Task Performance Analysis: Apple Inc.'s Strategic Management Report

This report provides a detailed analysis of Apple Inc.'s task performance within its strategic management framework. It begins with a company background and strategic posture, outlining Apple's mission, vision, and objectives. The report then examines the external environment using Porter's Five Forces, assessing threats of new entrants, substitutes, buyer and supplier power, and industry rivalry. An in-depth analysis of Apple's internal environment follows, focusing on marketing strategies (4Ps), operational efficiency, and technological development. The marketing section evaluates product innovation, promotion strategies, distribution channels, and pricing. The operations section explores inbound and outbound logistics, production processes, and technological advancements. The report concludes with a financial analysis, assessing profitability, efficiency, liquidity, and leverage through ratio analysis. The findings highlight Apple's strengths in product innovation, brand loyalty, and efficient operations, contributing to its market success. The report provides a comprehensive overview of Apple's strategic approach and performance.

TASK PERFORMANCE
IN
STRATEGIC MANAGEMENT
Submitted By
Bolanos, Ehya
Espejo, Regine
Lisano, Aliyssa
Maupoy, Abegail
Tasin, Yvan
Submitted To:
Honey Christine Rose Enrique

APPLE INC.
I. Company Background
a. Current performance
Strong financial results for its fiscal 2010 first quarter; no debt.
• Best quarter ever, recorded $15.68 Billion in revenue
• Reported $3.38 billion net revenue .
• 283 retail stores in 10 countries.
b. Strategic posture
A. The company designed, manufactured, and marketed a ranged of
personal computers, mobile communication and media devices, and
portable digital music players, and sold a variety of related software,
services, peripherals, networking solutions, and third-party digital content
and applications.
B. the company was committed to bringing the best user experience to
its customers through its innovative hardware, software, peripherals,
services, and internet offerings.
C. the company participated in several highly competitive markets,
including personal computers with its Mac computers; mobile
communications and media devices with its iPhones, iPads, and iPods
product families.

Mission:
A mission statement globally defines what business an organization is
in now and objectives of the organization. It is the fundamental factor
of a strategic plan. A mission statement can verbalize the beliefs and
the directions in which a visionary manager wants to lead an
organization. In general, mission statement address issues more
explicitly, and can also serve to identify what is unique about the
character of the organization.
Vision:
Over the past, Apple has recorded a recommendable performance
through invention and reinventions. The company is committed in
providing best computing experience to the users including educators,
creative professionals, students as well as the other consumers from all
over the world (Brainmass 2004). The company has managed to realize
this by providing high quality software, hardware, and internet offerings.
Objectives:
 To have good profit building with the help of maximizing profit.
 To become the world's admired and first company.

 To increase the market price and share of the company.
 To becomes the leading business organization in mobile and
computer market with the help
of Research and Technology, Administration of the company and
from the support of the
consumer.
 To be called as a unique brand in the world.
 To invent new technology this has all latest and useful software for
the benefit for the
 customer all over the world.
 To produce user friendly product for the customer so that they
cannot find difficulty to
 operate.
 To start more selling with the help of distributing channels.

 To widen the market and start to diversify into new market of
Automobiles.
 To give better quality product to the customer.
 To focus on the group of people who has never used Apple
products before.
 Always compete and sustain in the market from the competitors.
II. External Environment
a. Porter’s five forces
Threat of new entrants - The technological market is one that requires
high investment, especially in developing competitive R&D capabilities.
Comparing that with apple's superior technological capabilities, it would be
extremely difficult for a new entrant to come into the industry and compete
with Apple on this basis. Also, if a competitor tried to compete on the basis
of cost, there are several players in the industry who do so already. This
would not affect Apple materially due to their strategy of differentiation.
Apple retains its customers based on brand loyalty, not low costs. Also in
the technology industry, consumers prefer a well-known brand over new
ones, as these products are generally more expensive than commodity

items. Unless a new entrant develops a truly revolutionary product, which
would in turn require high investments, the threat of new entrants remains
low due to the high entry barriers into the industry.
Threat of substitutes - In terms of substitutes, some of apples products
are under this threat. A major product is the iPod. With devices being
increasingly integrated, cellphones and tablets come integrated with a
music player. This even holds true for apples own products. Apple‟s own
products can sometimes be substitutes for each other. Apart from that, its
iTunes software is under the greatest threat because there are various
other options than paying for media, and no one would pay for music and
videos if they are able to obtain them for free.
Bargaining power of buyers- Buyers in the technology industry have a
variety of options when making decisions. There are products in the
market that compete on cost, and products that charge a premium price
on the basis of differentiation. Since apple employs a differentiation
strategy, it is largely immune to this power. However, apple's prices are
only slightly above the industry's, due to an increasingly price sensitive
environment during the recession. Because of this, even its loyal
customers would not be able to afford its products if they were priced
above a certain premium.

