03.

Internal Environment
3.1. Corporate Structure
The company was committed to bringing the best user experience to its customers through its
innovative hardware, software, peripherals, services, and Internet offerings. The companys
business strategy leveraged its unique ability to design and develop its own operating systems,
hardware, application software, and services to provide its customers new products and solutions with
superior
ease-of-use,
seamless
integration,
and
innovative
industrial
design.
The
company believed continual investment in research and development was critical to the development and
enhancement of innovative products and technologies. Apples corporate structure is one of the factors
contributing to the companys successful innovation. A firms corporate structure can create opportunities
for business growth. However, it can also impose limits on how the firm develops. In Apples case, the
corporate structure is mainly a traditional hierarchy, with some key elements from other types of
Corporate structure. The success of the company is linked to innovation and the leadership of Steve Jobs,
but its corporate structure is partly responsible for ensuring support for such leadership. Now, under Tim
Cooks leadership, Apple has made some small changes in its corporate structure to suit market and
industry demands.

3.2. Corporate Culture

As Apple was mainly into innovation, the company's policy was to keep things confidential. Secrecy was
built into the corporate culture and the company always maintained tight control over information.
Apples organizational culture is a key factor in the companys success. A companys organizational
culture determines capabilities in supporting changes, new policies and new strategies. In Apples case,
employees are effectively developed and integrated into an organizational culture that facilitates rapid
innovation. Such innovation is observable in terms of products like the iPhone, iPad, and Apple Watch.
While the companys organizational culture generally contributes to business strengths, it also imposes
limits and challenges to the firm. Nonetheless, Apple has been gradually fine-tuning its organizational
culture to properly match the dynamics of its business environment.

3.3. Organizational Activity Analysis

3.3.1. Marketing
Apple Incs marketing mix indicates how the company matches its business activities to market
conditions. This analysis of the firms marketing mix provides insights about how to effectively address
market conditions and the competitive landscape through appropriate products, distribution, promotion
and pricing. Apple continues to use its marketing mix in globally expanding the business through various
channels and with a growing product mix, along with an array of promotion strategies. As one of the most
admired companies in the world, Apple Inc. serves as an example of how the marketing mix can support
business success. The innovative marketing process gives a tremendous value to Apple.

Americas Mac net sales and unit sales increased 18% and 21%, respectively, during 2010 compared to
2009, largely due to strong demand for Mac Book Pro. The Americas segment represented 37% and 44%
of
the
companys total net sales in 2010 and 2009, respectively. The Americas segment represented
approximately 44% of the companys total net sales in both 2009 and 2008.During 2010.
Europe
Mac
net
sales
and
unit
sales
increased
32%
and
36%,
respectively, during the year due to strong demand for MacBook Pro and iMac. The Europe
segment represented 29% and 28% of the companys total net sales in 2010 and 2009,
respectively. The increase in net sales was due mainly to increased iPhone revenue and strong sales of
Mac
portable
systems,
The
Europe
segment
represented
28% and 25% of total net sales in 2009 and 2008, respectively.
During 2010, Japans net sales increased $1.7 billion or 75% compared to 2009. Mac net sales increased
by 8% driven by a 22% increase in unit sales due primarily to strong demand for MacBook Pro and iMac,
The Japan segment represented 6% and 5% of the companys total net sales for 2010 and 2009,
respectively. The Japan segment represented approximately 5% of the companys total net sales in both
2009 and 2008.
The Asia-Pacific segment represented 13% and 7% of the companys total net sales for 2010 and 2009,
respectively. Mac net sales and unit sales grew in the Asia-Pacific region by 4% and 17%, respectively,
due to increased sales of the MacBook Pro. The Asia-Pacific segment represented approximately 7% of
the companys total net sales in both 2009 and 2008.
Mac net sales and unit sales grew in the retail segment by 25% and 35%, respectively, during 2010. The
company
opened 44 new retail stores during the year, 28 of which were international stores, ending the year
with 317 stores open compared to 273 stores at the end of 2009. With an average of 288 stores
and 254 stores opened during 2010 and 2009, respectively, average revenue per store increased
to $34.1 million in 2010, compared to $26.2 million in 2009. The Retail segment represented 15%
and 16% of the companys total net sales in 2010 and 2009, respectively. The Retail segment represented
15%
and 16% of the companys total net sales in 2010 and 2009, respectively.
3.3.2. Finance
The financial performance of Apple is very fantastic in 2008-2010. Where the net sales increase $42,905
to $65,225 in 2009 to 2010 which is 52% more. and slesw of 2008 is $37,491 which is incrse 14% in
2009. The following day, Apple shares hit $97.80, an all-time high at that point. In May, Apples share
price passed the $100 mark. Despite Jobs absence, Apple recorded its best non-holiday quarter (q1 FY
2009) during the recession with revenue of $8.16 billion and a profit of $1.21 billion.
During 2010, net sales in the Americas segment increased $5.5 billion or 29% compared to 2009. This
increase in net sales was driven by increased iPhone revenue During 2009, net sales in the Americas
segment increased $2.4 billion or 15% compared to 2008.

