APPLE INCORPORATED

Submitted by:

Apple Jane D. Braganza

Ma. Abegail C. Comia

Marvi Ned Xigrid C. Cruz

Claira Lauryn A. Garcia

Gianne Antonette G. Tagamtam

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I. TIME CONTEXT:

2015

II. VIEW POINT:

Tim Cook - Chief Executive Officer of Apple Incorporated

III. V-M-V STATEMENT:

VISION: “We strive to provide users of Apple products the best experience possible

through innovative product designs and software.”

MISSION: “Apple designs Macs, the best personal computers in the world, along

with OS X, iLife, iWork and professional software. Apple leads the digital

music revolution with its iPods and iTunes online store. Apple has

reinvented the mobile phone with its revolutionary iPhone and App

Store, and its defining the future of mobile media and computing devices

with iPad.”

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 VALUES:

Apple’s core values that serve as guideline principles in making the best

products in the market are:

 Quality - aiming not about being the most but about being the best

 Simplicity - prides on simplicity, not on complexity

 Dominance - the need to own and control technologies used in making the

products

 Honesty - admit when wrong and the courage to change

 Goal-oriented - focusing on truly important and meaningful projects and

participating in markets with significant contributions

 Innovative - innovate in a way others cannot

 Excellence - not settling for anything less than excellence in every group in

the company

IV. CURRENT OPERATIONAL PLANS:

Management

1. Apple organizational structure is divisional-by-process design. The current

CEO of Apple Inc. is Tim Cook. In every process of Apple is a division directed

by a Senior VP directly reporting to the CEO. However, there is no president in

each of the division.

Marketing

1. Apple prides itself on well-trained and knowledgeable salespersons with

excellent customer service.

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 2. A part of apple strategy is its product’s simplicity, elegance and easy to use

features.

3. Apple Inc. sells its products throughout the world on its retail stores, online

stores, through the third party wholesalers and its direct sales force.

Operations

1. Apple Inc. designs manufactures and markets the personal computers along

with other mobile communication services, music and digital players. It also

provides hardware, software and networks solutions and peripherals.

2. Apple produce elegant, easy to produce products at a premium price.

3. Apple also introduced Apple Pay where customers can pay at retail store by

scanning their phone.

4. Apple invests heavily in research and development.

5. Apple acquired several firms including Beats Music and Beats Headphones.

6. Apple products are manufactured in Asia and many of these are

manufactured at a single location except Macs which are manufactured in the

United States.

7. Apple currently operates 450 Apple stores.

8. Apple Music was released in 2015 and the company plans to release iOS 9,

OS X EI Capitan and watchOS 2 to customers in Fall 2015.

Finance

1. Apple had no long term debt on its balance sheet for the past few years not

until 2013, Apple used for the first time debt to finance operations of $17 Billion

long term debt.

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 2. In 2014, Apple had a long term debt of $29 Billion.

3. Apple also finance operations with bonds backed in Euros.

4. In 2014, Apple repurchase $90 Billion stock and raised dividend to 30%

increase.

5. Apple kept most of its cash in foreign banks to avoid US corporate taxes.

6. Apple derives its income from iPhone, iPad, Mac, iPod, iTunes and other

accessories.

7. In 2015, the company reported a quarterly revenue of $49.6 billion and

quarterly net profit of $10.7 billion.

8. International sales accounted to 64%of the quarter’s revenue.

Human Resources

1. Apple Inc. employs of about 98,000 people.

2. Apple Inc. has well-trained and knowledgeable salespersons with excellent

customer service.

V. STATEMENT OF THE PROBLEM:

How will Apple Inc. enable to strengthen its competitive advantage among its

rival companies in the digital industry?

VI. STATEMENT OF OBJECTIVES:

LONG-TERM OBJECTIVE:

 To create superior value among its rival companies in three years.

SHORT-TERM OBJECTIVES:

 To generate a better quality product in one year.

 To increase customer satisfaction in one year.

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VII. SWOT ANALYSIS:

STRENGTHS

 It is the world’s largest corporation

 Strong brand image

 It has been able to produce the world’s single-most popular smartphone-

iPhone

 It prides itself on simplicity

 Products are generally more user-friendly

 It has the ability to offer its own credit system at lower cost to merchants

 Expansion of Apple’s retail stores around the world

 Acquisition of several firms

 It has well-trained and knowledgeable employees

 Excellent customer service

 High profit margin

 Effective rapid innovation processes

 Better maintenance of quality control

 Strong customer loyalty

 The firm’s goodwill increased from $1.5 to $4.6 billion in 2014.

 83% of all credit transactions in the US are compatible with Apple Pay.

WEAKNESSES

 It has only about 15% of the global market share in smartphones

 Its products were significantly more expensive than that of competitors

 Premium pricing

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  Incompatibility of products with other products/brands

 Limited distribution network

 Dependence on sales on high-end market segments

OPPORTUNITIES

 Hypercompetitive smartphone industry

 Sales growth in emerging economies

 Rapidly changing industry

 Transactions in the US annually produce more credit card sales compared

to other place in the world

THREATS

 Patent infringements

 Rival firms or competitors annually roll out new smartphones

 Product imitation

 Market fragmentation

 Significant rally of U.S dollars against other foreign currencies

 Less demand for phones

VIII. ALTERNATIVE COURSES OF ACTION:

1. Establish new product lines.

2. Develop new features of its existing products.

3. Offer lower selling price for its products.

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IX. ANALYSIS OF ALTERNATIVES:

ACA #1: Establish new product lines.