Bargaining power of suppliers- In the case of Apple, which is currently
the most valuable brand in the world (Telegraph, 2011); suppliers are
eager to count Apple among its customers. Therefore, there are not
suppliers strong enough to pose a threat to Apple. Apple has two kinds of
suppliers. For its standard products, Apple purchases components from a
variety of suppliers. This puts them in direct competition with each other to
offer the best prices for a customer as valuable as Apple. For its custom
products, Apple either creates strong relationships or partnerships with its
key suppliers. Since apple focuses on high quality products, even if the
supplies are expensive, they are able to absorb these costs into the price
of the product. Thus, Apple is not greatly affected by the power of
suppliers.
Rivalry- This threat is a major one in the technology industry. There are
several players in the industry, who compete both on the basis of cost and
differentiation, and directly with each of Apple's products. Big industry
names such as Microsoft, Google and RIM all have brand names, and this
is threatening to the Apple brand on the whole. An example of the intensity
of competition can be seen as Apple overtook Google this year as the
most valuable brand in the world (Telegraph, 2011). With Google being at

the second position, Apple can expect to face stiff competition as they
fight to regain the number one spot.
III. Internal Environment
1. Marketing, 4Ps
a. Products Former CEO Steve Jobs of Apple has always maintained that
the first and most important of the Apple is creating innovative and
attractive products that are outstanding the customer’s expectation. Apple
always understood that the product is most important factor in the 4 Ps.
Apple's iPhone is revolution in mobile technology. Apple’s iPhone is
combination of working and multimedia entertainment. Besides, iPhone
allow customers to surf the Internet and push e-mails... So, iPhone is
collection the necessary features and advance technology in order to fulfill
anything that customers need. iPhones aim to enhance the interaction by
using a touchscreen interface. Everything is controlled by a touch screen.
In addition, Apple's iPhone was designed very clearly and beautifully.
Considered that iPhone is the perfect combination of design and
technology.
b. Promotion Television commercial, online ads and print advertisements
campaigns have been successful in promoting the Apple’s products and
services. Apple has a branding strategy that is emotions’ focused,

humorous and simplicity. The ads theme is about lifestyle; innovation,
imagination and aspiration. In addition, Apple has a secretive strategy
concerning new products or services in order to create suspension and
curiosity. Apple usually organizes press conferences to unveil the new
products. However, before the press conferences, they do many different
things to catch the special attention of customers. Actually, it is observed
that every new coming model always appear scandals before their official
introduction. Last but not least, the sales force at Apple Stores is trained
well so that they can increase the customer experiences, therefore
gaining more customers.
c. Place Apple has expanded the reach of the consumer in the form of
hundreds of new retail stores that it owns and operates all over the world
in the past ten years. It also has put everything from the iPhone and in
any shops selling electronic devices these days. Apple also apply the dual
distribution method, in which they create Apple Stores to offer products to
customers. Apple Stores are designed uniquely and professionally that
they can enhance the customer experiences when they come to see the
products.

d. Price The price was never one of the competitive advantages of Apple.
Prices of iPhones range from $549 to $749 for world edition. The price is
worth what the iPhones’ values bring to customers, including nice-design,
simplicity and convenience.
e. Findings:
The most important factor deciding the success of Apple’s marketing mix
is their products. Their products are perceived as the number one
smartphones in the world. The well-designed, simple, efficient with “best
of the best” innovative technology iPhones contributes to the great icon of
smartphone. In addition, advertising and using sale forces effectively help
promote iPhones to customers. Apple knows exactly how to raise curiosity
of customers before introducing the new products. This create good effect
for the promotional strategy Besides, the successful chain of Apple Stores
is also one of the parts supporting the success of Apple. The high
focused- customer service and well-design, spacious Stores increase the
customer experiences when customers come to visit the stores. Finally,
prices are not the key indicator of Apple’s iPhones. Thanks to the perfect
combination of functionality and designs, Apple charge a little high.
2. Operation
One thing that is absolutely takes part in the success of Apple is its
efficient operating system. Apple implemented operational management

as a competitive weapon. Therefore, Deep analysis about Apple’s value
chain will give some better understanding about the company’s operation
management.
a. Technological Development
Apple spends a really big amount of money on its Research and
Development in order to push innovation further then stay ahead of
competition. According to figures published in Apple’s 2012 annual
report, R&D expenditure hits 3.4 billion US dollars which is nearly
40% increase than 2011 (apple case study 14). Apple as well
protects its invention and innovation worldwide by filling patent.
b. Inbound Logistics
Apple has a partnership with OEM in order to reduce development
time, production, material and manufacturing costs. However,
Apple supervises the entire process to control its quality.
c. Production
Apple outsourced to various Chinese manufacturers with strict
requirements so that they can reduce the labor cost and eliminate
the burden of production management. Apple, also, cooperate with
other companies including HP and Samsung. Furthermore, Apple
designs its products in-house to eliminate production cost.
d. Outbound Logistics

Apple’s products are being delivered directly to its retail stores
around the world to minimize inventory cost. To trim down shipping
costs, Apple’s designing team developed packages that are slim
and light yet productive
3. Apple Financial Analysis
a. Ratio Analysis
 Profitability:
The gross profit margin was maintained stably, which was around
40%. Apple acquired the biggest GPM in comparison its
competitors (Samsung 32%). Thanks to the efficiency in cost
management as well as the stable growth in sales, ROE of Apple
were healthy and kept increasing from 29.3% in 2010 to 33.8% in
2011. Apple’s ROE is medium in comparison with its competitors
(HTC was around 60%).
 Efficiency: Inventory turnover was much improved from 52.51 in
2010 to 70.53. The increase in efficiency ratio, going together with
the strong increase in sales shows the much efficiency in inventory
management of Apple. Also, the increase in asset turnover from
1.06 in 2010 to 1.13 in 2011 shows the improved effectiveness of
Apple in generating revenue over its total assets.
 Liquidity: