Naren Nandi

i-ntroduction
Steve Jobs and Steve
Wozniak founded Apple
on April 1, 1976.
The two Steves, Jobs and
Woz (woz.org), have
personalities that persist
throughout Apples
products, even today.
Jobs was the
consummate salesperson
and visionary while Woz
was the inquisitive
technical genius.

Revenue$42.91billion
Operating income$11.74 billion
Profit$8.24 billion
AUM$26.83 billion
Total assets$47.50 billion
Total equity$31.64 billion
Employees 34,300+

PC industry
We can glean
Insight into the
history and
composition of the
PC Industry from
its eponymous
title.
In the late 1970s,
as Wozniak and
Jobs were starting
Apple computer,
personal
computers were an
emerging product.

Online music industry

While Apple clearly
dominates the online music
industry, the battle for
domination is not over.
Apples sales are between
66% and 75% of downloads
and 80% of music players.
Apple is part to a suit
alleging monopolistic practices
concerning their market share
dominance of players and

Products
Mac(Pro,MiniiMacM
acBook,Air,ProXserve
)
iPhone,iPad,iPod(Shuf
e,Nano,Classic,Touch)
Apple TV,Cinema
Display, AirPort
Time CapsuleMac OS
X(ServeriPhone
OS),iLife,iWork

Services
Stores(retail,online
,iTunes,App,iBooks
)
Mobile Me

Mission Statement
-> "Apple is committed to
bringing the best personal
computing experience to
students, educators, creative
professionals and consumers
around the world through its
innovative hardware, software
and internet offerings.

Vision Statement
-> "Man is the creator of
change in this world. As such
he should be above systems
and structures, and not
subordinate to them."

CORE COMPETENCY --- USER

EXPERIENCE

KEY SUCCESS
FACTORS

PORTERS FIVE FORCES

MODEL
1. VoIP
Skype
2. PDA phone
Palmtops etc.
3. Similar
features
phone
emerged in
Nokia, LG etc

1. Establish
mobile
manufacture:
Nokia,LG,Sam
sung
2. Software
giants:

1. Carriers
AT&T
2. OS
providers
like Linux
3.
Hardware
makers
Intel
1. More
companies
entering into
smartphones
market
2. Strong

SWOT ANALYSIS

How Green is Apple?

AppleInc.'s eye-catching logo - an
apple with a bite taken from it - has
come in many colors in the past.
Now, the iconic computer company
is trying to prove its commitment
to the color green
It now makes iPods and iPhones
free of polyvinyl chlorides and
brominated flame retardant, and
it's in the final stages of making all
of its products without bromine and
chlorine. Both chemicals have been
criticized for creating toxic
byproducts.

Work Ethics
Labour Standards
Working and living environments
Compensation
Overtime
Worker treatment
Apple has a zero tolerance policy for any
instance, isolated or not, of any treatment
of workers that could be interpreted as
harsh

Process Analysis

Inputs
Raw
material,
Customers,
etc.

Transformation
Process

Outputs
Goods,
Services

Resources:
Labor &
Capital

Key steps in Process

Analysis
Step 1: Draw process flow diagram
(define process)

Determine the inputs and outputs

Determine the flow units
Determine the tasks and their sequence
Determine which resources are used in each task
Determine where inventory is kept in the process
Record this through a process flow diagram

Step 2: Bottleneck Analysis (performance

evaluation)
Determine the capacity of each task and of the
process
Further analysis will be covered later in the course

Process Example iTunes

Music
Apple sells downloadable songs for $.99 ea.
Process:
Apple retains music files and printable material on a
server
Customers download all material, print labels and burn
CDs themselves

Benefits:
No physical inventory, no warehouse, low production
costs
Always meet demand

1.
2.
3.
4.
5.

Draw a process flow

diagram

Determine
Determine
Determine
Determine
Determine
process

the inputs and outputs

the flow units: orders in process
the tasks and their sequence
resources: computer server
where inventory is kept in the

Orders Review
Order
Finished
Order

WIP

WIP

Validate
Credit
Card
Download

WIP

WIP

Send
Confirmation

Example
Validate Order

WIP

Download

Finished
orders

Individual stages
Capacity rate:
Cycle time:

40 units / hr

30 units / hr

1.5 min

2 min

The (whole) process

Flow time:
Capacity rate:
Cycle time:

1.5 min + 2 min = 3.5 min

30 units / hr
2 min

(contd) adding an extra

server
for WIP
download
Finished
Download
Validate Order

goods

Download

Individual stages
Capacity rate:
Cycle time:

40 units / hr

60 units / hr

1.5 min

1 min

The (whole) process

Flow time:
Capacity rate:
Cycle time:

1.5 min + 2 min = 3.5 min

40 units / hr
1/40 hr = 1.5 min

Constraints
Industrial World Economic Slowdown
Apples dependency on Steve Jobs
health
Technological Limitations
MP3 Market is shrinking rapidly
iPod Market is saturated
iPhone Cannibalizes part of iPod
Sales

Alternatives
Do Nothing
-> Pro: No increased risk
-> Con: Continue being stagnant
Reposition the iPod
-> Pro: Increase the profit capability
of a Cash Cow
-> Con: Placing advertising money
into a lost cause

Alternatives
Renovate the Mac desktop line
-> Pro: More competitive with other desktops
-> Con: Repositioning into a Market that is
decreasing due to a global economic
slowdown
Create a netbook based on the MacBook Air
platform
-> Pro: Great for the psychology of the
company and shareholders, and stakeholders
-> Con: Expensive development in a
recession

JIT-Lean
Apple Computers implemented the just-in-time
global economy (JITGE) to streamline the
unnecessary steps and waiting time in the
delivery of its tailor-made iPod from 90 days to
90 hours
JITGE methodology, a combination of lean
manufacturing, just-in-time-delivery and supply
chain management had helped Apple
computers to minimise the cost of production
by manufacturing its products in low cost
economies. Apple manufactured the customised
iPods to meet the needs of individual customers
by following the lean manufacturing
methodology

Cultivate Your Elite

Apple focuses on atmosphere,
nurturing its best designers
behind opaque glass in a hidden
sanctuary with music playing in
the background.
Despite their favored status,
Apples creatives still have no
more insight into the companys
overall operations than an Army
private has into the Pentagon.
At Apple, new products are often
seen in their complete form by
only a small group of top
executives. This, too, works as a
strength for Apple

VALUE CHAIN ANALYSIS

Technology and product

design
This component represents the true core (no
pun intended) of Apples capability.
From being the first platform to run an
electronic spreadsheet (VisiCalc on the Apple II
Plus) to the first to establish a digital lifestyle
hub (the Macintosh product lines), Apples
history is rich with cutting-edge technology
development. (Linzmayer)
Apple drives to be the best, no simply the first
The best way to summarize the entrepreneurial
culture within Apple its very easy to be
different, but very difficult to be better.

Vertical Integration of
competitors
Sony is an example of a competitor with a unique
position against Apple. Sony Music supplies Apple
with many of the songs for iTunes. Sony also
creates a version of the Walkman portable music
player that is a direct competitor to the iPod. Sony
is attempting to vertically integrate forward
directly to the music buyer. Sony integrated their
music system into the Sony Walkman. Sony is
exclusively distributing certain songs on Mora.
Mora currently targets Japanese consumers. If
Sony can gain additional momentum (such as
collaborating with other record labels), their
service could present a formidable challenge to
iTunes in additional markets.

Production
Because Apple had long refused to
license its operating system to external
entities, the bundled packages of
Apple-developed hardware and
software became the cornerstone of
Apples production process..
While every product introduction has
not been a success ,Apple treats
component production as a natural
extension of the design process.

Sales and Marketing

We could simply title this section Steve
Jobs. Since his return as CEO in 1997,
Jobs personally unveils all new product
introductions, reviews corresponding
marketing campaigns, and approves
new product development guidelines.
Apple continued to command a market
premium for producing a better
mousetrap throughout its history.

Apple Computer Marketing Channel

Structure:
Apple Retail Store - Direct Channel
Producer

Consumer

Customers

Apple Computer Marketing Channel Structure:

Ingram Micro/Best Buy - Indirect Channel
Producer
Ingram

Wholesaler

Micro

Retailer

Best Buy

Consumer

Customers

Customer Service
How has Apple retained substantial cash
reserves during the explosive growth and
dominance of PCs worldwide? Apple created a
virtual love affair with their customer base by
delivering technically superior and aggressively
pursuing hardware and software updates.
Apple integrated their primary activities so well
that it is transparent to the consumer where
one activity begins and the other ends.
Although Apple employs many resources and
capabilities to support their primary activities
the most strategically relevant would be Legal
Services.

Awards
Business week
awards Apple A+
for quality of staff
and efficiency of
service
Apple won eight
product design
awards at CeBIT
conference.

Legal Services
In a market climate of constant change and
innovation, it is inevitable that the drive to
expand product and service offerings will subject
Apple to patent and copyright infringement
claims. The dispute over the Apple logo on its
iTunes Music Store, for example, continues
despite a previously reached settlement with
Beatles Apple Corps Ltd. in 1991.
There was a recent attempt to uncover the
identities of internal sources who leaked
confidential information about an unreleased
product to online media outlets in 2004.

Steve Jobs= Apple, Inc.

Apples Success is Related to Steve Jobs
Standards, Not Steve Jobs Himself.
Regular Rules Dont Apply
Micromanager
Intense Secrecy
Concentrated, Hard-Fought Innovation
Communicated Zeal
Radical Opacity

 Think Twice