Strategic Management case study.

1. 
Case Study: Apple Inc.
Lujain
Aisha
Sakira
Farida
Maryam
Khadijah
Aida
Safiza

2. Introduction
Steve Wozniak and Steve Jobs dropped out of
college in 1976 and established Apple.
Steve Wozniak found a way to make long-
distance phone calls from building boxes.
Apple I, Apple 2e, Apple 2c, iPod, iPad.
Operates 233 stores in the USA and 84 stores
internationally.

3. Mission Statement (Actual)
Apple ignited the personal computer revolution in the
1970s with the Apple II and reinvented the personal
computer in the 1980s with .the Macintosh. Today ,Apple
Inc continues to lead the industry in Innovation with its
award-winning computers, Os X operating system and I
life a professional applications. Apple Inc. is also
spearing the digital media revolution with its IPod
portable music video players and ITunes online store and
has entered the mobile phone market with its
revolutionary I phone.

4. Vision Statement (Actual)
+ =
“An Apple computer on every desk”.
Steve Jobs
“Don’t follow you customers; lead them”.
“Temper engineering with art”.
“Clear your mind and think different”.

5. Vision Statement Actual (Cont.)
Environmental values:
“Communicate environmental, health, and safety
policy and programs to Apple employees and
stakeholders”.
Design manage, and operate our facilities to maximize
safety promote energy efficiency and protect the
environment.

6. Proposed mission statement
Apple will continue to provide revolutionary and innovative products (4)
to the customer electronics industry (1) by meeting their expectation of
high quality products such as the iPhone and iPad (2). We will also
make every effort to give back to the society by providing best in class
service and support (7); recognize our responsibility to the global
citizen (8) and to our employees (9); strive to reduce the environmental
impact of the work we do and the products we create.
Proposed vision statement
To be the global leader in the consumer electronic industry.
Mission & Vision (Proposed)

7. The 5-Forces Model of Competition
Rivalry Among Competing Firms
• Competitors- Dell,HP, Microsoft
• Disadvantages as a first mover
• Others competitors also offer wide range of products
• Do not offers other services
Potential Entry Of New Competitors
• Forces that shape competitive structure
• Lead entrance of many competitors
• High brand recognition

8. Potential Development Of Substitute Products
• E.g- HP, DELL, HTC
• Produce own substitute
• Switching cost decreased due to cheaper price offered by other competitors.
Bargaining Power Of Suppliers
• Determine by number of suppliers
• Suppliers have more bargaining powers
• Backward integration
Bargaining Power Of Consumers
• Developed high brand loyalty
• Target customers who emphasize on quality

9. Competitive Profile Matrix (CPM)
APPLE’S HP DELL
Critical
Success
Factors
Weight Rating Score Rating Score Rating Score
Market share 0.10 3 0.30 2 0.20 3 0.30
Price 0.10 4 0.40 3 0.30 3 0.30
Financial
position
0.15 4 0.60 3 0.45 3 0.45
Product
quality
0.15 4 0.60 3 0.45 3 0.45
Customer
loyalty
0.15 4 0.60 4 0.60 3 0.45
Advertising 0.04 3 0.12 2 0.08 3 0.12
Management 0.08 4 0.32 3 0.24 3 0.24
Global
Expansion
0.08 3 0.24 2 0.16 3 0.24
Innovation 0.14 4 0.56 2 0.28 2 0.28
Web
Development
0.05 3 0.15 2 0.10 3 0.15
Total 1.00 3.89 2.86 2.98

10. IFE Matrix

11. EFE Matrix

12. SWOTAnalysis
STRENTGHS
1.First mover of innovative products.
2.No long-term debt.
3.Superior operating system, not as
vulnerable to virus attack.
4.Strong quarterly rev growth of 82.7%
exceeding industry’s average of 24.3%.
5.Procure deals with major music labels.
6.Store formats adapt to the demand in
that specific market.
7.Employed knowledge workers to
provide prod advice, service and
training.
WEAKNESSES
1.Its operating system is only available
in Apple products.
2.Mac software has limited share of the
market.
3.Products are limited to technology
hardware and software.
4.Low sales volume via website.
OPPORTUNITIES
1.Greater sales growth percentage in
America compare to Europe.
2.Greater profit in Europe compare to
America.
3.Highest revenue generating product is
the iPhone.
4.Microsoft OS is more vulnerable to
virus.
5.Annual growth in revenue in Europe
and Asia Pacific more than 50%.
6.Increasing number of users using the
internet.
THREATS
1.Dell utilizes JIT, internet, advantage in
quality control, use direct sales.
2.Microsoft OS is available in all
computers, provides consulting
services and business application.
3.Financial risks of being a first mover.
4.Replication of products/ illegal file
sharing sites.
5.Virus threats.
6.Low demand for fee-based music
services/uncertainties in demands of
new products.