ADVANTAGES DISADVANTAGES
1. Produce diversified products 1. High marketing efforts are

2. Enhance mobility of the business needed to create awareness

3. Increase revenue 2. Chances of failure

4. Attract new customers 3. Requires new resources

5. Additional variety of products for

customers

ACA #2: Develop new features of its existing products.

ADVANTAGES DISADVANTAGES
1. Brand loyal customers will be highly 1. Cost will extensively increase

satisfied 2. Possibility of product failure

2. Helps in improving brand name as

industry leader

3. Attract new customers

4. Minimizes the possibilities of

obsolescence of products

ACA #3: Offer lower selling price for its products.

ADVANTAGES DISADVANTAGES
1. Affordability of products to customers 1. Decreases profit margin

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 2. Increases number of buyers 2. Perception of low quality

3. Adapts economies of scale

X. DECISION CRITERIA:

Criteria Points/Description ACA #1 ACA #2 ACA #3

profitable)
2. Cost 20 (20 being the cheapest) 13 15 17
3. Risks 25 (25 being the least risky) 16 19 17
4. Time 20 (20 being the fastest to 14 15 17

complete)
TOTAL 100 73 78 75

XI. DECISION STATEMENT:

The chosen solution to solve the identified problem was the alternative course of

action no. 2 which states “Develop new features of its existing products.”

Apple Inc. Is doing fine now but for future growth, it must improve products by

developing new features so as its loyal customers would continue to patronize its

products as well as new markets will be attracted to buy Apple’s products. This

alternative will help Apple in the development process of innovation. It has numerous

disadvantages but its advantages are greater than the former which means that the

benefits of implementing it weigh more than the negative effects it may bring to the

company.

The proponents had set criteria to evaluate the different alternative courses of

action enumerated. In evaluating the ACAs, each of the member criticized each of the

alternative then averaged the sum of their critics. Based on the results of evaluation,

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ACA No. 2 has the highest score among the three which further means that ACA No. 1

and ACA No. 3 wouldn’t be the best solutions to the problem identified.

XII. IMPLEMENTATION PLANS:

Strategies

1. Build multiple strong distribution channel.

Apple Inc. may use many but strong distribution channel to widen customer

reach. An established distributors can readily tap a network of retailers and

other distributors to help with market coverage. Through the adapted

distribution channel, Apple products will have a faster growth in revenue and in

reaching different places which tightens the focus on core competencies.

2. Focus on core design and launch new features of products routinely.

Apple Inc. competes in a highly competitive market and their rivals tend to

follow the trend Apple has started. Apple could launch new features and design

for their products that other competitors could not offer to the customers and

remain as the industry leader.

3. System upgrade

Upgrading software adds additional protection and improve performance of

the products. System upgrade could make the customers more satisfied with

the product. Apple Inc., through system upgrade, could fix incompatibilities of

old products and add additional features for the product easier.

Tactics

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 1. Create designs of new features of existing products.

2. Screen and evaluate resources to be needed in the development.

3. Develop a prototype.

4. Test the product: assess the features, quality, consistency of the

performance, life cycle of the product and its reliability and safety.

5. Commercialize the product by communication beforehand to the distributors

and retailers.

6. Establish effective and well-trained sales force.

XIII. PROPOSED OPERATIONAL PLANS:

Management Plan

1. Matrix organization structure may be integrated into Apple Inc.’s organizational

structure to a greater extent in order to increase the efficiency of new product

development practices. Unlike divisional structure that is separated by nearly

independent departments along the lines of products, the matrix structure is

complex but allows for a focused approach to both products and functions.

2. Apple Inc. could improve organizational structure by adding divisional presidents

reporting to the Chief Operating Officer.

Marketing Plan

1. Advertise the new features of the product using social media.

2. Provide video tutorial showing how the product works and how it solves the

current problem and/or how it provides convenience to the customers.

3. Conduct training for the sales force.

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 4. Use the e-mail marketing sequence that provide automated messages that go

out to users once they subscribed that would develop customer relationship and

receive feedback for the product launched.

Operations

1. Ensure that the right inventory is in the right place at the right time.

2. Provide fast and convenient solutions to Apple customers.

3. Manage large-scope projects, from initial concept through launch and beyond.

4. Increase the number of retail outlets especially in developing countries.

5. Develop a mechanism that would allow for the devices to be charged by other

means apart from plugging in to an electricity.

Finance

1. Apple Inc. could offer its own in-house credit system at much lower cost to

merchants, in essence becoming a financial institution.

2. With the increasing revenue of Apple Inc, it could undertake and produce

additional capacity for its product done through additional investments and further

financing.

Human Resource

1. Create potential network.

2. Develop a simple application process.

3. Develop training and development schedule.

XIV. OTHER PROBLEMS AND RECOMMENDATIONS:

Other Problems Recommendations

presidents adding presidents in the structure for

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 efficient decision-making

2. Incompatibility of products with other 2. Use its strong brand image and rapid

products/brands innovation to produce features

compatible with other products/ brands

3. Limited distribution network 3. Establish partnerships with more

distributors to improve market reach of

Apple Inc.’s distribution network

4. Rival firms or competitors annually 4. Roll out new smartphones that were

roll out new smartphones way better than that of competitors

5. Less demand for phones 5. Produce trend products other than

phones

XV. BUSINESS LESSONS LEARNED:

 There is always a room for improvements.

 Simplicity brings out the best in some products.

 Insist on excellence.

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