Professional Documents
Culture Documents
Formulation Presentation
March, 7 2008
Mathew Lugo, Brooks Johnston, Jessica-Anne Stoudemire, Kerri Barringer, & Ben Ponds
Executive Summary
Presented by: Kerri Barringer
Apple Profile
Products: Desktop computers, laptops, digital music players, software Markets: High-end, technology-savvy users Size: $8.3 billion in sales in 2004 Industry:
Key Players:
Keys to success:
Vision:
To be a leading innovator of new technologies that change the way people go about their daily
Operating Environment
Economic Factors Intense growth dependent on machines Demand for product services & support Social Factors Wireless communication Powerful & portable devices Political Factors Copyrights protection Technological Factors Strong rivalries among top competitors Continuously changing products Ecological Factors Pollution Corporate Social Responsibility Summary Product support services Powerful & portable devices
Industry Analysis
Presented by: Matt Lugo
Innovation; First to enter the market Competitors with similar products Forward Integration
2. Substitute Products
3. Powerful Suppliers
4. Powerful Buyers
Backward Integration
Advanced Knowledge Capital Requirement
5. Threat of Entry
Multi-Media Peripherals
Apple needs to focus on product differentiation to avoid becoming a lowmargin commodity, especially in terms of digital music and communications.
General Administration:
Identify new-product market opportunities & environmental threats, public image & corporate citizenship Recruit, train, motivate, challenge, and promote the most talented employees Good relationship with suppliers,
Procurement
First computer software company to negotiate with RIAA to allow consumers to legally download music online Main objective is to be the leading innovator of new technologies that change the way people live their daily lives Identify specific customer segments and needs, develop an image and reputation of quality, innovative advertising
800,000
600,000
400,000
200,000
-400,000
-600,000 Years
9,000,000
8,000,000
7,000,000
6,000,000
3,000,000
2,000,000
1,000,000
10
Percent
-20
-25
-30
-35 Years
Current Ratio
4
3.5
2.5 Apple
Years
Dell HP Industry
1.5
0.5
1.5
0.5
-0.5
-1
-1.5
Revenues/Total Assets
2.5
Year
0.5 0 2000 2001 2002 2003 2004
SWOT Summary
Strengths:
Innovation; first to enter the market Product & Market Development Customer and Product Services Strategic Alliances with leading communication firms Forward integration Becoming a low- end commodity
Weakness:
Opportunities:
Threats:
5-year Expectations
By 2010 most cell phones will have mp3 capability. High quality customer support services will be in great demand.
Competitive position
Add brick & mortar locations that focus on training clinics to use Apple products, service their product problems, Apple Geek Squad, etc
Entrenched in professional media creation markets, provide fundamental intellectual property to be used in consumer oriented software
Keys to Success
International
Country specific economic, social, political, technological, and ecological factors Challenge in negotiating contract terms & copyright agreements Finding multiple component suppliers
Strategic Alliances
Focus on product development and differentiation in areas of digital music and communication Global brick & mortar locations that focus on quality support services (training and tech support)
Computers
Cons:
Larger market than focus differentiation High customer loyalty Reputation for innovative products
No cost advantage Hard to sustain due to imitation Could achieve greater differentiation with focused marketing
Cons:
Ability to meet targeted segments needs Ability to adapt to segments changing needs or demands High customer loyalty within segment
Less opportunities for growth Targeted segments demand has large impact on revenue Non-focus oriented competitors can better compete in pricing
Strategic Choice
In order to achieve the long term objective of technological leadership it is recommended that Apple establishes a strategic alliance with a leading communication provider