Apple Apple ComputerComputer

s, s, Inc.Inc.

Lauren Carter

Monica Bridges

Elizabeth Smith

Kevin Boutwel

l

Who is Apple Computers,

Inc.?• Founded in 1976 by Steve Jobs and Steve Wozniak

• Company was founded after IBM created the 4004 chip which allowed previously bulky computer components to be included on a small chip that is located in a computer system small enough to fit on a desktop.

• Apple’s logo, now one of the most recognizable logos in the industry, was adapted a year after the company was founded.

1976

1981

2006

1975

The Evolution of a Brand

1997- First online store opened.– Over 4.4

million hits and 500,000 orders in the first 24 hours of operation.

General Environment

• 2002- Initiated a Swith Advertising campaign.– Geared to switch

PC users to Mac users.

• Currently Operates 200 brick and mortar locations world-wide.

• i Series of computer products brought $650 million in revenue for the 2003 fiscal year.

• Company has begun to shift product lines with the aspiration to “think different.”

General Environment

• Constant innovations and product re-inventions as the consumer base shifts as well as the economy.– iPod (portable

music)– iMac (gaming &

power)

• Apple competes in the following industries:– Computer

• iBook• PowerBook• PowerMac

– Multi-Media• iMac

– Entertainment• iPod

Industry Environment

• Market Share:– Worldwide:

• Desktop- 6%• Portable- 10%

– Domestic:• Educational-

15.2%

• Annual sales for 2002 fiscal year were $1.5 bil– Down 27% from

previous year.

Porter’s 5 Forces:1. Buyers

• Set Prices

2. Suppliers• Reinvention of

supply chain• Cut down

3. Current Rivals• Dell, HP, Sony,

Toshiba

Industry Environment

4. Substitute Products

• Little/no direct substitutes but many competing products.

• Mac OS has no alternatives.

5. Threats of Entrants

• High barriers in industry• Apple is

established

• Marketing is Apple Computer, Inc.’s biggest survival factor.– Ads featuring

testimonials from PC users that have switched to Mac.

– New advertising ventures allow Apple to gain market share.

Industry Environment• In light of slight

decline in computer sales, Apple Computer, Inc. has put more emphasis on promotion of the iPod.– Mixture of both

computer and portable mp3 player sales allows Apple to remain profitable.

• Apple is planning to further enhance their switch advertising campaigns.

• Award-winning advertisements has created competitive edge.

• In order to stay competitive, Apple Computer, Inc. has created different versions of their operating system.

Competitor Environment• Creation of

peripheral products has created diversification.

• eMac– Educational products– Learning

applications– Portable computers

• Apple has maintained their ability to distinguish themselves from their competition.

• Apple’s has resources that are:– Organizational– Innovative– Technological

• Apple logo is easily identifiable to customers in the computer market.

Internal Environment• Internal

Capabilities:– Marketing

• Large budget

– Management Leadership

• Core competencies in high-quality hardware.

• Inventory system has given higher economies of scale.

• Outbound logistics has made it possible for Apple Computer, Inc. to meet the orders and demands of their customers.

• Technological development is a key support activity.

Internal Environment• Company vision is

to provide the best possible merchandise at the most reasonable price possible.

• Strategic Mission-Provide unique products which allows them to enter into new markets.– iPod– eMac

• Apple works hard to determine new ideas on how to gain market share in order to boost sales.

• Strategies:– Advertising– New Products– Technology

Innovation

Internal Environment• Objectives:

– Open new stores– Cooperative

branding– Educational

products

• Strong efforts in advertising, technology innovation and market share growth make Apple Computer, Inc. successful!

SynthesisAlternatives:• Tackle the low-end consumer market,

focused segmentation.• Offer an affordable system with an

innovative design.• Distinguished, Innovative.• Devise a strategy to convince

competitors’ customers to

switch to Apple and retain current customers.

•Successful company•Favorable Brand Perception•Brand-loyal customers•Recognizable logo•Creative advertisements/promos•MP3 Innovations•Well established product lines•Brick and mortar locations

•Declining market shares•Heavily saturated industry•Proprietary software system•Low popularity overseas•Increasing different operating system

•Educational materials/ software•MP3 device expansions•Software designs

•Competition in MP3 industry•Competition in computer industry•High substitution rate •New Entrants

SWOT Analysis

• Apple has to concentrate on gaining market share from its competition if they want to maintain profitability in the industry.

• The expansion into new product lines is an opportunity that they are exploring, and they are slowly starting to gain some of this market share from the competition.

• They should use their cash assets that they have in excess to sponsor this growth in order to continue to keep this sales growth going.

T Sum It All Up…

Questions???

The End…