Apple

Apple Products

3

Apple communicates (Brand Promise) its core values clearly and is able to satisfy the consumers which leads to Brand bonding. The Brand Bonding among Apple users are very strong.

Apple products have the following attributes:- Simple-Elegant- Exclusivity- Innovative- Extraordinary

4

Apple has been consistent and has kept everything simple. The consumer has a great bonding with the brand because of this simplicity. But it is not just the simplicity that catches the attention, it is exclusivity and innovation.

The logo was changed to a simpler version – staying in tune with it core values.

The tag line “ Think different”-People want to be unique and feel special and Apple has been very successful in being innovative and making the consumer feel special.

- The name Apple – shows a connect with Steve Jobs younger days and his experience. The same has be done with all apple products it is an experience which lingers with all the Apple users.

Vision

"To make a contribution to the world by making tools for the mind that advance humankind"

Mission

“We believe that we need to own and control the primary technologies behind the products we make, and participate only in markets where we can make a significant contribution.”

Business Strategies

• Lock the customer in

• Become “The Name”iPod, iTunes, iPhone, iCloud and iPad by Apple gave new directions to electronics, music and software market

125 m iTunes accounts linked with credit card. For iTunes it alliance with Sony BMG, EMI, Universal and Warner Bros., partnered with Google and YouTube for iPhone.

Business Strategies

• Sell at PremiumThey set their pricing strategically to a market that can bear the cost. They justify their price with features and benefits that can’t be matched

• Product Positioning

Hype in the surrounding for Apple products was created due to unique advertisements, word of mouth , look and designs

Business Strategies

• Think differentUsage of innovative technology and design. Updating it every 4 months of the products software and hardware

• Simplicity of choice Simplified Apple’s product mix in terms of

4 lines of desktops and portable computers designed for both professional and consumer markets

Competitive Advantage

Communicate in the Language of Your Audience

Series of strategic alliances

Simplicity and user friendly

Quality of Apple products

Innovations

Launch of iTune & iCloud

STORES AND DISTRIBUTION

It has 274 stores which give high visibility. It has 3000 resellers which have high service level and more capillary distribution It has 320 large distributions which drive huge volumes of traffic and its absence of differentiation avoided through corners. It has on-line stores in 36 countries which has visibility web and worldwide, and give mass atomization for customers.

Forward Integration

The company increased its retailer stores from 0 to 300 over a decade.

iTunes is in alliance with Sony BMG,EMI,Universal and Warner

Bros., partnered with Google and Youtube for iPhone.

Backward Integration

The company had developed a strong supplier chain for easy

availability of the input material for production process.

Acquired microprocessor company PA semi known for highly

sophisticated and low price chips.

Integration

Mobile Market Share

21%

22%

3%8%

4%2%2%2%2%

34%

MARKET SHARE

NOKIASAMSUNGLGAPPLEZTERESEARCH IN MOTIONHTCMOTOROLASONYOTHERS

Computer Market Share

Dell28%

HP24%

Gateway6%

Apple6%

Toshiba

5%

Acer5%

Others26%

Market Share

Smartphone Market Share

37%

22%

27%

10% 3% 2%

Market Share

Android OS

RIM Blackberry OS

Apple OS

Microsoft Windows

Palm/ Web OS

Symbian OS

Apple’s Market Share In Developed countries

BCG MATRIX

Question markStars

IPHONE

Cash Cow Dogs

IPOD

MACMarket share

High

Low

Market GrowthLowHigh

APPLE TV

PESTEL

SWOT ANALYSIS

Strength

• High quality and attractive products• Leadership in electronic industry and high technology• Leading the product design,• Creative employees,• Good relationship with customers.• Diversity products

SWOT ANALYSIS

Weakness

• Limited compatibility• Limited market• Limited distribution channels• Suppliers pollution issue

SWOT ANALYSIS

Opportunity

• New retail stores• Smart phone

SWOT ANALYSIS

Threats

• Hard to maintain leadership in the industry• Serious competition• Serious piracy in China• Chinese government is pressuring to oversea companies

SWOT ANALYSIS

PORTERS 5 FORCE

PESTEL

POLITICAL

• It is reported that in 2007, 52% of sales of Apple were from outside America. Bad internationalrelations, wars and terrorism might influence Apple in a huge manner; moreover these are all factorsApple has no ability to control.Apple Inc. produces many of its parts and products outside the U.S., like Ireland, Czech Republic,Korea, China, and Cork. Political Conflicts between the U.S. and any of these states may have awful outcomes for Apple Inc.