13. SO Strategies:
Stock new products to
Europe and Asia the same
time as in America (S1
O6)
Constant R&D to protect
OS from viruses (S3 O4)
WO Strategies:
Priced at competitive
prices in its top market
(W2 O6)
SWOT Analysis (Cont.)

14. SWOT Analysis (Cont.)
ST Strategies:
Release new products to Europe
and Asia Pacific the same time it is
released in America (S1 T1)
Develop 1 product for business
application and test it out (S1 T2)
Conduct market research to mitigate
financial risks (S2 T3)
Introduce 1 legal department to
collect damages in infringed on
patents (S1 T4)
Provide good after-sale services to
entertain customer complaints (S1
T6)
WT Strategies:
Create accessibility to
stores

15. Commercial Break

16. Positioning Map
High
Price – expensive
High
Quality
Low
Low
Smartphone's

17. Positioning Map (Cont.)
High
Price – expensive
High
Quality
Low
Low
Laptop’s
Tablet’s

18. SPACE Matrix
5.50-4.00
5.00
6.00
5.00
6.00
Growth potential
Profit potential
Financial stability
Ease of entry into market
Average industry position
-5.00
-4.00
-4.00
-3.00
Product quality
Customer loyalty
Technological know-how
Control over suppliers and
distributors
Average competitive position
Industry Position (IP)Competitive Position (CP)
-3.005.50
-2.00
-3.00
-3.00
-4.00
Technological change
Price range of competing products
Competitive pressure
Barriers to entry into market
Average stability position
6.00
5.00
5.00
6.00
Increment in net sales
Increment in earnings per share
Return on assets
Revenue
Average financial position
Stability Position (SP)Financial Position (FP)
5.50-4.00
5.00
6.00
5.00
6.00
Growth potential
Profit potential
Financial stability
Ease of entry into market
Average industry position
-5.00
-4.00
-4.00
-3.00
Product quality
Customer loyalty
Technological know-how
Control over suppliers and
distributors
Average competitive position
Industry Position (IP)Competitive Position (CP)
-3.005.50
-2.00
-3.00
-3.00
-4.00
Technological change
Price range of competing products
Competitive pressure
Barriers to entry into market
Average stability position
6.00
5.00
5.00
6.00
Increment in net sales
Increment in earnings per share
Return on assets
Revenue
Average financial position
Stability Position (SP)Financial Position (FP)

19. SPACE Matrix (Cont.)
 Conclusion:
 Directional Vector Coordinates:
x-axis (CP + IP): -4.00 + (+5.50) = 1.50
y-axis (FP + SP): +5.50 + (-3.00) = 2.50
 Apple should pursue aggressive strategies.

20. CompetitiveDefensive
AggressiveConservative
CompetitiveDefensive
AggressiveConservative
1 2 3 4 5 6 7-7 -6 -5 -4 -3 -2 -1
-1
-2
-7
-6
-5
-4
-3
7
6
1
2
3
4
5
(1.50, 2.50)
SPACE Matrix (Cont.)

21. Grand Strategy MatrixWEAKCOMPETITIVEPOSITION
STRONGCOMPETITIVEPOSITION
SLOW MARKET GROWTH
RAPID MARKET GROWTH
Quadrant IVQuadrant III
Quadrant I
1. Market penetration
2. Product development
Quadrant II
Quadrant IVQuadrant III
Quadrant I
1. Market penetration
2. Product development
Quadrant II

22. EFESCORES
IFE SCORES
STRONG
3-4
AVERAGE
2-2.99
WEAK
1-1.99
HIGH
3-4
I II III
MEDIUM
2-2.99
IV V VI
LOW
1-1.99
VII VIII IX
The IE Matrix

23. Liquidity Ratios
Current Ratio
0
0.5
1
1.5
2
2.5
3
2009 2010 2011 2012
Current Ratio for Apple
Current Ratio for HP
Current Ratio for Dell

24. 0
0.5
1
1.5
2
2.5
3
2009 2010 2011 2012
Quick Ratio for Apple
Quick Ratio for HP
Quick Ratio for Dell
Liquidity Ratios
Quick Ratio

