials and ads they try to communicate that to

the consumers. Another thing that they try to convince their viewers of is

the easy to use operating system and products. In most Apple

commercials they show actual games or apps that can be run on their

products this is to draw in their potential customers and show them why

they can’t live without the specific Apple product.

d. Marketing Problem/ Success Statement

This company’s marketing efforts are a strong success because their campaigns are

recognizable and memorable. Their products and branding have enabled them to create a

culture that people want to be part of. Over the past 3 years Apple has continually

increased their shareholder wealth and the profitability of the company (yahoo finance,

2009).

Analysis of Management Position

a. Identification of Structure and Top Management

i. Apple uses a multi-divisional structure within their company. They have

Steve Jobs at the top as CEO and branch down to the COO and then

branch down to their divisions that consist of: Worldwide Product

Marketing, Software Engineering, Retail, Mac Hardware Engineering,

iPhone Software Engineering, and Devices Hardware Engineering. Each

of their divisions houses their own supervisors and employees.

b. Top Management and Executive Compensation

(Company News for Apple Inc.)

c. Direction of Top Management

i. The vision that Apple’s top management has is to continue to be the

leading innovator in their markets. They have continuously captured

their target market audience by producing the latest and greatest

products before any of their competitors. They also want to push for

more worldwide success by expanding their retail stores and iTunes into

more foreign countries that have not be fully exposed to their products.

By doing this they will increase their sales overseas and will become a

worldwide phenomenon just like they did in the United States.

d. Stock Price Performance

i. Apple has had great success with their stock. It has been strong from the

beginning and has been very strong as of late, currently selling at

$194.34. Looking back at Apple’s stock it seems that though they look

like they dip down here and there, they never go below selling for $50.

This shows the strength of the company’s stock is for them (Yahoo

Finance, 2009). As with any other product driven company, Apple’s stock

heavily reflects the releases of their new products. This also favors Apple

though because of their positioning as a market leader.

e. Proposed Mission, Vision, and/or Corporate Goals

i. Since we concluded that Apple does not have a strong mission statement

due to the lack of direction or purpose, we have created one we think

would work better for them:

“To be a leading innovator and provider of technological products to

countries all over the world.”

We feel this will give Apple the direction and purpose they need to

communicate with their consumers.

ii. The vision that we found for Apple was a quote given by Steve Jobs in an

interview that states, “To have an Apple on every desk” (Birnbaum,

2000). This is direct and to the point and we believe Apple should

continue with this vision.

iii. Apple doesn’t seem to have defined any values for their company, so we

propose that Apple should define values concerning the environment,

their community, and the world to reach a level of understanding with

their consumers.

f. Management Performance Assessment

i. Apple’s management score of a 75 places them in an average position.

Even though Apple is a successful company, they still do have some

improvements that need to be made within their management. One of

the important strengths they have is their leadership quality which also

leads to a weakness of theirs, which is Steven Jobs. Steve Jobs is an

amazing leader for Apple and has brought Apple up to where it is now.

The weakness Apple is facing is not having a successor for him now that

he is ill. A few other weaknesses that Apple faces are their return on

assets, investments and equity. Once they can get those back up to

where they need to be, Apple will be a great success in their

management position.

g. Management Problem or Success Statement

i. Apple’s management is a marginal success because of the weaknesses

they still do possess. We believe that Apple can easily become a strong

success since their weaknesses are concentrated to mainly one area that

can be turned around relatively quickly. Apple’s strengths are strong and

will continue to be strong, which will hold them at the success level that

they are at until their weaknesses can be improved.

4. Strategic Position

a. I.D. of Current Core Competencies

i. Product differentiation

ii. Industry innovator

iii. Brand loyalty

b. I.D. of Competitive Advantages

i. Apple’s greatest competitive advantage is differentiation of their

products. Their computers and digital music devices set the standard for

innovation and quality. They have various versions of almost every

product including: Mac computers, software, iPhones, and iPods. Apple is

well known for being an industry innovator. Apple guarantee’s their

customers state of the art products that are not available anywhere else.