ECONOMIC

The global economic depression might have immense impact on Apple Inc. The inflation rate is high, while consumer’s incomes didn’t have significant changes, moreover the unemployment rate has increased, leading consumers to spend less, especially on ‘luxury products’, as Apple products might be viewed. Even though the U.S. dollar has lost value, Apple Inc. is not as endangered economically. The corporation has purchased itself foreign currency, to minimize the economic effects of inflation on Apple Inc. It needs to be said that the U.S. dollar’s depreciation has in fact increased Apple’s revenue in the international market.

SOCIAL

• Globalization includes the interaction of people worldwide, for which technology plays the main role. Today’s World cannot be imagined without technological devices as Computers, mobile phones etc. Apple is the globally seen as the King of technology, not because of most usage, but quality and design.

• Another big social influence is the music industry, which over the last decade has become virtual and set its market to the cyberspace. Apple having developed the biggest virtual media store, iTunes, is well ahead any other competition of this direction. Web piracy might be a threat, but most governments punish those behaviors.

TECHNOLOGICAL

• The technology market for computers and mobile phones has become huge, adding more competition in the market. Also technology innovations and changes are almost as fast as light, therefore the products lifecycle is very short.

• Investing largely in Research and Product Development, Apple is on top of the market, regarding innovative products. This includes making the work for the competition to follow, but it’s still better because innovation is a big part of the brand and has shown to pay out.

ENVIRONMENTAL

• The list, which is compiled by Greenpeace and released in San Francisco on Thursday, shows that the company relies heavily on highly polluting coal power at the sites that house its banks of servers

PORTERS 5 FORCE

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EXISTING RIVALRY

Windows OS and media player for playing music and video ( Microsoft)

Competition to Mac OS X (Linux)

Alternate sources of computer hardware (Dell, HP, Lenovo)

Small stylish MP3 players (Creative, Samsung, Sony)

Online music stores similar to itunes stores (Napster)

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THREAT OF NEW ENTRANTS

Streaming audio and video with v-cast (Verizon)

On demand online services (similar to i-tunes)

New entrants with disruptive technology (The “next google”)

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BARGAINING POWER OF SUPPLIERS

Suppliers of processors and computer memory (Motorola, IBM, Intel)

Strategic alliance/supplier of Mac (Microsoft)

Supplier of tv and movies (Disney, ABC, Fox, Sony)

Sources of music (BMG, Sony, Warner, Universal)

Magazine :outlook (April-2009)

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BARGAINING POWER OF CUSTOMERS

Customers share music using peer-to-peer networks without paying for music (Ares, Limewire)

Retailers may pressure for lower prices or better terms (Distributors)

Consumers/Businesses may reduce spending on computers if they fear economic downturns (Consumer Attitudes & Behaviors)

Consumer Refresh Cycles

Sources: Harvard Business review -09

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THREAT FROM SUBSTITUTES

Satellite radio for music (XM, Sirius)

Entertainment media, media and music (XBOX, PS2)

Alternative means to acquire music (Music CDs, DVDs)

Alternative sources for videos (Cable, Broadcast, Theatres)

Magazine :PC-1 (April-2009)

Financial Analysis

Year Profit

2008 6119

2009 8235

2010 14013

Profit

COMPANY 2009 2010 2011

APPLE 2.74 2.01 1.608

SAMSUNG 1.59 1.45 1.46

Current Ratio (C.A /C.L)

Quick Ratio ((C.A – Inventory) / C.L)

COMPANY 2009 2010 2011

APPLE 2.7 1.96 1.6

SAMSUNG 0.59 0.67 0.72

LIQUIDITY RATIO

Debt to equity ratio (T.Debt / S.H Equity)

COMPANY 2009 2010 2011APPLE 0.5 0.57 0.52SAMSUNG

Leverage Ratios

Inventory turnover ratio (Sales / Inventory )

COMPANY 2009 2010 2011

APPLE 94.29 62.06 139.49

SAMSUNG 18.36 18.60 17.72

Activity Ratios

Gross profit marginCOMPANY 2009 2010 2011

APPLE 40% 39.38% 40.48%

SAMSUNG 23.80% 30.53% 25.17%

Operating profit margin

COMPANY 2009 2010 2011

APPLE 27.36% 28.19% 31.22%

SAMSUNG 7.07% 13.30% 9.69%

Profitability Ratios

COMPANY 2009 2010 2011

APPLE $ 9.22 $ 18.41 $ 28.05

SAMSUNG 65194.00 88531.00 66806.00

Earnings Per Share

Coming This December 2012 in India Ipad Mini

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