During 2010, net sales in Europe increased $6.9 billion or 58% compared to 2009. During 2009, net sales
in Europe increased $2.6 billion or 28% compared to 2008.
During 2010, Japans net sales increased $1.7 billion or 75% compared to 2009. Japans net sales
increased $551 million or 32% in 2009 compared to 2008.
Net sales in Asia-Pacific increased $5.1 billion or 160% during 2010 compared to 2009. Net sales in AsiaPacific
increased $493 million or 18% during 2009 compared to 2008, reflecting strong growth in sales
of iPhone and Mac portable systems.
Retail net sales increased $3.1 billion or 47% during 2010 compared to 2009. The increase in net sales
was driven primarily by strong demand for iPad, increased sales of Mac desktop and portable systems,
and a significant year-over-year increase in iPhone revenue. average revenue per store increased to $34.1
million in 2010, compared to $26.2 million in 2009. The Retail segment represented 15% and 16% of the
companys total net sales in 2010 and 2009, respectively. Retail net sales decreased $636 million or 9%
during
2009
compared
to
2008.
The
decline
in net sales was driven largely by a decrease in net sales of iPhones, iPods, and Mac desktop systems,
offset partially by strong demand for Mac portable systems. The company opened 26 new retail stores
during 2009, including 14 international stores, ending the year with 273 stores open. This compared to
247 stores open as of September 27, 2008. With an average of 254 stores and 211 stores opened during
2009 and 2008, respectively, average revenue per store decreased to $26.2 million for 2009 from $34.6
million in 2008.
3.3.3. Human Resources Management
Apple has a brilliant HRM policy. It always works as team. Due to the expert HRM system they had
achieve their goal.
As of September 25, 2010, the company had approximately 46,600 full-time equivalent employees and an
additional 2,800 full-time equivalent temporary employees and contractors.
3.3.4. Research and Development
Apple always tries to made different product. And the RnD department works to do it. Because the
industries in which the company competed were characterized by rapid technological advances, the
companys ability to compete successfully was heavily dependent upon its ability to ensure a continual
and timely flow of competitive products, services, and technologies to the marketplace. The company
continued to develop new products and technologies and to enhance existing products that expanded the
range of its product offerings and intellectual property through licensing and acquisition of third-party
business and technology. Total research and development expense were $1.8 billion, $1.3 billion, and $1.1
billion in 2010, 2009, and 2008, respectively.
3.3.5. Competitive Advantages
The company was confronted by aggressive competition in all areas of its business. The markets for the
companys products and services were highly competitive. These markets were characterized by frequent
product introductions and rapid technological advances that had substantially increased the capabilities
and use of personal computers, mobile communication and media devices, and other digital electronic

devices. The companys competitors who sold personal computers based on other operating systems had
aggressively cut prices and lowered their product margins to gain or maintain market share. The
companys financial condition and operating results could be adversely affected by these and other
industry-wide downward pressures on gross margins. The principal competitive factors included price,
product features, relative price/performance, product quality and reliability, design innovation,
availability of software and peripherals, marketing and distribution capability, service and support, and
corporate reputation. The company was focused on expanding its market opportunities related to mobile
communication and media devices, including iPhone and iPad. The mobile communications and media
device industries were highly competitive and included several large, well-funded, and experienced
participants. The company expected competition in these industries to intensify significantly as
competitors attempted to imitate some of the iPhone and iPad features and applications within their own
products or, alternatively, collaborate with each other to offer solutions that were more competitive than
those they currently offered. These industries were characterized by aggressive pricing practices, frequent
product introductions, evolving design approaches and technologies, rapid adoption of technological and
product advancements by competitors, and price sensitivity on the part of consumers and businesses. The
companys iPod and digital content services faced significant competition from other companies
promoting their own digital music and content products and services, including those offering free peerto-peer music and video services. The company believed it offered superior innovation and integration of
the entire solution including the hardware (personal computer, iPhone, iPad, and iPod), software (iTunes),
and distribution of digital content and applications (iTunes Store, App Store, and iBookstore). Some of
the companys current and potential competitors had substantial resources and may have been able to
provide such products and services at little or no profit or even at a loss to compete with the companys
offerings. Alternatively, these competitors may have collaborated with each other to offer solutions that
were more integrated than those they currently offered. The companys future financial condition and
operating results were substantially dependent on the companys ability to continue to develop and offer
new innovative products and services in each of the markets it competed in. In 2010, only AT&T was the
carrier for the iPhone. Verizon began selling a version of the iPhone in early 2011. AT&T activated 11
million iPhone accounts in the first nine months of 2010. Before Verizon, the iPhone had been exclusive
to AT&T since its launch in 2007.
3.4. Core competences of Apple
The core competencies of Apple are robust. It is very hard to imitate the Apple products and this gives it
the edge over its competitors. It has a closed proprietary system, which makes sure for Apple that there is
no evasion of its skills and its secret recipe. On the other side Apple is very consistent in its product
portfolio development. If any company no matter how successful is, divert its business altogether or try to
diversify too much in product line than there are chances that it will lose its core competency. Its
innovative designs and technology based on software. The latest batch of Apple products includes
iPhones, iPad and iPod with more innovative features and colors. It has been observed that Apple has
been emphasizing more on developing competencies not limited to technology only. With this approach
they were thriving to achieve extreme form of technical development and in doing so customer
orientation was also not ignored. Every effort were made to developed their products based on
differentiation
3.5. Summary of Internal factors
Apple is a huge technology company and, as a result, it has many strengths and weaknesses. One major
strength that Apple has is total control of their products. Apple designs and builds that hardware and
software for all of their products. Apple is able to design their software to take advantage of the specific
hardware that they use. They do not have to support many different hardware components, just their own.
Apple makes all their products effortlessly work with each other. When customers first use Apple's

products they usually note how easy they are to set up and use. As they get used to Apple's products they
really like the user interface and overall experience. Apple also has some weaknesses. One weakness is
that they only have one phone and one tablet on the market. Apple releases the iPhone and iPad on a one
year cycle. Apple's iPhone and iPad have to compete against hundreds of other tablets and smart phones
that are constantly being released by it's competitors. Apple has to be able to create revolutionary products
that will still be up-to-date and current in the market a year from now. App Store is a weakness because
Apple decides what application you can run on your devices. Some people also consider Apple to be a
company that charges large amounts of money for inferior products.