In addition, Apple has managed to create a community of intensely brand

loyal customers. These consumers who are proud to be a part of the

“Apple culture” stand by their purchasing decisions with pride and

commitment. In fact, most consumers who decide to go Mac, never go

back to a PC.

c. I.D. of Top 5 Key Performance Indicators

i. Profits:

ii. Stock Price: $201.46 Nov. 9, 2009 compared to $94.77 Nov, 11, 2008

iii. R&D: +83% 2009 compared to +71% 2008

d. Overall Position

Weaknesses

(9) High R&D

(8) Dependence on Steve Jobs

(7) High beta

(6) Social responsibility

(6) Batteries

(6) Not compatible with Microsoft

Total: 47Avg: 6.7

Strengths

(10) Low debt

(10) Continual investment in R&D

(10) Steve Jobs

(9) Secrecy

(9) Brand image

(8) Celebrities

(8) Innovation

(7) Multi-divisional

Total: 72Avg: 9

S-T Index: 2.3

i. Apple has many strengths which allow them to be the successful

company they are. Because Apple keeps such a low amount of debt

allows them to keep their capital available for other uses. Their high

devotion to R&D enables them access to the latest technology to keep

them in the position of an industry innovator. Apple has a very strong

brand image which promotes quality and reliability. Part of their

marketing strategy is to us celebrities in their advertisements in order to

Apple in the consumers evoked set. Steve Jobs is the most valuable asset

Apple has because of his drive and commitment. Without him, Apple

wouldn’t be where they are today. Secrecy is very important to Apple.

Steve Jobs is the only person who fully knows every detail of the

company and he’s very apprehensive to divulge information about

Apple’s products, software, and new developments. This is seen as a

strength because it provides a smaller chance for competitors to copy.

Being a multi-divisional structure is very important. It keeps the functions

of the company working at what they do best rather than stretching out

the top management. Innovation is definitely Apple’s biggest strength in

the technological industry. They are the leaders of computer technology.

ii. Along with strengths come weaknesses. Apple has several weaknesses

which they need to address in order to remain a top player in the

industry. The fact that they have a high beta could make them be

perceived as a risky company. It could be seen as unattractive to spend so

much money on R&D because so much is being devoted to one area

instead of other areas of their infrastructure. However, without it, they

wouldn’t be a leader in innovation. Social responsibility is something that

is very important to consumers today. Apple currently does not highlight

their efforts towards social responsibility. It’s well known that Apple

relies too heavily on Steve Jobs. If he were unable to perform because of

his illness or even have to leave the company, Apple would be in serious

trouble. Although secrecy is important in protecting Apple’s ideas, it has

caused them trouble in the past in regards to withholding information

from their stockholders. Consumers are also well aware that Apple’s

batteries have a poor performance and are a huge inconvenience to have

replaced. The last weakness for Apple is the fact that they are not very

compatible with Microsoft products, which deters many consumers.

e. Overall Problem/Success Statement

i. Apple is a success because of their product differentiation, innovation,

and brand loyalty.

5. Conclusion and Discussion

a. Long-Term Prospects and Options

i. Some long-term strategy options that Apple has are to continue their

internal growth by continuing to update their current products and

services and to expand their “green” movement. By continuously

updating their products and services they will continue to be the leading

innovator in their markets and continue their long-term success. By

expanding their “green” movement, Apple will become more appealing

to consumers since the world’s population is looking for anyway to

become a little greener. Another option would be to create more

strategic alliances to expand their mobile phone carriers that support the

iPhone. This would open up many more markets worldwide for them to

take over.

b. SBU Level Options (Porter; Miles & Snow)

i. Apple’s current positions in both Porter and Miles & Snow should not be

changed. We recommend that they continue to hold their current

positions at differentiation (Porter) and prospector (Miles & Snow)

because of the success that they have had with being the leading

innovator with all of their products in the different markets

BibliographyBirnbaum, B. (2000). Strategic Thinking, A Four Piece Puzzle. Birnbaum Associates.

Company News for Apple Inc. (n.d.). Retrieved November 2009, from Reuters: http://www.reuters.com/finance/stocks/companyNews?symbol=AAPL.O

Yahoo Finance. (2009, November). Retrieved November 2009, from Yahoo: http://finance.yahoo.com/q?s=AAPL

Apple Retrieved November 2009: www.apple.com