STRATEGIC MANAGEMENT

Strategic Management: Apple Inc

Table of Contents

Introduction4

Business Strategy4

Operating Segments5

Apple's Product Diversification5

iMac, Mac mini, Mac Pro and Xserve5

MacBook, MacBook Air and MacBook Pro6

iPad6

iPhone7

Peripherals and Other Hardware7

iTunes and Other Music Related Products and Services7

Software, Services and Other Sales8

Innovation Management in Contemporary Business Environment8

Financial Analysis16

Financial Position16

Profitability Ratios16

Return on capital employed (ROCE)17

Gross profit margin17

Stock turnover18

Debtors Ratio18

Gearing Ratio18

Earnings per share ratio19

Marketing Analysis19

Market Structure19

Market segmentation19

Marketing Mix (4Ps)20

HRM Analysis22

Value chain Analysis24

SWOT Analysis25

Strengths25

Weakness25

Political Analysis26

Socio-Cultural Analysis26

Economic Analysis27

Technological Analysis27

Legal Analysis27

Threat of New Entrants28

Threat of Substitute Products28

Threat of Industrial Rivalry29

BCG Matrix29

Conclusion and Recommendation30

Appendix A33

Appendix B35

Appendix C37

Strategic Management: Apple Inc

Introduction

Apple continues to grow faster than industry in all categories. New manufactory plants and sales offices are continually introduced to regions in order to save time and cost. The exact relationship model provides the powerful differentiator for the company to deliver satisfaction to customers of all sizes and types. Apple has focused most of the resources to support large commercial and formal organizations segment to sustain its growth by delivering superior services over competitors. In fact, Apple sells more computer systems to business organizations than any other company in the world. To adapt market change, Apple extents product categories to consumer electronics for better growth opportunities.

Business Strategy

Apple is committed to providing its customers with an unparalleled user experience through superior ease-of-use, seamless integration, and innovative product lines. The Company also views constant research and development a key component to its competitiveness looking forward. Proof of this can be seen in Apple's financial statements as a 33.7% increase in R&D expenditures was reported during fiscal year 2010. Intent focus is also placed on the discovery and delivery of digital content and applications through iTunes.

Operating Segments

Apple, Inc. currently holds retail operations in eleven different countries, which it divides into five separate operating segments; the Americas, Europe, Japan, Asia-Pacific and retail sales. Though the majority of the Company's net sales generated within the Americas operating segment, Apple's concentration in the Asia-Pacific region has shown the highest levels of growth as countries with emerging markets like China continue to show increases in consumer demand for the high-tech devices Apple produces (Apple Inc, 2010).

Apple's Product Diversification

iMac, Mac mini, Mac Pro and Xserve

Apple's desktop product line will follow the overall market trend of declining unit prices and a decrease in demand for these less portable hardware solutions. We estimate that there will be an average annual decrease of 5.95% in net sales of the Company's desktop product line through 2018.

MacBook, MacBook Air and MacBook Pro

As consumer further transition from desktop to portable PC's, Apple's portable (laptop) computer sales will benefit. The proprietary OS X and iOS operating systems many current Mac users are familiar with will be a major catalyst in maintaining unit sales growth. While we estimate that unit sales growth for Apple's portable PC product line will average 14% annually, the decline in price per unit has resulted in a less than 1% growth in net sales estimates for this product line, in 2018.

iPad

The April 2010 release of Apple's iPad has since created a flurry ...