25. 0
5
10
15
20
25
30
35
2009 2010 2011 2012
Fixed Assets Turnover for Apple
Fixed Assets Turnover for HP
Fixed Assets Turnover for Dell
Activity Ratios
Fixed Assets Turnover

26. 0
0.5
1
1.5
2
2.5
2009 2010 2011 2012
Total assets turnover for Apple
Total assets Turnover for HP
Total Assets Turnover for Dell
Activity Ratios
Total Assets Turnover

27. -15
-10
-5
0
5
10
15
20
25
30
2009 2010 2011 2012
Net Profit Margin for Apple
Net Profit Margin for HP
Net Profit Margin for Dell
Profitability Ratios
Net Profit Margin

28. -15
-10
-5
0
5
10
15
20
25
30
35
2009 2010 2011 2012
Return on Total Assets for Apple
Return on Total Assets for HP
Return on Total Assets for Dell
Profitability Ratios
Return on Total Assets

29. Quantitative Strategic Planning Matrix (QSPM)

30. STRATEGIC ALTERNATIVE
Key Factors Market Penetration Product Development
Weight
Attractiveness
Score (AS)
Total
Attractiveness
Score (TAS)
Attractiveness
Score (AS)
Total
Attractiveness
Score (TAS)
Strengths
First mover of
innovative products
0.09 4 0.36 4 0.36
No Long-term debt 0.11 3 0.33 4 0.44
Superior operating
system
0.06 4 0.24 3 0.18
Strong quarterly
revenue growth
0.15 3 0.45 3 0.45
Procure deals with
major music label
0.10 3 0.30 4 0.40
Store formats adapt
to the demand
0.09 3 0.27 4 0.36
Employed knowledge
workers
0.09 3 0.27 4 0.36
Weaknesses
Its OS only available
in Apple products
0.05 2 0.10 1 0.05
Limited to
technology hardware
& software
0.07 2 0.14 2 0.14
Mac Software has
limited share of the
market
0.09 1 0.09 2 0.18
Low sales volume via
website
0.10 1 0.10 2 0.20
Subtotal 1.0 2.65 3.18

31. Opportunities
Greater sales growth percentage in
America
0.15 4 0.6 3 0.45
Greater profit in Europe 0.10 3 0.30 4 0.40
Highest revenue generating product 0.13 3 0.09 4 0.12
Microsoft OS more vulnerable to
virus
0.05 2 0.10 3 0.15
Annual growth in revenue In
Europe and Asia Pacific
0.09 4 0.36 3 0.27
Increasing number of user using the
internet
0.05 2 0.10 4 0.20
Threats
Dell utilizes JIT, Internet,
advantage of quality control, use
direct selling
0.13 4 0.52 3 0.39
Microsoft OS is available in all
computers
0.05 2 0.10 3 0.45
Financial risk of being first mover 0.07 2 0.14 3 0.21
Replication of products/ illegal file
sharing sites
0.10 3 0.30 2 0.10
Virus threats 0.03 3 0.09 2 0.06
Low demand for fee based music
services/ uncertainties in demands
of new products
0.05 3 0.15 2 0.10
Subtotal 1.00 2.85 2.90
Total 5.50 6.08

32. Recommendations & Justifications
Apple’s products are of high quality and high price, the
company needs to continually innovate and come up with
new products to defeat its competitors.
The company needs to improve its website sale system to
create convenience for its customers.
Apple has the fast mover advantage, hence they need to
continue with that spirit.

33. Islamic Perspective
Islamic view of fair trade includes transparent management and relations
that aim to promote fairness and respect between trading partners.
Muslims are encouraged to participate in markets with a consciousness of
God in mind; they are required to be just and help their brothers and
sisters provide for themselves. Muslims are able to take a positive
measure to avoid unfair competition if they take into account the teaching
of Islam and abstain from the prohibition of Allah.
Allah stated in the Qur’an: “God loves those who are fair and just”
(Qur’an, 49:9).
According to the Prophet (p.b.u.h.), “the best earnings are from a blessed
sale and the product of a man’s own hands.” A sale would not be
considered to be a “blessed one” if it has an element of deception or
cheating of any sort in it; the character of a Muslim trader must be upheld
at all times.

34. The End
“Being the richest man in the cemetery
doesn't matter to me. Going to bed at
night saying we’ve done something
wonderful … that’s what matters to me.”
Steve Jobs