apple inc. - economical success story

8/10/2019 Apple Inc. - Economical Success Story

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Apple: Strategic Management Case

Imran Khan

Saurabh GuptaShreshtha Jaiswal

Subhash

Where is Apple Located?

• Apple’s main headquarters is located at 1Infinite Loop, Silicon Valley, California.

• Apple has also expanded internationallywith locations in Cork, Ireland andSilicon Valley, Singapore.

Cork, Ireland Silicon Valley, Singapore

• Apple has over 200 retail locations across theU.S. To find a store nearest you, Apple’s mainwebsite provides a search engine that canprovide that information.

Apple, Inc.

Now• Founded 1977

• HQ Cupertino, Ca. “The Mother ship”

• Largest U.S. company ever

• 72,000 Employees

• 34 Patent Applications in October

• 80% of revenue is from new products sold from

Mid Sept to M/E Oct

Competencies1. Simple, Well Designed, User friendly

2. Innovative Culture of Design

3. Loyal Customers

4. Technology iOS

5. Energy Efficient

Internal Assessment

1. Operational Focus - Willing to release incomplete products

2. Wall Street - Engaging to increase dividends

3. Shifting Values - MBA vs. Liberal Arts

4. Relaxed Atmosphere - Leadership quiet yet demanding

5. Highly Ethical ?- Some might question

• Procurement

• Vendors

Change is Inevitable?Release history

LEADING INDICATORS

DEMAND DRIVERS

Demand as a F(x) of leading

indicators

D = f(li1, li2, li3, …, lin)

Market Share: Stable

Search trends as an early indicator: Who has it?

Networking effect

Sharing

Social Nets Social Networking capabilities

Economic Leading Indicators

Demographics

World Progress Indicators

Leading Indicators: Product Drivers

Product Drivers:

Mobile browser counter as a

leading indicator ?

ANDROID

iPhone

EXTERNALITIES

Smart Phones: Competitors

iPhone, Android or Windows Phone ?

Mobile computing: Laptops &

Notebooks

Key Success Factors

• Design

• Miniaturization

• Security

• Ease of Use

• Reliability

Marketing

Open Systems

Improve + Innovate

“Closed” Systems

Cool! SecureReliable

Reduced Cost of production

Improved Sales & Margins

FreeBSD

Target Market

B2B Market B2C Market

Enterprise + Government

SMB$$$$$ Class

$$$$$$ Affluent

Premium PricingEducation

Smart Phones : 71% CAGR for the next 4 yrs.Cloud computing : 20% CAGR

Mobile dev. in general: 25%

*nomic

*provisioning

Carrying

Capacity ???

Convergence

INDUSTRY GROWTH & MARKET SHARE

Smart Phone: Market share growth

The mobile worldwide market in 2010

Apple as a Mobile browser leader In

iPhone Mobile market share

iPhone Mobile market share2012

What about the iPad ?

• Apple has 68% of the tablet market

• Cannibalization of iPad by the mini iPad?

• Google & Others TabletsOpen source to the rescue?

App store: Closed platform ?

The Apple Retail Store

• Employees:

• Apple Specialist: Knowssoftware, inside and out

• One-to-One PersonalTraining: Hour Long

• Free Workshop-Group:Training

• Genius Bar: Damaged

product assessment

• Concierge: Help you findanything is in the store

• Activities:

• Local Gathering Place

• Free Musical

Performances• Entertaining/Informative

Presentations

• Youth Workshops: Year-round

• Apple Camp: Summer• School Night: Students &

Teachers showcase ownwork done on Mac.

• “When you first start off trying to solve a

problem, the first solutions you come up with

are very complex, and most people stop there.

But if you keep going, […] you can often timesarrive at some very elegant and simple

solutions.” ---- Steve Jobs

Apple re-legitimize vertical integration

Competitive Advantages of Apple’s

vertical integration

Sell at a Premium

Apple’s profit comes from

Apple’s profit comes from margins in hardware (iPad/iPhone)

Big picture: hardware drives

Big picture: hardware drivesApple’s gross margin

Cross-sell your product line

Wh i h iC ?

Who is the iCustomer?

• Product line covers all markets, all price

ranges, all needs with an accurate

segmentation.

• Product lifecycle: each new product

implements appealing new features, stronglyinducing the loyal iCustomer to buy new

products (iPhone 4 to iPhone 5)

iP d d iPh d i M l

iPod and iPhone drives Mac sales

Integration reinforced by retail

Integration reinforced by retailstrategy

Apple Stores are a place where the company can:

• showcase a 100 % Apple environment (to appeal the iCustomer )

• have a trained sales force selling its products.

H did A l th h ?

How did Apple cross the chasm?

Lessons learned from its failure in 80’s

Think Different!!!

What was Apple’s vision of Computing?

To make it happen Apple is investing

pp pp gin cloud

Assessing Risks and Competition

Worst-case scenario:

How could Android kill iOS?

Conclusion

QUESTIONS???

THANK YOU!!

apple inc. - economical success story

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